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EXHIBIT 10.10
AGREEMENT
THIS AGREEMENT made this 18th day of July, 1995, by and between:
FIRST WESTERN BANCORP, INC., a Pennsylvania corporation which is hereinafter
referred to as the "Company",
AND
XXXXXX X. X'XXXXX, an employee of the Company, and hereinafter referred to
as the "Executive";
W I T N E S S E T H:
WHEREAS, the Executive serves in the capacity of, and performs the duties
of, an Executive Officer for the Company; and
WHEREAS, the Board of Directors of the Company considers it to be in the
best interest of the Company and the stockholders of the Company that the
Executive continue to serve in an executive capacity of the Company; and
WHEREAS, the Company desires to assure the continuing services of the
Executive on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest due to the uncertainties of his
position in the event of an actual, attempted or threatened Change in Control
(as such Change in Control is hereinafter defined in Paragraph 1); and
WHEREAS, in view of the foregoing, the Company desires to provide the
Executive with a degree of employment security in the event of a Change in
Control;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Company and the Executive hereby
agree as follows:
1. a. "Change in Control" shall be deemed to have occurred as of the
first day that any one or more of the following conditions shall
have been satisfied:
(i) Final regulatory approval is obtained for any Person (other than
those Persons in control of the Company and/or the Bank, as
applicable, as of the effective date of this Agreement, or other
than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company and/or the Bank, as
applicable, or a corporation owned directly or indirectly by the
stockholders of the Company and/or the Bank, as applicable, in
substantially the same proportions as their ownership of stock of
the Company and/or the Bank), to become the Beneficial Owner,
directly or indirectly, of securities of the Company and/or the
Bank, as applicable, representing twenty (20) percent or more of
the combined voting power of the Company's (or the Bank's as
applicable) then outstanding securities; or
(ii) During any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board of the
Company and/or the Board of the Bank (and any new
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Director, whose election by the Company's stockholders or the
Bank's stockholders, as applicable, was approved by a vote of at
least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose
election or nomination for election was so approved), cease for
any reason to constitute a majority thereof; or
(iii) Final regulatory approval is obtained with respect to: (A) a
plan of complete liquidation of the Company or the Bank; or
(B) an agreement for the sale or disposition of all or
substantially all the Company's or the Bank's assets; or (C)
a merger, consolidation, or reorganization of the Company
and/or the Bank with or involving any other corporation, other
than a merger, consolidation, or reorganization that would
result in the voting securities of the Company or the Bank (as
applicable) outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), at
least fifty (50) percent of the combined voting power of the
voting securities of the Company of the Bank (as applicable)
(or such surviving entity) outstanding immediately after such
merger, consolidation, or reorganization.
Notwithstanding the foregoing, in no event shall a Change in
Control be deemed to have occurred, with respect to the Executive,
if the Executive is part of a purchasing group which consummates
the Change in Control transaction. The Executive shall be deemed
"part of a purchasing company or group (except for: (A) passive
ownership of less than three (3) percent of the stock of the
purchasing company or group which is otherwise not significant,
as determined prior to the Change in Control by a majority of the
nonemployed continuing Directors of the Company or the Bank, as
applicable).
(b) "Bank" means First Western Bank, National Association, First
Western Bank, Federal Savings Bank, First Western Trust Services
Company, or any successor thereto.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange
Act.
(d) "Board" means the Board of Directors of the Company and/or the
Board of Directors of the Bank, as indicated by the context in
which the term is used.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(f) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Section 13(d) and Section
14(d) thereof, including a "group" as defined in Section 13(d).
The term Person shall not include the Company or the Bank, any
executive officer or Director of the Company, the Bank, or a
subsidiary of the Company or Bank, or a group controlled by such
Directors or executive officers, or any employee benefit plan of
the Company, the Bank, or a subsidiary of the Company or Bank;
provided, however, that the term Person shall include any
individual who is a Director on the effective date of this
Agreement beneficially owned five (5) percent or more of the
voting shares of common stock of the Company, or a group
controlled by such a Director.
2. If at the time of a Change in Control the Executive is still serving in the
capacity of, and performing the duties of, an Executive Officer for the
Company or the Bank, the Company shall continue to employ the Executive in
an executive position during his "Term of Employment" which, for purposes
of this Agreement is defined as the earliest of (i) the date upon which the
Executive would attain age 65 ("Normal Retirement Age"), (ii) the date upon
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which the Executive's elected early retirement is scheduled to begin and
(iii) the date that is thirty-six (36) months after the date of the Change
in Control, such employment to be all upon the terms and conditions
hereinafter set forth.
3. During the Term of Employment the Company shall:
(a) pay the Executive, during the first year of the Term of Employment (or
such portion thereof if the Term of Employment is less than a year), a
monthly salary at least equal to the Executive's highest salary for
any month during the twelve (12) months immediately preceding the
Change in Control and, during each subsequent year of the Term of
Employment, an annual salary (payable on at least a monthly basis) at
least equal to the Executive's salary for the immediately preceding
year plus an amount calculated in a manner at least as favorable to
the Executive as the manner in which the pay increases for other
Company executives or of new Company executives are calculated, or in
the case of an implemented salary freeze or decrease across the board,
an increase calculated in accordance with the prior twelve (12)
months' increase in the U.S. Government Consumer Price Index;
(b) pay the Executive an annual bonus calculated in a manner at least as
favorable to the Executive as the manner in which (i) the last annual
bonus paid to the Executive prior to the Change in Control was
calculated, or (ii) the annual bonus paid to the Executive by the
Company in the immediately preceding year was calculated (whichever
would result in a greater payment to the Executive); this annual bonus
may be pro-rated for that portion of the year covered by the Term of
Employment if the Term of Employment expires prior to year end;
(c) provide and maintain in full force and effect through existing plans
or through equivalent plans at least the types and amounts of group
insurance coverages (including conversion features) and benefits,
including life, health, disability and hospitalization insurance, and
other health care benefits, including medical, hospital and surgical
benefits and health care benefits for the Executive's family
(collectively "Insurance and Health Care Benefits"), to which the
Executive was entitled immediately prior to the Change in Control or
the Insurance and Health Care Benefits provided by the Company or its
successor to its other executives after a Change in Control (whichever
would result in greater Insurance and Health Care Benefits to the
Executive);
(d) continue to provide benefits to the Executive under the Company's
pension plan, profit sharing plan (including Section 401(k) election
and matching contribution provisions), ESOP plans and other fringe
benefits programs and arrangements, including employee benefit plans,
as in effect immediately prior to the Change in Control or, if such
plans, programs or arrangements are discontinued or superseded,
provide benefits to the Executive on the same basis as such benefits
are provided to the other executives of the Company or its successor
after a Change in Control; and
(e) provide and maintain in full force and effect at least those
additional executive benefits and perquisites which the Executive was
entitled to from the Company immediately prior to the Change in
Control, including any social and/or club memberships and any Company
provided automobiles (which automobiles may be purchased at
termination at the lower of fair market value per NADA blue book
wholesale value or at book value on the Company's books and records).
4. "Termination of Employment", for the purposes of this Agreement, shall
occur if the Executive's employment in an executive position is terminated
during the Term of Employment:
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(i) by the Company for any reason, including disability or incapacity, but
excepting a termination for "cause," as shall be determined by the
Board of the Company and the Board of the Bank, in exercise of good
faith and reasonable judgment, upon the occurrences of any one or more
of the following:
(a) the Executive's conviction for committing an act of fraud,
embezzlement, theft, or other act constituting a felony; or
(b) the willful engaging by the Executive in gross misconduct
materially and demonstrably injurious to the Company and/or the
Bank; however, no act or failure to act, on the Executive's part
shall be considered "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief
that his action or omission was in the best interest of the
Company and/or the Bank; or
(c) the conviction of the Executive of any criminal offense or act
involving dishonesty or a breach of trust which requires the
Company or the Bank to terminate the employment of the Executive,
and/or precludes the payment of severance compensation under
Federal law; or
(d) any conduct, act, or omission by the Executive which would
constitute grounds for the imposition upon the Executive, the
Company or the Bank of a civil penalty under Section 8(i)(2)(B)
or (C) of the Federal Deposit Insurance Act; or
(ii) by the Executive for "good reason," which shall mean, without the
Executive's express written consent, the occurrence after a Change in
Control of the Company or the Bank of any one or more of the following:
(a) the assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and
status (including offices, titles, and reporting requirements) as
an officer of the Company and/or the Bank, or a reduction or
alteration in the nature or status of the Executive's authorities,
duties, or responsibilities form those in effect as of ninety (90)
days prior to the Change in Control, other than an insubstantial
and inadvertent act that this remedied by the Company and/or the
Bank promptly after receipt of notice thereof given by the
Executive, and other than any such alteration which is consented
to by the Executive in writing;
(b) the Company's requiring the Executive to be based at a location in
excess of thirty-five (35) miles from the location of the
Executive's principal job location or office immediately prior to
the Change in Control; except for required travel on the Company's
and/or the Bank's business to an extent substantially consistent
with the Executive's present business obligations; and further
except as may be waived by the Executive provided the Company pays
all expenses related to a move, including purchasing any existing
house used by the Executive as his principal residence which the
Executive is not able to sell within One-Hundred Twenty (120)
days of listing at fair market value as fair market value is
determined by two (2) independent appraisals;
(c) a material reduction by the Company or the Bank of the Executive's
compensation or benefits; and
(d) the failure of the Company or the Bank to obtain a satisfactory
agreement from any successor to the Company or the Bank to assume
and agree to perform the Company's and the Bank's obligations
under this Agreement.
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The Executive's right to terminate employment for good reason
shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting good reason herein.
5. In the event of a Termination of Employment, the Company shall pay or cause
to be paid to the Executive or after the Executive's death to his
designated beneficiary, or if there be none, to his personal
representative, executor or administrator (for the purposes of this
Paragraph 5 the term "Executive" shall include the Executive's designated
beneficiary, personal representative, executor or administrator) a single
lump sum payment in an amount equal to the present value of the total
amount calculated below, such present value to be determined by discount
based upon an interest rate two (2) percentage points less than the
Pittsburgh prime rate in effect at the date of Termination of Employment.
The Company shall pay the Executive such lump sum amount within thirty (30)
days following the date of Termination of Employment. The total amount
upon which the present value is to be determined, shall be calculated as
follows:
The sum of:
(a) the equivalent of all monthly salaries during the "Payment Period"
with each monthly salary being equal to the greater of the Executive's
highest salary from the Company for any month during the twelve (12)
months immediately preceding (A) the change of control and (B) the
termination of employment ("Annual Base Compensation"), plus
(b) the greater of the average of the annual bonuses received by the
Executive from the Company during the three (3) calendar years
immediately preceding (A) the change in control and (B) the
Termination of Employment ("Annual Bonus"), plus
(c) the cost of any social and/or club memberships and the cost of any
Company provided automobiles.
The "Payment Period", for purposes of this Agreement, is defined to be the
period beginning on the date of Termination of Employment and ending on the
earlier of (i) the date upon which the Executive would attain Normal
Retirement Age and (ii) the date that is thirty-six (36) months from the
date of the Change of Control.
The Executive's right to receive compensation from the Company pursuant to
this Paragraph 5 shall not be affected by the Executive's receipt of
compensation in connection with any subsequent employment by any other
corporation or entity.
6. In the event that during the Term of Employment following a Change in
Control the Executive ceases to be employed by the Company for any reason,
including retirement at or at any time before Normal Retirement Age,
Termination of Employment or dismissal by the Company for reasons other
than for cause (pursuant to Paragraph 4 hereof), the Executive and/or his
spouse shall continue to receive from the Company, until the date the
Executive attains or would have attained Normal Retirement Age, insurance
and health care benefits equivalent to the greater of the insurance and
health care benefits to which the Executive was entitled (i) immediately
preceding the date the Executive ceased to be employed by the Company and
(ii) immediately preceding the Change in Control (provided that the Company
may reduce such insurance and health care benefits to the extent of any
duplication of the types and amounts of coverages and benefits provided to
the Executive in connection with any subsequent employment by any other
corporation or other entity prior to the Executive attaining Normal
Retirement Age), and from and after the date the Executive attains or would
have attained Normal Retirement Age, the Executive and/or his spouse shall
receive
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the insurance and health care benefits, if any, to which he would
be entitled as a retired executive employee under the Company's benefit
plans and programs in effect immediately prior to the Change in Control or
immediately prior to the date the Executive ceased to be employed by the
Company (whichever would result in greater benefits to the Executive).
7. In the event that during the Term of Employment following a Change in
Control the Executive ceases to be employed by the Company for any reason,
including retirement at or at any time before Normal Retirement Age,
Termination of Employment or dismissal by the Company for reasons other
than for cause (pursuant to Paragraph 4 hereof), the Executive shall
receive retirement benefits in accordance with the Company's retirement
plans, including any supplemental executive retirement plan (the
"Retirement Plan") as in effect immediately prior to the Change in Control
or immediately prior to the Termination of Employment (whichever would
result in greater benefits for the Executive ). In the event of a
Termination of Employment prior to the date the Executive attains Normal
Retirement Age, in addition to benefits payable to the Executive pursuant
to the Retirement Plan, the Executive shall be entitled to receive
supplemental retirement benefits from the Company equal in value to the
difference between:
(i) the benefits to which the Executive would have been entitled under the
Retirement Plan assuming years of Service under the Retirement Plan
equal to the Executive's years of Service under the Retirement Plan to
the Termination of Employment plus the number of years of Service that
the Executive would have earned by continuing employment with the
Company until the termination of the Payment Period (at an assumed
annual salary during each year of assumed Service following the date
of the Termination of Employment equal to the Executive's compensation
including bonus club memberships and the like as set forth in 3
above), and
(ii) the benefits which the Executive is entitled to receive under the
Retirement Plan.
Any supplemental retirement benefits payable by the Company shall be
payable to the same extent and in the same form as, and commencing on
the date on which, benefit payments commence under the Retirement Plan
(including payment pursuant to any option thereunder, including early
retirement or any early retirement program where years may be added or
included for early retirement benefit calculations, payment elections
and beneficiary designations).
8. In the event of the death of the Executive during the Term of Employment,
in addition to the amounts, if any, payable pursuant to Paragraphs 5, 6 or
7 hereof, the estate of the Executive shall receive benefits at least equal
to the greater of:
(i) such other benefits which would have been payable to the estate of the
Executive by the Company if such event had occurred immediately prior
to the date of the Change in Control and
(ii) such other benefits payable to the estate of the Executive under
benefit plans and programs of the Company existing as of the date
of the Executive's death.
9. In the event any excise tax under Section 4999 (or any successor section)
of the Internal Revenue Code (the "Excise Tax") is levied at any time on
any amount paid pursuant to Paragraphs 3, 5, 6 or 7 of this Agreement, in
addition to the amounts payable to the Executive pursuant to Paragraphs 3,
5, 6 or 7 of this Agreement, the Company shall promptly pay the Executive
an amount designated as the "Gross-Up Amount" such that the Gross-Up Amount
minus the Excise Tax on the Gross-Up Amount
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equals the Excise Tax on the amounts payable to the Executive pursuant
to such Paragraphs.
10. Notwithstanding any provision of this Agreement to the contrary, this
Agreement and any payments, benefits or rights of the Executive as
provided herein are subject to Section 18(k) of the Federal Deposit
Insurance Act, as amended, and any applicable regulations thereunder.
11. Unless specifically provided otherwise herein, the Company's and the
Bank's obligation to make the payments and the arrangements provided
for herein shall be absolute and unconditional, and shall not be
affected by any circumstances, including, without limitation, any
offset, counterclaim, recoupment, defense or other right which the
Company or the bank may have against the Executive or any other party.
All amounts payable by the Company and the Bank hereunder shall be paid
without notice or demand. Each and every payment made hereunder by the
Company and the Bank shall be final, and neither the Company nor the Bank
shall seek to recover all or any part of such payment from the Executive
or from whomsoever may be entitled thereto, for any reasons whatsoever.
12. This Agreement establishes and vests in the Executive a contractual right
to the benefits to which he is entitled hereunder. However, nothing herein
contained shall require or be deemed to require, or prohibit or be deemed
to prohibit, the Company or the Bank to segregate, earmark, or otherwise
set aside any funds or other assets, in trust or otherwise, to provide for
any payments to be made or required hereunder.
13. In the event that it shall be necessary or desirable for the Executive
to retain legal counsel and/or incur other costs and expenses in
connection with the enforcement of any or all of his rights under this
Agreement, and provided that the executive substantially prevails in
the enforcement of such rights, the Company or the Bank, as
applicable, shall pay (or the Executive shall be entitled to recover
from the Company or the Bank, as the case may be) the Executive's
reasonable attorneys' fees, costs and expenses in connection with the
enforcement of his rights including the enforcement of any arbitration
award.
14. The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any
provision of this Agreement, and the obtaining of any such other
employment shall in no event effect any reduction of the Company's or
the Bank's obligations to make the payments and arrangements required
to be made under this Agreement, except to the extent otherwise
specifically provided herein.
15. Any controversy or claim arising out of or relating to this Agreement
or the breach thereof (including the arbitrability of any controversy
or claim), shall be settled by arbitration in the City of Pittsburgh
in accordance with the laws of the Commonwealth of Pennsylvania by
three (3) arbitrators, one of whom shall be appointed by the
Company or the Bank, as applicable, one by the Executive, and the
third of whom shall be appointed by the first two (2) arbitrators.
If the first two (2) arbitrators cannot agree on the appointment of
a third arbitrator, then the third arbitrator shall be appointed by
the American Arbitration Association. The arbitration shall be
conducted in accordance with the rules of the American Arbitration
Association, except with respect to the selection of arbitrators which
shall be as provided in this Section 7.1. The cost of any arbitration
proceeding hereunder shall be borne equally by the Company or the
Bank, as applicable, and the Executive. The award of the arbitrators
shall be binding upon the parties.
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Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
16. The Executive, the Company, and the Bank acknowledge that, except as
may be provided under any other agreement between the Executive and
the Company or the Bank, the employment of the Executive by the
Company and the Bank is "at will," and, prior to the effective date of
a Change in Control, may be terminated by either the Executive, the
Company, or the Bank, at any time. Upon a termination of the
Executive's employment prior to the effective date of a Change in
Control, there shall be no further rights under this Agreement;
provided, however, that if such an employment termination shall arise
in connection with, or in anticipation of, a Change in Control, then
the Executive's rights shall be the same as if the termination had
occurred during the Term of Employment hereunder.
17. All notices, requests, demands, and other communications hereunder
must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by
first-class certified mail, return receipt requested, postage prepaid,
to the other party, addressed as follows:
(a) as to the Company:
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
(b) if to the Executive:
00 Xxxxxxxxx Xxxxx Xxxx.
Xxxxxxxxx, XX 00000
18. The compensation and benefits provided pursuant to Paragraph 5 hereof,
to the extent received by the Executive, are granted to the Executive
in lieu of any compensation, benefits or amounts the Executive might
otherwise be entitled to under the Company's severance policy or
otherwise from the Company by reason of a Termination of Employment.
Except as otherwise set forth herein, this Agreement shall not in any
way alter the rights and obligations of the Company and the Executive
under any of the Company's benefit plans.
19. The rights of the Executive under this Agreement shall not be
transferable by assignment or otherwise, shall not be subject to
commutation or encumbrance and shall not be subject to the claims of
the creditors of the Executive.
20. This Agreement shall be binding upon and inure to the benefit of the
Executive, his designated beneficiary, personal representative,
executor or administrator, the Company and any successor, including
any organization which shall succeed to substantially all of the
business and property of the Company, whether by means of merger,
consolidation, acquisition or substantially all of the assets of the
Company or otherwise, including by operation of law (a "Successor
Organization"). The Company shall not merge, reorganize, consolidate,
sell all or substantially all of its assets, combine by operation of
law or otherwise combine, to or with any Successor Organization,
unless, as a condition to such transaction, the Successor Organization
assumes the obligations of the Company under this Agreement. For
purposes of this Agreement the term Company shall include any
Successor Organization.
21. This Agreement has been made in and shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
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22. The invalidity of any term of this Agreement shall not invalidate or
otherwise affect any other term of this Agreement.
23. All costs and expenses, including attorneys' fees and court costs,
reasonably incurred by the Executive to enforce this Agreement or
defend the validity of this Agreement shall be paid by the Company.
24. Notwithstanding anything to the contrary contained above, this
Agreement shall remain in effect through July 31, 1998 at which time,
if there has not been a Change in Control, this Agreement shall lapse
and become null and void unless extended by the Company. The Company
agrees to review this contract approximately six (6) months prior to
its expiration to determine whether the Company wishes to extend the
same for an additional three (3) year term. The Company will promptly
notify employee of its decision.
Each extension of this contract shall be for a three (3) year period
and the Company agrees to review the contract again approximately six
(6) months prior to the expiration of any renewal period and to
promptly notify employee of the Company's decision on renewal.
25. This Agreement supersedes and makes void any prior agreement between
the parties and sets forth the entire agreement and understanding of
the parties hereto with respect to the matters covered hereby and may
not be amended or modified except by further written agreement of the
parties. Any beneficiary designation, or any termination or amendment
to any existing designation under this Agreement shall be by written
instrument executed by the Executive and delivered to the Company.
IN WITNESS WHEREOF, the undersigned have set their hands and seals or
caused this Agreement to be signed by a duly authorized officer, on the date
first set out above.
ATTEST: FIRST WESTERN BANCORP, INC.
/s/ XXXXX X. XXXX BY: /s/ XXXX X. XXXXXXXX
------------------------------------ ------------------------------------
XXXX X. XXXXXXXX, CHAIRMAN
WITNESS: EXECUTIVE:
/s/ XXXXXXX X. XXXXXX /s/ XXXXXX X. X'XXXXX
------------------------------------ ---------------------------------------
XXXXXX X. X'XXXXX
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