FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.1
FIRST
AMENDMENT TO
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
First Amendment to Amended and
Restated Employment Agreement (this “Amendment”) is entered into on
September 6, 2007, but is made effective as set forth in Section 7 below,
by and
among Keystone Nazareth Bank & Trust Company (“KNBT Bank”), KNBT
Bancorp, Inc. (“KNBT”), National Penn Bank (“NPBank”), National
Penn Bancshares, Inc. (“NPB” and together with NPBank, the
“Employer”), and Xxxxx X. Xxxxxx (the “Executive”).
BACKGROUND
1. KNBT
is a Pennsylvania
business corporation, and KNBT Bank is a Pennsylvania chartered savings bank
and
wholly-owned subsidiary of KNBT.
2. The
Executive is
presently employed by each of KNBT and KNBT Bank as its President and Chief
Executive Officer pursuant to an Amended and Restated Employment Agreement,
dated December 28, 2006 (the “Employment Agreement”).
3. On
September 6, 0000, XXX
and KNBT entered into an Agreement (the “Merger Agreement”) providing,
among other things, for the merger of KNBT with and into NPB (the
“Merger”), to be followed by the Bank Merger (as defined in the Merger
Agreement).
4. It
is the desire of the
boards of directors of NPB and NPBank that the Executive continue the
Executive’s employment from and after the Effective Time (as defined in the
Merger Agreement), on the terms and conditions set forth in the Employment
Agreement, as amended by this Amendment, in order that the experience the
Executive has gained throughout the Executive’s career and the management
ability the Executive has demonstrated will continue to be available to NPB
and
NPBank. The Executive is willing to continue such employment on the
terms and conditions set forth in the Employment Agreement, as amended by
this
Amendment.
AGREEMENT
NOW
THEREFORE, for good and valuable consideration the receipt and sufficiency
of
which are hereby acknowledged, and intending to be legally bound hereby,
the
parties agree as follows:
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1.
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Definitions.
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a.
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All
references to the “Bank,” the “Company” and the “Employer” in the
Employment Agreement shall be amended as
follows:
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i.
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“Bank”
shall mean NPBank;
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ii.
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“Company”
shall mean NPB; and
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iii.
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“Employer”
shall mean collectively NPBank and
NPB;
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in
each
case, as defined in the introductory paragraph of this Amendment. All
references to the “Effective Time” in this Amendment shall mean the Effective
Time as defined in the Merger Agreement.
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b.
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All
references to “the Agreement” or “this Agreement” contained in the
Employment Agreement shall be deemed, for all purposes, to mean
the
Employment Agreement, as amended by this
Amendment.
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c.
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Capitalized
terms used, but not otherwise defined, in this Amendment shall
have the
meanings ascribed to such terms in the Employment Agreement, as
amended by
this Amendment.
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2.
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Duties. The
first sentence of Section 3(a) of the Employment Agreement shall
be
deleted in its entirety and replaced as
follows:
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Throughout
the Employment Period, the Executive shall serve as President and Chief
Executive Officer of the Bank and Senior Executive Vice President and Chief
Operating Officer of the Company, having such power, authority and
responsibility and performing such duties as are prescribed by or under the
Bylaws of each of the Bank and the Company and as are customarily associated
with such positions.
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3.
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Election
to Bank’s Board of Directors. Section 3(b) of the
Employment Agreement shall be deleted in its entirety and replaced
as
follows:
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During
the period of the Executive’s employment hereunder, the board of directors of
the Company will cause the Company, as sole shareholder of the Bank, to elect
and annually re-elect the Executive to the board of directors of the Bank
(unless it believes such action would violate its fiduciary duties). Upon
any
termination of the Executive’s employment hereunder for any reason, including,
without limitation, a termination without cause, the Executive will concurrently
resign from the board of directors of the Bank and, should the Executive
then be
serving as a director of the Company or any direct or indirect subsidiary
or
affiliate of the Company or Bank, from all such boards as well.
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4.
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Cash
and Other Compensation. Section 4(a) of the Employment
Agreement shall be amended by adding the following sentence at
the end
thereof:
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Notwithstanding
the foregoing, the parties acknowledge and agree that Executive’s Base Salary
for the fiscal year beginning January 1, 2008 shall be determined by the
Compensation Committee of KBNT’s board of directors, but in no event shall such
Base Salary be less than $422,300 nor more than $443,415.
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5.
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Working
Facilities and Expenses.
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a.
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The
first sentence of Section 8 of the Employment Agreement shall be
deleted
in its entirety and replaced as
follows:
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It
is
understood by the parties that the Executive’s principal place of employment
shall be at the Employer’s office located at Reading and Philadelphia Avenues in
Boyertown, Pennsylvania, or at such other location within a 25-mile radius
of
such office, or at such other location as the Employer and the Executive
may
mutually agree upon.
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b.
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The
last sentence of Section 8 of the Employment Agreement shall be
deleted in
its entirety and replaced as
follows:
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The
Employer shall reimburse the Executive for his ordinary and necessary business
expenses attributable to the Employer’s business, including, without limitation,
the Executive’s travel and entertainment expenses incurred in connection with
the performance of his duties for the Employer under this Agreement, in each
case upon presentation to the Employer of an itemized account of such expenses
in such form as the Employer may reasonably require, with such reimbursement
to
be paid promptly by the Employer and in any event no later than March 15
of the
year immediately following the year in which such expenses were
incurred. For the avoidance of doubt, except for (a) the automobile
allowance payable to the Executive under Section 5(b) hereof and (b) tolls
and
parking expenses incurred in the ordinary course of business, the Executive
shall not be entitled to reimbursement under the immediately preceding sentence
for any expenses incurred for automobile travel, including, without limitation,
mileage expense.
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6.
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Termination
of Employment With Benefits. Section 9(a)(i)(D) of the
Employment Agreement shall be deleted in its entirety and replaced
as
follows:
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(D) a
change in the Executive’s principal place of employment by a distance in excess
of 25 miles from the Employer’s office located at Reading and Philadelphia
Avenues in Boyertown, Pennsylvania;
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7.
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Payments
Upon a Change of Control. Section 11(c) of the Employment Agreement
shall be deleted in its entirety and replaced as
follows:
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Upon
the
occurrence of the events specified in this Section 11(c), the Executive shall
be
entitled to receive certain payments at the times and in the amounts as
follows:
(i) As
a result of the change in control of KNBT Bancorp, Inc. (“KNBT”) and Keystone
Nazareth Bank & Trust Company (“KNBT Bank”) resulting from the merger of
KNBT with and into the Company, the Executive shall receive a lump sum payment
as of the Effective Time in an amount equal to $740,503 (the “KNBT CIC
Payment”) from KNBT or KNBT Bank.
(ii) The
Executive shall receive a Severance Payment (defined below) from the Employer
within ten (10) business days of the earliest to occur of the following events,
if any: (A) the termination of the Executive’s employment during the
two-year period immediately following the Effective Time by the Employer
other
than for cause; (B) the termination of the Executive’s employment during the
two-year period immediately following the Effective Time by the Executive
pursuant to Section 9(a)(i) above; or (C) a Change in Control during the
period
of the Executive’s employment hereunder (each, a “Triggering
Event”). “Severance Payment” means a lump sum payment
determined as follows: (x) if the Triggering Event occurs during the
one-year period immediately following the Effective Time, then the Severance
Payment shall equal the KNBT CIC Payment; or (y) if the Triggering Event
occurs
after the one-year anniversary of the Effective Time, then the Severance
Payment
shall equal 1.5 times the Executive’s Base Amount (defined below);
provided, however, that in calculating the
Executive’s Base Amount for purposes of this clause (y), any income related to
the KNBT CIC Payment shall be excluded from such
calculation. “Base Amount” shall be equal to the Executive’s
average annualized income from the Employer, KNBT, KNBT Bank and their
predecessors includible in the Executive’s gross income (excluding any income
resulting from the vesting of restricted stock or the exercise of non-qualified
options on or prior to December 31, 2004) for the most recent five taxable
years
ending before the Triggering Event.
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(iii) The
Executive shall not be entitled to receive any payments or benefits under
Section 9 of this Agreement if he receives payments pursuant to Section
11(c)(ii).
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8.
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Effectiveness. Sections
1 through 3 and Sections 5 through 7 of this Amendment shall become
effective as of the Effective Time. The remainder of this
Amendment shall become effective upon execution by the parties
hereto as
set forth herein.
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9.
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Counterparts;
Facsimiles. This Amendment may be executed in any number of
separate counterparts, all of which, when delivered, shall together
constitute one and the same Amendment. Facsimile signatures
shall be considered original
signatures.
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10.
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Governing
Law. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania
applicable to contracts entered into and to be performed entirely
within
the Commonwealth of Pennsylvania.
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11.
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Conflicts;
No Other Amendments. To the extent that any term or
provision of this Amendment is or may be deemed expressly inconsistent
with any term or provision in the Employment Agreement, the terms
and
provisions hereof shall control. Except as expressly amended by
this Amendment, all of the terms, conditions and provisions of
the
Employment Agreement are hereby ratified and continue unchanged
and remain
in full force and effect. Neither this Amendment nor the
Employment Agreement shall be amended or otherwise changed except
by
another agreement signed by each party to this
Amendment.
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[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties have executed this Amendment on the date and
year
first above written, to be effective as set forth above.
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KNBT
BANCORP, INC.
By:
/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx
X.
Xxxxxxx
Its: Chairman
of the
Board
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NATIONAL
PENN BANCSHARES, INC.
By:
/s/ Xxxxx X. Xxxxx
Name: Xxxxx
X.
Xxxxx
Its: President
and
CEO
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KEYSTONE
NAZARETH
BANK
& TRUST COMPANY
By:
/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx
X.
Xxxxxxx
Its: Chairman
of the
Board
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NATIONAL
PENN BANK
By:
/s/ Xxxxx X. Xxxxx
Name: Xxxxx
X.
Xxxxx
Its: President
and
CEO
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EXECUTIVE:
/s/
Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx
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