Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, made this
25th day of October, 2000, by and between FIRST LIBERTY BANK &
TRUST, a Pennsylvania banking corporation (hereinafter referred
to as "the Bank"), and XXXXXX X. XXXXXXXXXX, an individual
(hereinafter referred to as "the Executive").
W I T N E S S E T H :
WHEREAS, the Bank and Executive entered into an Employment
Agreement (the "Prior Employment Agreement") dated May 25, 2000;
and
WHEREAS, the Bank and the Executive desire to amend and
restate the Prior Employment Agreement in its entirety in the
manner set forth in this Agreement.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth herein, the Bank and the Executive,
intending to be legally bound hereby, agree as follows:
1. Employment. The Bank hereby employs the Executive as
General Counsel, and the Executive hereby accepts this
employment and agrees to render such services to the Bank on the
terms and conditions set forth in this Agreement.
2. Duties of the Executive. The Executive shall perform
and discharge well and faithfully such duties as an executive
officer of the Bank as may be assigned to the Executive from
time to time by the Board of Directors of the Bank. The
Executive shall be employed as General Counsel of the Bank, and
shall hold such other titles as may be given to him from time to
time by the Board of Directors of the Bank. The Executive shall
devote his full time attention and energies to the business of
the Bank and shall not, during the Employment Period (as defined
in Section 3 hereof), be employed or involved in any other
business activity, whether or not such activity is pursued for
gain, profit or other pecuniary advantage; provided, however,
that this Section 2 shall not be construed as preventing the
Executive from (i) investing the Executive's personal assets,
(ii) acting as a member of the Board of Directors of the Bank or
any other corporation or as a member of the Board of Trustees of
any other organization, or (iii) being involved in any other
activity with the prior approval of the Board of Directors of
the Bank.
3. Term of Employment. The Executive's employment under
this Agreement shall be for a period (the "Employment Period")
commencing upon the date of this Agreement and ending at the end
of the term of this Agreement pursuant to Section 15 hereof,
unless the Executive's employment is sooner terminated in
accordance with Section 5 hereof or one of the following
provisions:
(a) The Executive's employment under this Agreement
may be terminated at any time during the Employment Period for
"Cause" (as herein defined), by action of the Board of Directors
of the Bank, upon giving notice of such termination to the
Executive at least fifteen (15) days prior to the date upon
which such termination shall take effect. As used in this
Agreement, "Cause" means any of the following events:
(i) The Executive is convicted of or enters a
plea of guilty or nolo contendere to a felony, a crime of
falsehood, or a crime involving fraud or moral turpitude, or the
actual incarceration of the Executive for a period of thirty
(30) consecutive days;
(ii) The Executive willfully fails to follow the
instructions of the Board of Directors of the Bank after the
Executive's receipt of written notice of such instructions,
other than a failure resulting from the Executive's incapacity
because of physical or mental illness;
(iii) The Federal Deposit Insurance Corporation,
the Pennsylvania Department of Banking, or any other government
regulatory agency recommends or orders in writing that the Bank
terminate the employment of the Executive with the Bank or
relieve him of his duties as such relate to the Bank;
(iv) The Executive's material violation of
federal or state securities or banking laws;
(v) The Executive's intentional failure to comply
in any material respect with the Bank's written policies and
procedures of which he has actual notice (for purposes of this
clause, any failure of the Executive to comply with a particular
policy or procedure following written notice to the Executive of
a failure to comply with such policy or procedure, and any
failure of the Executive to comply with a policy or procedure
which has been designated by written notice to the Executive to
be of sufficient materiality to the operation supervised by the
Executive that such failure, if unintentional, constituted a
reckless disregard for such policy or procedure, shall be deemed
to be an intentional failure);
(vi) The Executive's failure, whether intentional
or unintentional, on three (3) or more occasions during any
twelve (12) month period (after the first of which the Executive
was notified in writing of such failure) to comply in all
material respects with all of the Bank's written policies and
procedures of which he has actual notice; or
(vii) The Executive's material breach of this
Agreement.
If the Executive's employment is terminated under the provisions
of this Section 3(a), then all rights of the Executive under
Section 4 hereof shall cease as of the effective date of such
termination.
(b) The Executive's employment under this Agreement
may be terminated at any time during the Employment Period
without "Cause" (as defined in Section 3(a) hereof) by action of
the Board of Directors of the Bank upon giving notice of such
termination to the Executive at least thirty (30) days prior to
the date upon which such termination shall take effect. If the
Executive's employment is terminated under the provisions of
this Section 3(b), then the Executive shall be entitled to
receive the compensation set forth in section 6 hereof.
(c) If the Executive retires or dies, the Executive's
employment under this Agreement shall be deemed terminated as of
the date of the Executive's retirement or death, and all rights
of the Executive under Section 4 hereof shall cease as of the
date of such termination and any benefits payable to the
Executive shall be determined in accordance with the retirement
and insurance programs of the Bank then in effect.
(d) If the Executive is incapacitated by accident,
sickness, or otherwise, so as to render the Executive mentally
or physically incapable of performing the services required of
the Executive under section 2 of this Agreement for an aggregate
of one hundred eighty (180) days or one hundred twenty (120)
consecutive days during any period of twelve (12) months, then,
upon the expiration of either of such periods or at any time
thereafter, by action of the Board of Directors of the Bank, the
Executive's employment under this Agreement may be terminated
immediately upon giving the Executive notice to that effect. If
the Executive's employment is terminated under the provisions of
this section 3(d), then all rights of the Executive under
Section 4 hereof shall cease as of the last business day of the
week in which such termination occurs and any benefits payable
to the Executive shall be determined in accordance with the
retirement and insurance programs of the Bank then in effect.
4. Employment Period Compensation.
(a) Salary. For services performed by the Executive
under this Agreement, the Bank shall pay the Executive a salary,
in the aggregate, during the Employment Period, at the rate of
One Hundred and Twenty-Five Thousand ($125,000.00) Dollars per
year, payable at the same times as salaries are payable to other
executive employees of the Bank. The Bank may, from time to
time, increase the Executive's salary, and any and all such
increases shall be deemed to constitute amendments to this
Section 4(a) to reflect the increased amounts, effective as of
the dates established for such increases by the Board of
Directors of the Bank in the resolutions authorizing such
increases.
(b) Other Benefits. The Bank will provide the
Executive, during the Employment Period, with insurance,
vacation, pension, and other fringe benefits in the aggregate
not less favorable than those received by other executive
employees of the Bank, including, but not limited to, a paid
vacation of four (4) weeks per year.
(c) Business Expenses. The Bank shall reimburse the
Executive or otherwise provide for or pay for all reasonable
expenses incurred by the Executive in furtherance or in
connection with the business of the Bank including, but not
limited to, automobile and traveling expenses, and all
reasonable entertainment expenses (whether incurred at the
Executive's residence, while traveling or otherwise) subject to
such reasonable limitations as may be established by the Bank's
Board of Directors. The Executive shall present the Bank with
an itemized account of all expenditures for which the Executive
seeks reimbursement at least monthly during the term of this
Agreement. Such expenses must be deductible by the Bank for
purposes of federal income taxation to be paid by the bank. If
such expenses are paid in the first instance by the Executive,
the Bank will reimburse the Executive.
5. Resignation of the Executive for Good Reason.
(a) The Executive may resign at any time during the
Employment Period following an event of "Good Reason." As used
in this Agreement, "Good Reason" shall mean the occurrence of a
"Change in Control," as defined in Section 5(b) hereof, as
hereinafter set forth.
(b) As used in this Agreement, "Change in Control"
means a change of control of either First Liberty Bank Corp.
("FLBC") or the Bank of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as enacted and in force on the
date hereof, whether or not FLBC or the Bank is then subject to
such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have
occurred if:
(i) any "person" (including a group acting in
concert, as the term "person" is defined in Section 13(d) of the
Exchange Act, as enacted and in force on the date hereof)
becomes the "beneficial owner" (as that term is defined in
Rule 13d-3, as enacted and in force on the date hereof, under
the Exchange Act) of securities of FLBC representing 19.9% or
more of the combined voting power of FLBC's securities then
outstanding; or
(ii) there occurs a merger, consolidation or
other business combination or reorganization to which FLBC or
the Bank is a party, whether or not approved in advance by the
Board of Directors of FLBC or the Bank (as the case may be), in
which (A) the members of the Board of Directors of FLBC or the
Bank (as the case may be) immediately preceding the consummation
of such transaction do not constitute a majority of the members
of the Board of Directors of the resulting corporation and of
any parent corporation thereof immediately after the
consummation of such transaction, and (B) the shareholders of
the acquired corporation immediately before such transaction do
not hold 51% or more of the voting power of securities of the
resulting corporation; or
(iii) there occurs a sale, exchange, transfer, or
other disposition of substantially all of the assets of FLBC or
the Bank to another entity, whether or not approved in advance
by the Board of Directors of FLBC or the Bank (as the case may
be); or
(iv) a plan of liquidation or dissolution, other
than pursuant to bankruptcy or insolvency, is adopted by FLBC or
the Bank; or
(v) during a period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of FLBC cease to constitute a majority of
such Board (unless the election or nomination of each new
director was approved by a vote of at least 51% of directors who
were directors at the beginning of such period).
(c) At any time following the occurrence of an event
constituting Good Reason, the Executive may resign from
employment under this Agreement by a notice in writing (the
"Notice of Termination") delivered to the Bank (or its
successor) and the provisions of Section 6 hereof shall
thereupon apply.
6. Rights in Event of Termination of Employment. In the
event that the Executive resigns from employment for Good Reason
under Section 5 above, or the Executive's employment is
terminated without Cause, the Bank shall pay as severance to the
Executive an amount equal to the Executive's current annual base
salary in effect as of the date of termination multiplied by two
(2), such payment to be made to the Executive in one lump sum
within fifteen (15) days after the date of termination. In
addition, for a period of two (2) years following the
Executive's termination of employment for Good Reason or
termination of the Executive's employment without Cause, the
Executive shall also receive a continuation of all life,
disability, medical insurance and other normal benefits in
effect with respect to the Executive at any time during the two
(2) years prior to his termination of employment, or, if the
Bank cannot provide such benefits because the Executive is no
longer an employee, a dollar amount equal to the cost to the
Executive of obtaining such benefits (or substantially similar
benefits).
7. Covenant Not to Solicit Customers or Clients. The
Executive hereby acknowledges and recognizes the highly
competitive nature of the business of the Bank and accordingly
agrees that, for a period of twenty-four (24) months following
termination of the Executive's employment, the Executive shall
not, directly or indirectly, solicit the sale of, or sell, any
financial services or products, including, but not limited to,
any financial services or products offered by the Bank during
the period of the Executive's employment, to any person, firm,
corporation, or enterprise who or which were customers or
clients of the Bank during the period of the Executive's
employment; provided, however, that the foregoing restrictions
shall not apply to (i) advertising, solicitations or marketing
campaigns, programs or other efforts undertaken by a subsequent
employer of the Executive not primarily directed to, or targeted
at, such customers or clients and (ii) responses to unsolicited
inquiries of such customers or clients.
8. Remedies. The Executive acknowledges and agrees that
the remedy at law of the Bank for a breach or threatened breach
of any of the provisions of Section 7 hereof would be inadequate
and, in recognition of this fact, in the event of a breach or
threatened breach by the Executive of any of the provisions of
Section 7 hereof, it is agreed that, in addition to the remedy
at law, the Bank shall be entitled to, without posting any bond,
and the Executive agrees not to oppose any request of the Bank
for, equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent
injunction, or any other equitable remedy which may then be
available. Nothing herein contained shall be construed as
prohibiting the Bank from pursuing any other remedies available
to them for such breach or threatened breach.
9. Arbitration. The Bank and the Executive recognize that
in the event a dispute should arise between them concerning the
interpretation or implementation of this Agreement, lengthy and
expensive litigation will not afford a practical resolution of
the issues within a reasonable period of time. Consequently,
each party agrees that all disputes, disagreements and questions
of interpretation concerning this Agreement are to be submitted
for resolution to the American Arbitration Association
("Association") in Scranton, Pennsylvania, and the Bank, or the
Executive, may initiate an arbitration proceeding at any time by
giving notice to the other in accordance with the rules of the
Association. The Association shall designate a single
arbitrator to conduct the proceeding, but the Bank, and the
Executive, may, as a matter of right, require the substitution
of a different arbitrator chosen by the Association. Each such
right of substitution may be exercised only once. The
arbitrator shall not be bound by the rules of evidence and
procedure of the courts of the Commonwealth of Pennsylvania but
shall be bound by the substantive law applicable to this
Agreement. The decision of the arbitrator, absent fraud,
duress, incompetence or gross and obvious error of fact, shall
be final and binding upon the parties and shall be enforceable
in courts of proper jurisdiction. Following written notice of a
request for arbitration, the Bank, and the Executive, shall be
entitled to an injunction restraining all further proceedings in
any pending or subsequently filed litigation concerning this
Agreement, except as otherwise provided herein.
10. Notices. Any notice required or permitted to be given
under this Agreement shall be deemed properly given if in
writing and if mailed by registered or certified mail, postage
prepaid with return receipt requested, to the residence of the
Executive, in the case of notices to the Executive, and to the
principal office of the Bank, in the case of notices to the
Bank.
11. 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 an executive officer of the Bank, such
officer being specifically designated by the Board of Directors
of the Bank. 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. Assignment. This Agreement shall not be assignable by
any party hereto, except by the Bank to any successor in
interest to the business of the Bank.
13. Entire Agreement. This Agreement contains the entire
agreement of the parties relating to the subject matter of this
Agreement and supersedes any prior agreement relating to the
subject matter hereof, including without limitation the Prior
Employment Agreement.
14. Successors, Binding Agreement.
(a) The Bank will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and/or
assets of the Bank to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Bank would be required to perform it if no such succession had
taken place. Failure by the Bank to obtain such assumption and
agreement prior to the effectiveness of any such succession
shall constitute a material breach of this Agreement. As used
in this Agreement, the "Bank" shall mean the Bank as
hereinbefore defined and any successor to the business and/or
assets of the Bank as aforesaid which assume and agrees to
perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs, distributees,
devisees, and legatees. If the Executive should die while any
amount is payable to the Executive under this Agreement if the
Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive's devisee, legatee or
other designee, or, if there is no such designee, to the
Executive's estate.
15. Termination.
(a) Unless the Executive's employment is terminated
pursuant to the provisions of Section 3 or Section 5 hereof, the
terms of this Agreement shall be a term commencing on
October 25, 2000, and ending on June 30, 2002;
(b) Any termination of the Executive's employment
under this Agreement or of this Agreement shall not affect the
provisions of Sections 6, 7, or 8 hereof, which shall survive
any such termination and remain in full force and affect in
accordance with their respective terms.
16. No Mitigation or Offset. The Executive shall not be
required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking employment or
otherwise. No amounts or benefits payable or to be provided to
the Executive under this Agreement shall be reduced by or offset
against any other amounts paid or payable to, or received or to
be received, by the Executive from any source, including without
limitation another employer.
17. Validity. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
18. Applicable Law. This Agreement shall be governed by
and construed in accordance with the domestic laws (but not the
law of conflict of laws) of the Commonwealth of Pennsylvania.
19. Headings. The headings of the Sections of this
Agreement are for convenience only and shall not control or
affect the meaning or construction or limit the scope or intent
of any of the provisions of this Agreement.
20. Effective Date. This Agreement shall become effective
immediately upon the execution and delivery of this Agreement by
the parties hereto.
21. Legal Expenses. The Bank shall pay to the Executive
any and all legal fees and expenses incurred by the Executive in
obtaining or enforcing any right or benefit provided by this
Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
FIRST LIBERTY BANK & TRUST
__________________________________
Chairman Board of Directors
("BANK")
__________________________________
Xxxxxx X. Xxxxxxxxxx
("EXECUTIVE")
