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EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 3,
1997, is made by and between People's Community Capital Corporation, a South
Carolina corporation (the "Employer" or the "Company") which is the proposed
bank holding company for People's Community Bank of South Carolina (Proposed),
a proposed state bank (the "Bank"), and XXXX X. XXXXXX, an individual resident
of South Carolina (the "Executive").
The Employer is in the process of organizing the Bank, and the
Executive has agreed to serve as President of the Company and President and
Chief Operating Officer of the Bank. Upon organization of the Bank, the
Employer and the Executive contemplate that this Agreement will be assigned by
the Employer to the Bank and that the Bank will assume the duties of the
Company hereunder (except pursuant to Section 3). Following such assignment,
the term "Employer" as used herein from time to time shall refer to the Bank.
The Employer recognizes that the Executive's contribution to the
growth and success of the Bank during its organization and initial years of
operations will be a significant factor in the success of the Bank. The
Employer desires to provide for the employment of the Executive in a manner
which will reinforce and encourage the dedication of the Executive to the Bank
and promote the best interests of the Bank and its shareholders. The Executive
is willing to serve the Employer (and, after assignment of this Agreement, the
Bank) on the terms and conditions herein provided. Certain terms used in this
Agreement are defined in Section 17 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as President and Chief Operating Officer of
the Bank and President of the Company upon the terms and conditions set forth
herein. The Executive shall have such authority and responsibilities
consistent with his position as are set forth in the Company's or the Bank's
Bylaws or assigned by the Company's or the Bank's Board of Directors (the
"Board") from time to time. The Executive shall devote his full business time,
attention, skill and efforts to the performance of his duties hereunder, except
during periods of illness or periods of vacation and leaves of absence
consistent with Bank policy. The Executive may devote reasonable periods to
service as a director or advisor to other organizations, to charitable and
community activities, and to managing his personal investments, provided that
such activities do not materially interfere with the performance of his duties
hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company or the Bank.
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2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall commence on the date hereof
and be for a term (the "Term") of five years. At the end of each year of the
Term, upon adoption of a resolution by the Board of Directors of the Bank (with
the Executive abstaining) reflecting a determination by the Board that the
Executive has satisfactorily performed his duties hereunder through such date,
the Term shall be extended for an additional year so that the remaining term
shall continue to be five years; provided that the Executive may at any time,
by written notice to the Bank, fix the Term to a finite term of five years
commencing with the later of the date hereof or the date of the latest such
resolution. Notwithstanding the foregoing, the Term of employment hereunder
will end on the date that the Executive attains the retirement age, if any,
specified in the Bylaws of the Bank for directors of the Bank.
3. Compensation and Benefits.
(a) Prior to the initial date that funds are released from
escrow pursuant to the stock offering for the initial capitalization of the
Bank and the Company and assignment of this Agreement to the Bank, the Employer
shall pay the Executive a salary of $75,000 per annum, plus his medical
insurance premium yearly. Thereafter, the Employer shall pay the Executive a
salary of $90,000, plus his yearly medical insurance premium. The Board (or an
appropriate committee of the Board) shall review the Executive's salary at
least annually and may increase the Executive's base salary if it determines in
its sole discretion that an increase is appropriate.
(b) The Executive shall be eligible to receive a cash bonus in
an amount determined by the Board on the first anniversary of the Opening Date,
with the Executive abstaining from participating in the consideration of and
vote on the matter, based on such intangible criteria as the Board shall
establish. For each anniversary of the Opening Date thereafter, the Executive
shall be eligible to receive a cash bonus equaling 5% of the net pre-tax income
of the Bank (determined in accordance with generally accepted accounting
principles) if the Bank achieves certain performance levels established by the
Board from time to time.
(c) The Executive shall participate in the Bank's long-term
equity incentive program and be eligible for the grant of stock options,
restricted stock, and other awards thereunder or under any similar plan adopted
by the Company. On the date of the closing of the stock offering for the
initial capitalization of the Bank, or as soon thereafter as an appropriate
stock option plan is adopted by the Board, the Company shall grant to the
Executive an option to purchase a number of shares of Common Stock equal to 5%
of the number of shares sold in the offering. The award agreement for the
stock option shall provide that one-fifth of the shares subject to the option
will vest on each of the first five anniversaries of the Opening Date, but only
if the Executive remains employed by the Company on such date and the Bank has
met the performance goals set forth hereof for such year:
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For each twelve month period beginning on the Opening Date, and
as a condition to the vesting of the shares subject to the option in
such year (except in the event of a Change in Control), the Bank must
meet the following performance criteria:
(i) the Bank shall meet or exceed 100% of the pro forma
projections contained in the application of the Bank
filed with the State Board of Financial Institutions
of the State of South Carolina for each year of
operations of the Bank;
(ii) for the fiscal quarter ending with or immediately
prior to the Bank's fiscal year, the Bank's ratio of
non-current loans and leases to total loans and
leases, as determined in the Uniform Bank Performance
Report (the "UBPR"), shall not exceed the ratio of
non-current loans and leases to total loans and
leases for banks in the Bank's peer group, as defined
in the UBPR; and
(iii) the Bank shall maintain a regulatory examination
rating of "satisfactory" or better;
provided, however, that if the Bank does not meet the performance
criteria for any year, the shares subject to the option for such year
may vest on the following anniversary date, in the sole discretion of
the Board, if the Bank meets or exceeds the performance criteria for
such year in the following year. The Board shall notify the Executive
of any shares subject to the option vested hereunder within a
reasonable period of time after the anniversary date to which such
options pertain. The good faith determination of the Board regarding
whether the Bank met its yearly performance levels shall be
conclusive.
In addition, the award agreement will provide that (i) the Executive's option
shall be qualified as an incentive stock option under the Internal Revenue Code
of 1986, as amended (the "Code"); (ii) all options shall be exercisable at any
time during the ten years following the date of grant at a price per share
equal to the public offering price in the offering (subject to standard
antidilution adjustments in the event of stock splits, dividends or
combinations), which the parties agree is the fair market value of the Common
Stock as of the date of grant; and (iii) all options shall be nontransferable
and nonassignable by the Executive or by any other person entitled hereunder to
exercise any such rights; provided, however, that upon the death of the
Executive any rights granted hereunder shall be transferable by the Executive's
will or by the applicable laws of descent and distribution. In the event of a
Change in Control, the restrictions on any outstanding incentive awards
(including restricted stock) granted to the Executive under any incentive plan
or arrangement shall lapse and such incentive award shall become 100% vested;
all stock options and stock appreciation rights granted to the Executive shall
become immediately exercisable and shall become 100% vested; and all
performance units granted to the Executive shall become 100% vested. Nothing
herein shall be deemed to preclude the granting to the Executive of warrants or
options under a director option plan in addition to the options granted
hereunder.
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(d) The Executive shall participate in all retirement, welfare
and other benefit plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of employees that includes
senior executives of the Employer; provided that during any period during the
Term that the Executive is subject to a Disability, and during the 180-day
period of physical or mental infirmity leading up to the Executive's
Disability, the amount of the Executive's compensation provided under this
Section 3 shall be reduced by the sum of the amounts, if any, paid to the
Executive for the same period under any disability benefit or pension plan of
the Employer or any of its subsidiaries.
(e) The Employer shall provide the Executive with a term life
insurance policy providing for death benefits totaling $1,000,000 payable to
the Employer and $1,000,000 payable to the Executive's family, and the
Executive shall cooperate with the Employer in the securing and maintenance of
such policy. The Employer shall also pay for an accident liability policy on
the Executive totaling $1,000,000 to protect the Employer from damages or
lawsuits resulting from injuries to third parties caused by the Executive.
(f) Beginning upon the opening of the Bank for business, the
Company shall provide the Executive with either i) an automobile (at a cost not
to exceed $25,000) owned or leased by the Company of a make and model
appropriate to the Executive's status, or ii) a monthly automobile allowance
not to exceed $600 per month.
(g) In addition, the Employer shall obtain a membership in, and
pay the dues pertaining to, an area Country Club and shall designate the
Executive as the authorized user of such membership for so long as the
Executive remains the Chairman and CEO of the Employer and this Agreement
remains in force.
(h) The Employer shall reimburse the Executive for reasonable
travel and other expenses related to the Executive's duties which are incurred
and accounted for in accordance with the normal practices of the Employer.
4. Termination.
(a) The Executive's employment under this Agreement may be
terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) by the Employer due to the Disability of the
Executive upon delivery of a Notice of Termination to the
Executive;
(iii) by the Employer for Cause upon delivery of a
Notice of Termination to the Executive;
(iv) by the Executive for Good Reason upon delivery
of a Notice of Termination to the Employer within a 90-day
period beginning on the 30th day
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after the occurrence of a Change in Control or within a 90-day period
beginning on the one year anniversary of the occurrence of a Change in
Control;
(v) by the Employer if its effort to organize the Bank
is abandoned; and
(vi) by the Executive effective upon the 30th day after
delivery of a Notice of Termination.
(b) If the Executive's employment with the Employer is terminated
during the Term (i) by reason of the Executive's death or (ii) by the Employer
for Disability or Cause, the Employer shall pay to the Executive (or, in the
case of his death, the Executive's estate) within fifteen days after the
Termination Date a lump sum cash payment equal to the Accrued Compensation and,
if such termination is other than by the Employer for Cause, the Pro Rata Bonus.
(c) If the Executive's employment with the Employer is terminated by
the Employer in violation of this Agreement or by the Executive for Good
Reason, in addition to other rights and remedies available in law or
equity, the Executive shall be entitled to the following:
(i) the Employer shall pay the Executive in cash within
fifteen days of the Termination Date an amount equal to all Accrued
Compensation and the Pro Rata Bonus;
(ii) the Employer shall pay to the Executive in cash
at the end of each of the twelve consecutive months following
the Termination Date an amount equal to one-twelfth of the sum
of the Base Amount and the Bonus Amount;
(iii) for the period from the Termination Date
through the date that the Executive attains the age of 65 (the
"Continuation Period"), the Employer shall at its expense
continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental,
and hospitalization benefits provided (x) to the Executive at
any time during the 90-day period prior to the Change in Control
or at any time thereafter or (y) to other similarly situated
executives who continue in the employ of the Employer during the
Continuation Period. The coverage and benefits (including
deductibles and costs) provided in this Section 4(c)(iii) during
the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries than the most
favorable of such coverages and benefits during any of the
periods referred to in clauses (x) and (y) above. The
Employer's obligation hereunder with respect to the foregoing
benefits shall be limited to the extent that the Executive
obtains any such benefits pursuant to a subsequent employer's
benefit plans, in which case the Employer may reduce the
coverage of any benefits it is required to provide the Executive
hereunder as long as the aggregate coverages and benefits of the
combined benefit plans is no less favorable to the Executive
than the coverages
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and benefits required to be provided hereunder. This subsection (iii)
shall not be interpreted so as to limit any benefits to which the
Executive or his dependents or beneficiaries may be entitled under any
of the Employer's employee benefit plans, programs, or practices
following the Executive's termination of employment, including,
without limitation, retiree medical and life insurance benefits; and
(iv) the restrictions on any outstanding incentive
awards (including restricted stock) granted to the Executive
under the Company's or the Bank's long-term equity incentive
program or any other incentive plan or arrangement shall lapse
and become 100% vested, all stock options and stock appreciation
rights granted to the Executive shall become immediately
exercisable and shall become 100% vested, and all performance
units granted to the Executive shall become 100% vested.
(d) If the Executive's employment with the Employer is terminated by
the Employer pursuant to Section 4(a)(v) hereof, the Executive shall be
entitled to the following:
(i) the Employer shall pay the Executive in cash
within fifteen days of the Termination Date an amount equal to
all Accrued Compensation; and
(ii) the Employer shall pay to the Executive in cash
at the end of each of the six consecutive months following the
Termination Date an amount equal to one-twelfth of the Base
Amount.
(e) If the Executive's employment with the Employer is terminated by
the Executive pursuant to Section 4(a)(vi) hereof, the Employer shall pay the
Executive in cash within fifteen days of the Termination Date an amount equal
to all Accrued Compensation.
(f) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 4(c)(iii).
(g) In the event that any payment or benefit (within the meaning
of Section 280(b)(2) of the Code) to the Executive or for his benefit paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of, his employment with the
Employer or a change in ownership or effective control of the Employer or of a
substantial portion of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest
or penalties, other than interest and penalties imposed by reason of the
Executive's failure to file timely a tax return or pay taxes shown due on his
return, imposed
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with respect to such taxes and the Excise Tax), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(h) The severance pay and benefits provided for in this Section
4 shall be in lieu of any other severance or termination pay to which the
Executive may be entitled under any Employer severance or termination plan,
program, practice or arrangement. The Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the Employer's
employee benefit plans and other applicable programs, policies and practices
then in effect.
5. Trade Secrets. The Executive shall not, at any time, either
during the Term of his employment or after the Termination Date, use or
disclose any Trade Secrets of the Employer, except in fulfillment of his duties
as the Executive during his employment, for so long as the pertinent
information or data remain Trade Secrets, whether or not the Trade Secrets are
in written or tangible form.
6. Non-Competition and Non-Solicitation Covenants. The Executive
shall not, during the Term and for a period of twelve months thereafter, either
for himself or on behalf of any other person, directly or indirectly, without
the prior consent of the Employer, (i) serve as a director, officer at the Vice
President level or higher or organizer or promoter of, or provide executive
management services to, any financial institution located within Aiken County,
(ii) solicit any Major Customer for the purpose of providing banking services
to such Major Customer, or (iii) solicit any employee of the Employer for
employment by any other party. For purposes of this Section, a "Major
Customer" shall mean any customer of the Employer that Employee has contacted,
negotiated with, or performed any services on behalf of, during the Term or the
preceding two years of the Term, whichever is shorter, and that has maintained
or purchased from the Employer at any time during such period deposits, mutual
funds or other investments in excess of $20,000.
7. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Employer, its Successors and Assigns and the Employer shall
require any Successors and Assigns to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer
would be required to perform it if no such succession or assignment had taken
place.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal personal representative.
8. Fees and Expenses. The Employer shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel)
incurred by the Executive as they become due as a result of (a) the Executive's
termination of employment (including all such
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fees and expenses, if any, incurred in contesting or disputing any such
termination of employment) and (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement; but only if the circumstances
set forth in clauses (a) and (b) occurred on or after a Change in Control.
9. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Employer shall be directed to
the attention of the Board with a copy to the Secretary of the Employer. All
notices and communications shall be deemed to have been received on the date of
delivery thereof, except that notice of change of address shall be effective
only upon receipt.
10. Settlement of Claims. The Employer's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense, or other
right which the Employer may have against the Executive or others. The
Employer may, however, withhold from any benefits payable under this Agreement
all federal, state, city, or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
11. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Employer. No waiver
by any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
12. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South
Carolina without giving effect to the conflict of laws principles thereof. Any
action brought by any party to this Agreement shall be brought and maintained
in a court of competent jurisdiction in Aiken County in the State of South
Carolina.
13. Severability. The parties agree that the provisions of this
Agreement are severable and the invalidity or unenforceability of any provision
in whole or part shall not affect the validity or enforceability of any
enforceable part of such provision or any other provisions hereof. It is
further agreed that the courts may "blue pencil" the provisions of this
Agreement to provide for maximum enforcement of such provisions.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
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15. Headings. The headings of Sections herein are included solely
for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which includes
all amounts earned or accrued through the Termination Date, but not paid as of
the Termination Date including (i) base salary and any vacation time earned but
not used, (ii) reimbursement for reasonable and necessary expenses incurred by
the Executive on behalf of the Employer during the period ending on the
Termination Date, and (iii) bonuses and incentive compensation (other than the
Pro Rata Bonus).
(b) "Base Amount" shall mean the greater of the Executive's
annual base salary (i) at the rate in effect on the Termination Date or (ii) at
the highest rate in effect at any time during the ninety-day period prior to
the Change in Control, and shall include all amounts of his base salary that
are deferred under the qualified and non-qualified employee benefit plans of
the Employer or any other agreement or arrangement.
(c) "Bonus Amount" shall mean the greater of (i) the most recent
annual bonus paid or payable to the Executive or, if greater, the annual bonus
paid or payable for the full fiscal year ended prior to the fiscal year during
which a Change in Control occurred, or (ii) the average of the annual bonuses
paid or payable during the three full fiscal years ended prior to the
Termination Date or, if greater, the three full fiscal years ended prior to the
Change in Control (or, in each case, such lesser period for which annual
bonuses were paid or payable to the Executive).
(d) The termination of the Executive's employment shall be for
"Cause" if it is a result of:
(i) any act that (A) constitutes, on the part of
the Executive, fraud, dishonesty, gross malfeasance of duty, or
conduct grossly inappropriate to the Executive's office, and (B)
is demonstrably likely to lead to material injury to the
Employer or resulted or was intended to result in direct or
indirect gain to or personal enrichment of the Executive; or
(ii) the conviction (from which no appeal may be or
is timely taken) of the Executive of a felony; or
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(iii) the suspension or removal of the Executive by
federal or state banking regulatory authorities acting under
lawful authority pursuant to provisions of federal or state law
or regulation which may be in effect from time to time;
provided, however, that in the case of clause (i) above, such conduct shall not
constitute Cause unless (A) there shall have been delivered to the Executive a
written notice setting forth with specificity the reasons that the Board
believes the Executive's conduct constitutes the criteria set forth in clause
(i), (B) the Executive shall have been provided the opportunity to be heard in
person by the Board (with the assistance of the Executive's counsel if the
Executive so desires), and (C) after such hearing, the termination is evidenced
by a resolution adopted in good faith by two-thirds of the members of the Board
(other than the Executive).
(e) A "Change in Control" shall mean the occurrence during the
Term of any of the following events:
(i) An acquisition (other than directly from the
Company) of any voting securities of the Bank (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (the "1934 Act")) immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 0000 Xxx) of 20% or more of the
combined voting power of the Company's then outstanding Voting
Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a
Change in Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust forming
a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting
power or its equity securities or equity interest is owned
directly or indirectly by the Company (a "Subsidiary"), (2) the
Company or any Subsidiary, or (3) any Person in connection with
a "Non-Control Transaction" (as hereinafter defined).
(ii) The individuals who, as of the date of this
Agreement, are members of the Board of either the Company or the
Bank (the "Incumbent Board") cease for any reason to constitute
at least two-thirds of the Board; provided, however, that if
the election, or nomination for election by the Company's or
Bank's shareholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described
in Rule 14a-11 promulgated under the 0000 Xxx) or other actual
or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid or settle
any Election Contest or Proxy Contest; or
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(iii) Approval by shareholders of the Company or the Bank of:
(A) A merger, consolidation or reorganization involving the
Bank, unless
(1) the shareholders of the Company or the Bank, as
the case may be, immediately before such merger,
consolidation or reorganization, own, directly
or indirectly, immediately following such merger,
consolidation or reorganization, at least two-thirds
of the combined voting power of the outstanding
voting securities of the corporation resulting from
such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization, and
(2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement providing for such merger, consolidation
or reorganization constitute at least two-thirds of
the members of the board of directors of the
Surviving Corporation.
(A transaction described in clauses (1) and (2) shall
herein be referred to as a "Non-Control Transaction.")
(B) A complete liquidation or dissolution of the Company or
the Bank; or
(C) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company or the Bank
to any Person (other than a transfer to a Subsidiary).
(iv) Notwithstanding anything contained in this Agreement to the
contrary, if the Executive's employment is terminated prior to a Change in
Control and the Executive reasonably demonstrates that such termination (A) was
at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a
Change in Control (a "Third Party") or (B) otherwise occurred in connection
with, or in anticipation of, a Change in Control which actually occurs, then
for all purposes of this Agreement, the date of a Change in Control with
respect to the Executive shall mean the date immediately prior to the date of
such termination of the Executive's employment.
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(f) "Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform his duties with the
Employer for a period of 180 consecutive days, as determined by an independent
physician selected with the approval of both the Employer and the Executive.
(g) "Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable judgment,
represents an adverse change from his status, title, position or
responsibilities as in effect at any time within ninety days
preceding the date of a Change in Control or at any time
thereafter; the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment,
are inconsistent with his status, title, position or
responsibilities as in effect at any time within ninety days
preceding the date of a Change in Control or at any time
thereafter; any removal of the Executive from or failure to
reappoint or reelect him to any of such offices or positions,
except in connection with the termination of his employment for
Disability or Cause, as a result of his death, or by the
Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive's reasonable
judgment makes it materially more difficult for the Executive to
carry out the duties and responsibilities of his office than
existed at any time within ninety days preceding the date of
Change in Control or at any time thereafter;
(ii) a reduction in the Executive's base salary or
any failure to pay the Executive any compensation or benefits to
which he is entitled within five days of the date due;
(iii) the Employer's requiring the Executive to be
based at any place outside a 30-mile radius from the executive
offices occupied by the Executive immediately prior to the
Change in Control, except for reasonably required travel on the
Employer's business which is not materially greater than such
travel requirements prior to the Change in Control;
(iv) the failure by the Employer to (A) continue in
effect (without reduction in benefit level and/or reward
opportunities) any material compensation or employee benefit
plan in which the Executive was participating at any time within
ninety days preceding the date of a Change in Control or at any
time thereafter, unless such plan is replaced with a plan that
provides substantially equivalent compensation or benefits to
the Executive, or (B) provide the Executive with compensation
and benefits, in the aggregate, at least equal (in terms of
benefit levels and/or reward opportunities) to those provided
for under each other employee benefit plan, program and practice
in which the Executive was participating at any time within
ninety days preceding the date of a Change in Control or at any
time thereafter;
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(v) the insolvency or the filing (by any party,
including the Employer) of a petition for bankruptcy of the
Employer, which petition is not dismissed within sixty days;
(vi) any material breach by the Employer of any
material provision of this Agreement;
(vii) any purported termination of the Executive's
employment for Cause by the Employer which does not comply with
the terms of this Agreement; or
(viii) the failure of the Employer to obtain an
agreement, satisfactory to the Executive, from any Successors
and Assigns to assume and agree to perform this Agreement, as
contemplated in Section 6 hereof.
Any event or condition described in clause (i) through (viii) above which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a Third Party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The
Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to physical or mental illness.
(h) "Notice of Termination" shall mean a written notice of
termination from the Employer or the Executive which specifies an effective
date of termination, indicates the specific termination provision in this
Agreement relied upon, and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(i) "Opening Date" shall mean the date the Bank commences
operations.
(j) "Pro Rata Bonus" shall mean an amount equal to the Bonus
Amount multiplied by a fraction the numerator of which is the number of days in
the fiscal year through the Termination Date and the denominator of which is
365.
(k) "Successors and Assigns" shall mean the Bank or a
corporation or other entity acquiring all or substantially all the assets and
business of the Bank (including this Agreement), whether by operation of law or
otherwise.
(l) "Termination Date" shall mean, in the case of the
Executive's death, his date of death, and in all other cases, the date
specified in the Notice of Termination.
(m) "Trade Secrets" shall mean any information, including but
not limited to technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, information on customers, or a
list of actual or potential customers or suppliers, which: (i) derives
economic value, actual or potential, from not being generally known to, and not
being
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readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective
as of the date first above written.
ATTEST: PEOPLE'S COMMUNITY CAPITAL CORPORATION
By: By:
------------------------------- ---------------------------------------
Name:
Title:
EXECUTIVE
------------------------------------------
Xxxx X. Xxxxxx
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