Exhibit 10.4
NATIONAL PENN BANK
AMENDATORY AGREEMENT
FOR A. XXX XXXXXXX
THIS AGREEMENT is made this 24th day of September 2002, by and between
National Penn Bank, a national banking association located at Philadelphia and
Reading Avenues, Xxxxxxxxx, Xxxxxxxxxxxx 00000 ("Employer") and A. Xxx Xxxxxxx,
an individual residing at 000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxx
("Employee").
IN CONSIDERATION OF the mutual covenants contained herein and in the
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement") by and among National Penn Bancshares, Inc. ("NPB"), Employer, and
FirstService Bank ("FSB"), Employer and Employee agree, effective as of the
Effective Date (as defined in the Merger Agreement), as follows:
1.) Except as otherwise provided hereinafter, assumes the obligations
of FSB under the Supplemental Executive Retirement Plan ("SERP") for Employee, a
true and correct copy of which is attached hereto and made part hereof as
Exhibit "A."
2.) Employer acknowledges that a "takeover" has occurred and a
"takeover" determination has been made by FSB under the SERP.
3.) Employer and Employee hereby amend the SERP to provide a new
Article 8, as follows:
Article 8
Pension Plan
8.1) During the term of Employee's employment with Employer,
Employee will be entitled to participate in NPB's defined benefit pension plan,
assuming such plan remains in effect, and if it does not, to participate in any
subsequent plan covering the employees of NPB or Employer which may hereafter be
adopted by NPB or Employer (the "Pension Plan").
8.2) Each payment to be made to Employee or to Employee's
"designated beneficiary" under the SERP shall be reduced, dollar-for-dollar, by
any amount concurrently paid to Employee or to Employee's "designated
beneficiary" pursuant to the Pension Plan or any annuity acquired, or other plan
or arrangement adopted, by NPB or Employer in substitution for benefits vested
under the Pension Plan.
8.3) Employee hereby agrees to make an election under the Pension
Plan, or under any annuity acquired, or other plan or arrangement adopted, by
NPB or Employer in substitution for benefits vested under the Pension Plan, to
begin receiving Pension Plan benefits concurrently with the commencement of
payments to Employee under the SERP.
4.) Except as modified herein, the SERP is hereby ratified, affirmed
and approved.
5.) In the event that the Merger Agreement is terminated in accordance
with its terms without consummation of the Merger contemplated thereby, this
Agreement shall be terminated and shall be of no further force and effect.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year
first above written, each intending to be legally bound.
NATIONAL PENN BANK
By: /s/ Xxxxx X. Xxxxxxx
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CEO
Attest: /s/ Xxxxxx X. Xxxxx
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EVP
/s/ A. Xxx Xxxxxxx
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A. Xxx Xxxxxxx
Exhibit A
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR
A. XXX XXXXXXX
INTENDING TO BE LEGALLY BOUND, FIRSTSERVICE BANK ("Bank") and A. XXX
XXXXXXX ("Participant") agree:
ARTICLE 1
PURPOSES
ss.1.1) This Agreement sets forth a "Supplemental Executive Retirement
Plan" (the "Plan") to provide supplemental retirement and other benefits for
certain employees of the Bank including Participant. It is part of an integrated
executive compensation program which is intended to assist the Bank in
motivating and retaining a select group of management and highly compensated
executives of superior ability, industry and loyalty within the meaning of
Sections 201(2), 301(a) (3) and 401(a) (1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). A most important provision relates
to what happens in the event of a possible 'takeover" of the Bank.
ss.1.2) The Plan is intended to be unfunded. While the Bank may
purchase a Bank owned life insurance policy ("BOLI"), the Participant shall not
be deemed to, be an owner or beneficiary of it and shall have no rights with
respect to it. The Bank shall be fully liable to provide the benefits set forth
herein, notwithstanding whatever happens to that policy.
ARTICLE 2
VESTING
ss.2.1) The Participant's interests in the Plan are fully vested upon
the execution of this Agreement but are subject to divestment, meaning all
interests and benefits of the Plan are forfeited and lost, only if: the
Participant's employment is terminated for "cause" by the current management of
the Bank or if the Participant voluntarily terminates his employment and takes
employment with an employer providing products or services or both competitive
to those provided by Bank in any geographic area (within the Counties of Bucks,
Xxxxxxxxxx, Xxxxxxx, Delaware, Lehigh and Philadelphia and the county or
principal geographical area of any bank or other business entity hereafter
acquired by the Bank, any of its subsidiaries or parent) where the Bank is then
providing services within two (2) years of termination of employment. The Bank's
Board of Directors shall be the sole judge and make the final determination as
to whether or not "cause" exists for termination or whether the Participant has
taken employment with an employer in competition with the Bank. In the event of
a possible "takeover" of the Bank as described below, the Participant's
interests shall be fully vested, not subject to divestment for "cause" or by
taking employment with a competitor.
ss.2.2) The term 'cause" shall have the same meaning as that used in
the Participant's employment agreement with the Bank, if any, and shall also
include (a) an
act of dishonesty, by the Participant constituting a felony resulting or
intended to result in gain to or personal enrichment of the Participant at the
expense of the Bank or its patrons, or (b) the willful engaging by the
Participant in misconduct which is injurious to the Bank of (c) the deliberate
and intentional refusal of the Participant to perform substantially his duties
for the Bank or any combination of the foregoing.
ARTICLE 3
BENEFIT ENTITLEMENTS
ss.3.1) The Participant shall be entitled to certain accrued retirement
benefits (the "Accrued Benefits") which are to be paid upon retirement but not
before the Participant reaches age sixty-two (62). The Accrued Benefits shall be
a monthly single life annuity equal to sixty percent (60%) of his compensation
divided by twelve (12). Compensation shall mean only Participant's annual
payroll salary as fixed by the Board of Directors of the Bank for the calendar
year preceding retirement excluding bonuses, fringe benefits, stock options and
the like. Payment to the Participant shall commence to be paid on the first day
of the month following his actual retirement date which is the last day the
Participant received compensation from the Bank. The Accrued Benefits shall be
paid monthly with the final payment to be made on the first day of the month in
which the Participant's death occurs.
ss.3.2) The amount of the Accrued Benefits above, which have been in
pay status for at least a full calendar year, shall not be decreased, but shall
be increased up to a maximum, of four percent (4%) annually each February 1 by
the increase for the month of December from the previous year's December in the
Consumer Price Index - All Urban Consumer (the "CPI-U") for the prior calendar
year applicable for the area which includes Philadelphia, Pennsylvania as
published by the Department of Labor, Bureau of Labor Standards or such
successor Consumer Price Index as most closely corresponds to CPI-U if that
index is no longer published.
ss.3.3) If the Participant retires on account of disability, the
Accrued Benefits shall be modified to an amount which when added to the payments
the Participant receives as a benefit under the Bank's long-term disability plan
aggregates to a sum equal to what the Participant would have received but for
the disability. In other words, the Participant is not entitled to both full
long term disability plan benefits and full Accrued Benefits under this Plan. If
the payments under the disability plan cease for any reason, the full Accrued
Benefits payments shall commence immediately. For example, if the disability
plan provides that its payments cease when the Participant reaches age
sixty-five (65), the full Accrued Benefits become payable monthly beginning the
first month after the disability payments cease. If a Participant dies while
receiving payments under a disability plan and that plan makes no provision of
continuing disability payments for a spouse and the Participant has designated a
spouse to receive spousal benefits, the spouse shall receive eighty percent
(80%) of the Accrued Benefits as if the Participant had not been receiving
disability benefits.
ss.3.4) If the Participant's employment terminates before attaining age
sixty-two (62) and Participant's interests have not been divested, the
Participant shall be entitled to receive the monthly benefit provided for above
commencing as of the first day of the month following the date the Participant
attained age sixty-two (62) which shall be deemed Participant's "retirement"
date.
ss.3.5) If the Participant dies and was married at Participant's death
and has designated Participant's spouse as a beneficiary under the Plan, then,
regardless of Participant's age at Participant's death, Participant's spouse
shall, be entitled to a "spousal benefit" which shall be a monthly single life
annuity equal to eighty percent (80%) of what Participant's Accrued Benefits of
sixty percent (60%) as would have been had the Participant retired on the date
of Participant's death. It shall be paid on the first day of the month following
the month in which the Participant dies and monthly thereafter until the death
of the spouse. If otherwise permissible legally, the Participant may terminate
the designation of a spouse and, in this event, at Participant's death no
further benefits of any kind are payable to anyone.
ss.3.6) There are no other death benefits and no health insurance
benefits under the Plan.
ARTICLE 4
COMMITTEE
ss.4.1) Unless the Bank's Board of Directors otherwise determines, the
Board's Executive Committee shall constitute the Committee which shall govern
the operation of the Plan for the Bank. Neither the Committee, nor its
individual members, nor Bank shall be deemed a fiduciary with respect to the
Plan.
ss.4.2) The Committee shall have the power and duty to do all things
necessary to see the Plan's purposes are performed including provide rules and
regulations of the management, operation and administration of the Plan,
interpret it and correct any defect, supply any omissions or reconcile any
inconsistency in the Plan, subject at all times to the final determination of
the Board of Directors of the Bank. The Committee shall promulgate rules for
calculating the Accrued Benefits are increased based on CPI-U changes.
ss.4.3) No member of the Committee shall be directly or indirectly
responsible or under any liability by reason of any action or default by such
person as a member of the Committee, or the exercise of or failure to exercise
any power or discretion as such member except for such member's own fraud or
willful misconduct. No member of the Committee shall be liable in any way for
the acts of defaults of any other member of the Committee, or any of its
advisors, agents or representatives. The Bank shall indemnify and save harmless
each member of the Committee against any and all expenses and liabilities
arising out of the member's own membership on the Committee, except expenses and
liabilities arising out of a Committee member's own fraud or willful misconduct.
ss.4.4) Members of the Committee who are employees of the Bank shall
receive no compensation for their services rendered as members of the Committee.
Any other members of the Committee who are not employees of the Bank shall
receive such reasonable compensation for their services as may be authorized
from time to time by the Bank. Members of the Committee shall be entitled to
receive their reasonable expenses incurred in administering the Plan. Any such
compensation and expenses, as well as extraordinary expenses authorized by the
Bank, shall be paid by the Bank.
ss.4.5) The Bank shall furnish to the Committee in writing all
information the Bank deems appropriate for the Committee to exercise its powers
and duties in administration of the Plan. Such information shall be conclusive
for all purposes of the Plan and the Committee shall be entitled to rely
thereon, without any investigation thereof; provided, however, that the
Committee may correct any errors discovered in any such information.
ss.4.6) The Committee shall make available to the Participant, or the
Participant's beneficiary, for examination at the principal office of the Bank
(or at such other location as may be determined by the Committee), a copy of the
Plan and such of its records, or copies thereof, as may pertain to any benefits
of such Participant, joint or contingent annuitant and beneficiary under the
Plan.
ARTICLE 5
TAKEOVER
ss.5.1) The Bank, in its Articles of Incorporation and Bylaws, has
extensive provisions relating to "takeovers," or changes in control of the Bank.
These are all incorporated herein by reference. In order to achieve one of the
purposes of the Plan, namely retaining Participant as an employee it is vital to
assure Participant that in the event of a possible change in control of the Bank
or a "takeover," the Participant's benefits under this Agreement will not be
lost by a capricious determination Participant should be fired for "cause" and
Participant's divested. Thus, it is hereby specified and agreed that if there is
a possible change in control of the Bank or a "takeover," Participant's benefits
and interests under this plan are fully vested and may never be divested. The
Participant may not be terminated for "'cause." The Participant may obtain
employment with a competitor all without forfeiting or losing Participant's
benefits under the Plan.
ss.5.2) A change in control in the Bank or a "takeover" shall be deemed
to be possible or to have occurred notwithstanding the "'Super-Majority"
Approvals required for a "Business Combination" in the Articles of Incorporation
when an entity ("acquirer") is about to or takes over de facto control of the
Bank. A change in control or "takeover" shall also be deemed to be possible or
have occurred under any or all of the following circumstances:
A) An acquirer obtains sufficient voting power by acquiring the
stock of the Bank (or any parent of the Bank in the nature of a bank holding
company or the like) to elect one or more directors whether or not such power is
actually used.
B) The Board of Directors of the Bank, as presently constituted or
however it may change, determines formally or informally to sell, merge,
consolidate or otherwise disposes of substantially all of the assets of the Bank
not in the ordinary course of business.
C) An acquirer publicly announces it will attempt to take over the
Bank and begins acquiring the voting stock of the Bank (or its parent, if any)
where the acquirer has the apparent financial ability to acquire the Bank
regardless of whether the proposed "takeover" is "friendly" or "hostile."
D) Any other similar occurrence or series of occurrences that
could lead reasonable persons familiar with events in the financial business
world to conclude that a change in control or "'takeover" of the Bank is
contemplated by an acquirer with the apparent ability to succeed and therefore
"possible."
ss.5.3) The persons who constitute the present Board of Directors of
the Bank are hereby designated as a permanent arbitration panel (the "Panel") to
make all factual and legal determinations under this Article by a simple
majority vote. Each shall serve until adjudication of incapacity or death
without regard to whether or not they are still Directors of the Bank and
without regard to age. The Panel is hereby empowered to make a determination
that a change in control or "takeover" is possible and such a determination
shall automatically mean without further action that Participant's interests and
benefits under the Plan are fully vested, not subject to being divested and that
Participant may not be terminated for "cause" and that Participant may seek
employment with a competitor. The person on the Panel then available who is
senior in age and service to the Bank shall be chairperson of the Panel, convene
a meeting at the request of one or more Participants, and determine if a change
in control or "takeover" is possible or has happened and any other relevant
matters not inconsistent with the Plan.
ss.5.4) If the Panel has determined there is a possible change in
control or "'takeover" of the Bank and Participant's benefits are vested, then,
thereafter, if Participant's employment is terminated for any reason prior to
age sixty-two (62), Participant's base salary shall be deemed to increase at
three percent (3%) per annum for the year of termination and each year
thereafter until Participant attains age sixty-two (62). Termination shall be
deemed to include a reduction in base salary and any failure by the Bank to
increase it at the rate of at least three percent (3%) per annum after the
determination by the Panel of possible change in control or "takeover."
ARTICLE 6
EFFECTIVE DATE, TERMINATION AND AMENDMENT
Participation in this Plan by the Participant shall become effective as of the
date hereof, and shall continue until such time as it or the Plan is terminated
by the Bank. This Plan may be terminated at any time and amended from time to
time by the Bank provided that neither the termination nor any amendment of the
Plan may, without the written consent of the Participant, reduce the
Participant's Accrued Benefits or the benefits payable to the Participant's
beneficiary in the absence of such amendment or the termination of the Plan.
ARTICLE 7
MISCELLANEOUS PROVISIONS
ss.7.1) No benefit payable under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, or
encumbrance and any attempt to anticipate, alienate, sell, transfer, assign,
pledge or encumber such benefit shall be void.
ss.7.2) The Participant or the beneficiary of the Participant shall
rely solely upon the unsecured promise of the Bank, as set forth herein, for the
payment of benefits
under the terms of the Plan, and nothing herein contained shall be construed to
give to or vest in the Participant or any other person now or at any time in the
future, any right, title, interest, or claim in or to any specific asset, fund,
reserve, account, insurance or annuity, policy or contract, or other property of
any kind whatever owned by the Bank, or in which the Bank may have any right,
title, or interest, now or at any time in the future. Any insurance policy or
other assets acquired by the Bank to fund, in whole or in part, the Bank's
liabilities under the Plan shall not be deemed to be held as security for the
performance of the obligations of the Bank hereunder.
ss.7.3) Except as provided above in Section 3.3, it is agreed and
understood that any benefits accrued under this Plan are in addition to any and
all employee benefits to which Participant may otherwise be entitled under any
other contract, arrangement, or voluntary pension, profit sharing or other
compensation plan of the Bank, whether funded or unfunded, and that this Plan
shall not affect or impair the rights or obligations of the Bank or the
Participant under any other such contract, arrangement, or voluntary pension,
profit sharing or other compensation plan.
ss.7.4) If any term or condition of the Plan shall be invalid or
unenforceable to any extent or in any application, then the remainder of the
Plan, with the exception of such invalid or unenforceable provision, shall not
be affected thereby, and shall continue in effect and application to its fullest
extent.
ss.7.5) Neither the establishment of the Plan, any provisions of the
Plan, nor any action of the Committee shall be held or construed to confer upon
the Participant the right to a continuation of employment by the Bank. Subject
to the terms of any applicable employment contract, the Bank reserves the right
to dismiss any employee, or otherwise deal with any employee to the same extent
as though the Plan had not been adopted.
ss.7.6) If the Committee determines that the Participant or beneficiary
is unable to care for the Participant's or the beneficiary's affairs because of
illness or accident, or is a minor, any benefit due the Participant or
beneficiary may be paid to the Participant's or the beneficiary's spouse, child,
parent, or any other person deemed by the Committee to have incurred expense for
the Participant or beneficiary (including a duly appointed guardian, committee
or other legal representative), and any such payment shall be a complete
discharge of the Bank's obligation hereunder.
ss.7.7) The Plan shall be construed, administered and enforced
according to the laws of the Commonwealth of Pennsylvania, except to the extent
that such laws are preempted by the Federal laws of the United States of
America.
ss.7.8) If, pursuant to the provisions of the Plan, the Bank denies the
claim of the Participant or the Participant's beneficiary for benefits under the
Plan, the Bank shall provide written notice, within ninety (90) days after
receipt of the claim, setting forth in a manner calculated to be understood by
the claimant:
(a) the specific reasons for such denial;
(b) the specific reference to the Plan provisions on which the
denial is based;
(c) a description of any additional material or information
necessary to perfect the claim and an explanation of why such material or
information is needed; and
(d) an explanation of the Plan's claim review procedure and the
time limitations of this subsection applicable thereto.
The Participant or the Participant's beneficiary whose claim for
benefit has been denied may request review by the Bank of the denied claim by
notifying the Bank in writing within sixty (60) days after receipt of the
notification of claim denial. As part of said review procedure, the claimant or
the claimant's authorized representative may review pertinent documents and
submit issues and comments to the Bank in writing. The Bank shall render its
decision to the claimant in writing in a manner calculated to be understood by
the claimant not later than sixty (60) days after receipt of the request for
review, unless special circumstances require an extension of time, in which case
decision shall be rendered as soon after the sixty-day period as possible, but
not later than one hundred and twenty (120) days after receipt of the request
for review. The decision on review shall state the specific reasons therefore
and the specific Plan reference on which it is based.
ss.7.9) The Bank and any successor the Bank shall be obligated to pay
all benefits payable under the Plan, without regard to the sufficiency of any
funds or other assets reserved for this purpose, except as is specifically
provided herein.
ss.7.10) The Bank has adopted this Plan the date the Board of Directors
approved it which was August 15, 2001.
EXECUTED on September 11, 2001
FIRSTSERVICE BANK
By: /s/ Xxxx X. Xxxxx
Attest:
PARTICIPANT
/s/ A. XXX XXXXXXX
A. XXX XXXXXXX
