AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 29th day of December, 2006,
between UNION NATIONAL FINANCIAL CORPORATION ("Corporation"), a
Pennsylvania business corporation having a place of business at
000 Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, UNION NATIONAL
COMMUNITY BANK ("Bank") a national banking association having a
place of business at 000 Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx
00000, and XXXX X. XXXXXX ("Executive"), an individual residing
at 000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, this Amended and Restated Employment Agreement
continues in effect the Employment Agreement made between the
parties effective January 1, 2004 with certain modifications; and
WHEREAS, the purpose of this Amended and Restated Employment
Agreement is to meet the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Corporation is a registered bank holding
company; and
WHEREAS, the Bank is a subsidiary of the Corporation; and
WHEREAS, Corporation and Bank desire to employ Executive to
serve in the capacity of President and Chief Executive Officer of
each of Corporation and Bank under the terms and conditions set
forth herein;
WHEREAS, Executive desires to accept employment with
Corporation and Bank on the terms and conditions set forth
herein.
AGREEMENT:
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. Employment. Corporation and Bank hereby employ Executive
and Executive hereby accepts employment with Corporation
and Bank, under the terms and conditions set forth in
this Agreement.
2. Duties of Employee. Executive shall perform and
discharge well and faithfully such duties as an
executive officer of Corporation and Bank as may be
assigned to Executive from time to time by the Board of
Directors of Corporation and Bank. Executive shall be
employed as President and Chief Executive Officer of
Corporation and Chief Executive Officer of Bank, and
shall hold such other titles as may be given to him from
time to time by the Board of Directors of Corporation
and Bank. Executive shall devote his full time,
attention and energies to the business of Corporation
and Bank during the Employment Period (as defined in
Section 3 of this Agreement); provided, however, that
this Section 2 shall not be construed as preventing
Executive from (a) engaging in activities incident or
necessary to personal investments so long as such
investment does not exceed 5% of the outstanding shares
of any publicly held company, (b) acting as a member of
the Board of Directors of any other corporation or as a
member of the Board of Trustees of any other
organization, with the prior approval of the Board of
Directors of Corporation and Bank, or (c) being involved
in any other activity with the prior approval of the
Board of Directors of Corporation and Bank. The
Executive shall not engage in any business or commercial
activities, duties or pursuits which compete with the
business or commercial activities of Corporation or
Bank, nor may the Executive serve as a director or
officer or in any other capacity in a company which
competes with Corporation or Bank.
3. Term of Agreement.
(a) This Agreement shall be for a five (5) year period
(the "Employment Period") beginning on the date of
the Employment Agreement, and if not previously
terminated pursuant to the terms of this Agreement,
the Employment Period shall end five (5) years
later (the "Initial Term"). The Employment Period
shall be extended automatically for one additional
year on the first annual anniversary date of the
commencement of the Initial Term (the date first
above written), and then on each annual anniversary
date of this Agreement thereafter, unless any of
Corporation, Bank or Executive gives contrary
written notice to the other(s) not less than 180
days before any such anniversary date so that upon
the anniversary date if notice had not been
previously given as provided in this Section 3(a),
the Employment Period shall be and continue for a
five-year period thereafter. References in the
Agreement to "Employment Period" shall refer to the
Initial Term of this Agreement and any extensions
to the initial term of this Agreement.
(b) Notwithstanding the provisions of Section 3(a) of
this Agreement, this Agreement shall terminate
automatically for Cause (as defined herein) upon
written notice from the Board of Directors of each
of Corporation and Bank to Executive. As used in
this Agreement, "Cause" shall mean any of the
following:
(i) Executive's conviction of or plea of guilty or
nolo contendere to a felony, a crime of
falsehood or a crime involving moral
turpitude, or the actual incarceration of
Executive for a period of forty five (45)
consecutive days or more;
(ii) Executive's failure to follow the good faith
lawful instructions of the Board of Directors
of Corporation or Bank with respect to its
operations, after written notice from
Corporation or Bank and a failure to cure such
violation within twenty (20) days of said
written notice;
(iii) Executive's willful failure to substantially
perform Executive's duties to Corporation or
Bank, other than a failure resulting from
Executive's incapacity because of physical or
mental illness, as provided in subsection (d)
of this Section 3, after written notice from
Corporation or Bank and a failure to cure
such violation within twenty (20) days of
said written notice;
(iv) Executive's intentional violation of the
provisions of this Agreement, after written
notice from Corporation or Bank and a failure
to cure such violation within twenty (20)
days of said written notice;
(v) dishonesty of the Executive in the
performance of his duties;
(vi) Executive's removal or prohibition from being
an institutional-affiliated party by a final
order of an appropriate federal banking
agency pursuant to Section 8(e) of the
Federal Deposit Insurance Act or by the
Office of the Comptroller of the Currency
pursuant to national law;
(vii) conduct by the Executive as determined by an
affirmative vote of seventy-five percent
(75%) of the disinterested members of the
Board of Directors which brings public
discredit to Corporation or Bank which
results or may be reasonably expected to
result in material financial or other harm to
the Corporation or Bank;
(viii)Executive's breach of fiduciary duty
involving personal profit; or
(ix) unlawful harassment by the Executive against
employees, customers, business associates,
contractors, or vendors of Corporation or
Bank which results or may be reasonably
expected to result in material liability to
Corporation or Bank, as determined by an
affirmative vote of three-fourths (3/4) of
the disinterested independent members of the
Board of Directors of Corporation or Bank,
following an investigation of the claims by a
third party unrelated to the Bank chosen by
the Executive and Corporation. If the
Executive and Corporation do not agree on
said third party, then as chosen by an
affirmative vote of three-fourths (3/4) of
the disinterested independent members of the
Board of Directors of the Corporation.
(x) Before taking any vote under subparagraphs
(vii) and (ix) above, Executive shall be
entitled to appear before the Board and
present Executive's position as to any issues
about which Executive has been notified by
the Board in writing. Such appearance shall
be within a reasonable period of time
following written notice to Executive of the
issues but in no event longer than thirty
days after the date of said written notice.
If this Agreement is terminated for Cause, all of
Executive's rights under this Agreement shall cease
as of the effective date of such termination.
(c) Notwithstanding the provisions of Section 3(a)
of this Agreement, this Agreement shall
terminate automatically upon Executive's voluntary
termination of employment (other than in accordance
with Section 5 of this Agreement) for Good Reason.
The term "Good Reason" shall mean (i) the
assignment of duties and responsibilities
inconsistent with Executive's status as President
and Chief Executive Officer of Corporation and
Bank, (ii) a reassignment which requires Executive
to move his principal residence or his office more
than fifty (50) miles from the Corporation's and
Bank's principal executive office immediately prior
to this Agreement, (iii) any removal of the
Executive from office or any adverse change in the
terms and conditions of the Executive's employment,
except for any termination of the Executive's
employment under the provisions of Section 3(b)
hereof, (iv) any reduction in the Executive's
Annual Base Salary as in effect on the date hereof
or as the same may be increased from time to time,
except such reductions that are the result of a
national financial depression or national or bank
emergency when such reduction has been implemented
by the Board of Directors for the Corporation and
Bank's senior management, or (v) any failure of
Corporation and Bank to provide the Executive with
benefits at least as favorable as those enjoyed by
the Executive during the Employment Period under
any of the pension, life insurance, medical, health
and accident, disability or other employee plans of
Corporation and Bank, or the taking of any action
that would materially reduce any of such benefits
unless such reduction is part of a reduction
applicable to all employees. If such termination
occurs for Good Reason, then Corporation or Bank
shall pay Executive an amount equal to the greater
of the remaining balance of the Agreed Compensation
otherwise due to the Executive for the remainder of
the then existing Employment Period or 2.99 times
the Executive's Agreed Compensation as defined in
subsection (f) of this Section 3, which amount
shall be payable in thirty-six (36) equal monthly
installments and shall be subject to federal, state
and local tax withholdings. In addition, for a
period of three (3) years from the date of
termination of employment, or until Executive
secures substantially similar benefits through
other employment, whichever shall first occur,
Executive shall receive a continuation of all life,
disability, medical insurance and other normal
health and welfare benefits in effect with respect
to Executive during the two (2) years prior to his
termination of employment, or, if Corporation and
Bank cannot provide such benefits because Executive
is no longer an employee, a dollar amount equal to
the cost to Executive of obtaining such benefits
(or substantially similar benefits), but only to
the extent that such payment will not violate
Section 409A of the Code. If permitted under the
terms of the plan, Executive shall receive the
additional retirement benefits to which he would
have been entitled had his employment continued
through the then remaining term of the Agreement.
In the event the payment described herein, when
added to all other amounts or benefits provided to
or on behalf of Executive in connection with
Executive's termination of employment, would result
in the
imposition of an excise tax under Code Section
4999, the last sentence of Section 6(a) hereof
shall apply.
At the option of the Executive, exercisable by the
Executive within ninety (90) days after the
occurrence of the event constituting "Good Reason,"
the Executive may resign from employment under this
Agreement by a notice in writing (the "Notice of
Termination") delivered to Corporation and Bank and
the provisions of this Section 3(c) hereof shall
thereupon apply.
(d) Notwithstanding the provisions of Section 3(a) of
this Agreement, this Agreement shall terminate
automatically upon Executive's Disability and
Executive's rights under this Agreement shall cease
as of the date of such termination; provided,
however, that Executive shall nevertheless be
entitled to receive an amount equal to and no
greater than 70% of the Executive's Agreed
Compensation as defined in subsection (f) of this
Section 3, less amounts payable under any
disability plan of Corporation and Bank, until the
earliest of (i) Executive's return to employment,
(ii) his attainment of age 65, (iii) his death, or
(iv) the end of the then existing Employment
Period. In addition, Executive shall receive for
such period a continuation of all life, disability,
medical insurance and other normal health and
welfare benefits in effect with respect to
Executive during the two (2) years prior to his
disability, or, if Corporation and Bank cannot
provide such benefits because Executive is no
longer an employee, a dollar amount equal to the
cost to Executive of obtaining such benefits (or
substantially similar benefits), but only to the
extent that such payment will not violate Section
409A of the Code. For purposes of this Agreement,
the Executive shall have a Disability if Executive
is unable to engage in any substantial gainful
activity by reason of any medically determinable
physical or mental impairment that can be expected
to result in death or can be expected to last for a
continuous period of not less than twelve (12)
months. The Executive shall have no duty to
mitigate any payment provided for in this Section
3(d) by seeking other employment.
(e) Executive agrees that in the event his employment
under this Agreement is terminated, Executive shall
resign as a director of Corporation and Bank, or
any affiliate or subsidiary thereof, if he is then
serving as a director of any of such entities.
(f) The term "Agreed Compensation" shall equal the sum
of (A) the Executive's highest Annual Base Salary
under the Agreement, and (B) the average of the
Executive's annual bonuses with respect to the
three (3) calendar years immediately preceding the
Executive's termination.
4. Employment Period Compensation.
(a) Annual Base Salary. For services performed by
Executive under this Agreement, Corporation or Bank
shall pay Executive an Annual Base Salary during
the
Employment Period at the rate of $219,450.00 per
year, minus applicable withholdings and deductions,
payable at the same times as salaries are payable
to other executive employees of Corporation or
Bank. Corporation or Bank may, from time to time,
increase Executive's Annual Base 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
date established for such increases by the Board of
Directors of Corporation or Bank or any committee
of such Board in the resolutions authorizing such
increases.
(b) Bonus. For services performed by Executive under
this Agreement, Corporation or Bank may, from time
to time, pay a bonus or bonuses to Executive as
Corporation or Bank, in its sole discretion, deems
appropriate. The payment of any such bonuses shall
not reduce or otherwise affect any other obligation
of Corporation or Bank to Executive provided for in
this Agreement.
(c) Vacations. During the term of this Agreement,
Executive shall be entitled to paid annual vacation
in accordance with the policies as established from
time to time by the Boards of Directors of
Corporation and Bank. However, Executive shall not
be entitled to receive any additional compensation
from Corporation and Bank for failure to take a
vacation, nor shall Executive be able to accumulate
unused vacation time from one year to the next,
except to the extent authorized by the Boards of
Directors of Corporation and Bank.
(d) Automobile. During the term of this Agreement,
Corporation and Bank shall provide Executive with
exclusive use of an automobile mutually agreed upon
by Corporation and Bank. Corporation and Bank shall
be responsible and shall pay for all costs of
insurance coverage, repairs, maintenance and other
operating and incidental expenses, including
license, fuel and oil. Corporation and Bank shall
provide Executive with a replacement automobile at
approximately the time Executive's automobile
reaches three (3) years of age or 50,000 miles,
whichever is first, and approximately every three
(3) years or 50,000 miles thereafter, upon the same
terms and conditions.
(e) Employee Benefit Plans. During the term of this
Agreement, Executive shall be entitled to
participate in or receive the benefits of any
employee benefit plan currently in effect at
Corporation and Bank, subject to the terms of said
plan, until such time that the Boards of Directors
of Corporation and Bank authorize a change in such
benefits. Corporation and Bank shall not make any
changes in such plans or benefits which would
adversely affect Executive's rights or benefits
thereunder, unless such change occurs pursuant to a
program applicable to all executive officers of
Corporation and Bank and does not result in a
proportionately greater adverse change in the
rights of or benefits to Executive as compared with
any other executive officer of Corporation and
Bank. Nothing paid to Executive under any plan or
arrangement presently in effect or made
available in the future shall be deemed to be in
lieu of the salary payable to Executive pursuant to
Section 4(a) hereof.
(f) Business Expenses. During the term of this
Agreement, Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses
incurred by him, which are properly accounted for,
in accordance with the policies and procedures
established by the Boards of Directors of
Corporation and Bank for their executive officers.
(g) Club Membership. Corporation or Bank shall provide
the Executive with a membership to a Country Club
in Pennsylvania mutually agreed upon, paying
initiation and other fees, membership dues,
assessments and business-related expenses.
5. Termination of Employment Following Change in Control.
(a) If a Change in Control (as defined in Section 5(b)
of this Agreement) shall occur and thereafter,
there shall be:
(i) any involuntary termination of Executive's
employment (other than for the reasons set
forth in Section 3(b) or 3(d) of this
Agreement);
(ii) any reduction in Executive's title,
responsibilities, including reporting
responsibilities, or authority, including
such title, responsibilities or authority as
such may be increased from time to time
during the term of this Agreement;
(iii) the assignment to Executive of duties
inconsistent with Executive's office on the
date of the Change in Control or as the same
may be increased from time to time after the
Change in Control;
(iv) any reassignment of Executive to a location
greater than fifty (50) miles from the
location of Executive's office on the date of
the Change in Control;
(v) any reduction in Executive's Annual Base
Salary in effect on the date of the Change in
Control or as the same may be increased from
time to time after the Change in Control;
(vi) any failure to provide Executive with
benefits at least as favorable as those
enjoyed by Executive under any of Corporation
or Bank's retirement or pension, life
insurance, medical, health and accident,
disability or other employee plans in which
Executive participated at the time of the
Change in Control, or the taking of any
action that would materially reduce any of
such benefits in effect at the time of the
Change in Control;
(vii) any requirement that Executive travel in
performance of his duties on behalf of
Corporation or Bank for a significantly
greater period of time during any year than
was required of Executive during the year
preceding the year in which the Change in
Control occurred;
(viii)any sustained pattern of interruption or
disruption of Executive for matters
substantially unrelated to Executive's
discharge of Executive's duties on behalf of
Corporation and Bank; or
(ix) a good faith determination by Executive that
he can no longer work with the new management
of Corporation and Bank.
then, at the option of Executive, exercisable by
Executive within one hundred eighty (180) days of
the Change in Control, Executive may resign from
employment with Corporation and Bank (or, if
involuntarily terminated, give notice of intention
to collect benefits under this Agreement) by
delivering a notice in writing (the "Notice of
Termination") to Corporation and Bank and the
provisions of Section 6 of this Agreement shall
apply.
(b) As used in this Agreement, "a Change in Control"
(other than one occurring by reason of an
acquisition of the Company by Executive) shall be
deemed to have occurred if the Board of Directors
of Corporation or Bank certifies on an objective
basis that one of the following has occurred:
(i) a sale or other transfer of ownership of
forty percent (40%) or more of the total
gross fair market value of the assets of
Corporation and Bank to any individual,
corporation, partnership, trust, or other
entity or organization (a "Person") or group
of Persons acting in concert as a partnership
or other group, other than a Person
controlling, controlled by, or under common
control with Corporation or Bank;
(ii) any Person or group of Persons acting in
concert as a partnership or other group,
other than a Person controlling, controlled
by, or under common control with Corporation
or Bank, acquires ownership of stock in
Corporation, that together with stock held by
such Person or group, constitutes more than
50 percent of the total fair market value or
total voting power of the stock of
Corporation, provided such Person or group
did not own more than 50 percent of the total
fair market value or total voting power of
the stock of Corporation prior to such
acquisition; or
(iii) the replacement of a majority of members of
Corporation's Board of Directors over any
period of one year or less by directors whose
appointment or election is not endorsed by a
majority of the members of
the Corporation's Board of Directors prior to
the date of the appointment or election.
6. Rights in Event of Termination of Employment Following
Change in Control.
(a) In the event that Executive delivers a Notice of
Termination (as defined in Section 5(a) of this
Agreement) to Corporation and Bank, Executive shall
be entitled to receive the compensation and
benefits set forth below:
If, at the time of termination of Executive's
employment, a "Change in Control" (as defined in
Section 5(b) of this Agreement) has also occurred,
Corporation and Bank shall pay Executive an amount
equal to and not greater than 2.99 times the
Executive's Agreed Compensation as defined in
subsection (f) of this Section 3, which amount
shall be payable in thirty-six (36) equal monthly
installments and shall be subject to federal, state
and local tax withholdings. In addition, for a
period of three (3) years from the date of
termination of employment, or until Executive
secures substantially similar benefits through
other employment, whichever shall first occur,
Executive shall receive a continuation of all life,
disability, medical insurance and other normal
health and welfare benefits in effect with respect
to Executive during the two (2) years prior to his
termination of employment, or, if Corporation and
Bank cannot provide such benefits because Executive
is no longer an employee, a dollar amount equal to
the cost to Executive of obtaining such benefits
(or substantially similar benefits), but only to
the extent that such payment will not violate
Section 409A of the Code. If permitted under the
terms of the plan, Executive shall receive
additional retirement benefits to which he would
have been entitled had his employment continued
through the then remaining term of the Agreement.
In the event the payment described herein, when
added to all other amounts or benefits provided to
or on behalf of Executive in connection with
Executive's termination of employment, would result
in the imposition of an excise tax under Code
Section 4999, Executive shall receive an additional
payment such that the net amount retained by the
Executive, after application of such excise tax and
any federal, state and local income and payroll
taxes payable by Executive on such additional
payment, shall be equal to the amount Executive
would have received had the excise tax not been
imposed; provided, however, that no such additional
payment shall be made hereunder unless the amount
of "parachute payments" exceeds three times the
aggregate allocable "base amount" for such
parachute payments (as those terms are defined
under Code Section 280G) by more than fifty
thousand dollars ($50,000); and provided further,
that if the amount of parachute payments does not
exceed three times the aggregate allocable base
amount by more than fifty thousand dollars
($50,000), the amount payable to Executive
hereunder shall be reduced to the extent necessary,
but no more than is necessary, to avoid application
of any excise tax under Code Section 4999.
(b) Executive shall not be required to mitigate the
amount of any payment provided for in this Section
6 by seeking other employment or otherwise. Unless
otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section
6 shall not be reduced by any compensation earned
by Executive as the result of employment by another
employer or by reason of Executive's receipt of or
right to receive any retirement or other benefits
after the date of termination of employment or
otherwise.
7. Rights in Event of Termination of Employment Absent
Change in Control.
(a) In the event that Executive's employment is
involuntarily terminated by Corporation and/or Bank
without Cause and no Change in Control shall have
occurred at the date of such termination,
Corporation and Bank shall pay Executive an amount
equal to and no greater than 2.99 times the
Executive's Agreed Compensation as defined in
subsection (f) of Section 3, and shall be payable
in thirty-six (36) equal monthly installments and
shall be subject to federal, state and local tax
withholdings. In addition, for a period of three
(3) years from the date of termination of
employment, or until Executive secures
substantially similar benefits through other
employment, whichever shall first occur, Executive
shall receive a continuation of all life,
disability, medical insurance and other normal
health and welfare benefits in effect with respect
to Executive during the two (2) years prior to his
termination of employment, or, if Corporation and
Bank cannot provide such benefits because Executive
is no longer an employee, a dollar amount equal to
the cost to Executive of obtaining such benefits
(or substantially similar benefits), but only to
the extent that such payment will not violate
Section 409A of the Code. In addition, if
permitted pursuant to the terms of the plan,
Executive shall receive additional retirement
benefits to which he would have been entitled had
his employment continued through the then remaining
term of the Agreement. In the event the payment
described herein, when added to all other amounts
or benefits provided to or on behalf of Executive
in connection with Executive's termination of
employment, would result in the imposition of an
excise tax under Code Section 4999, the last
sentence of Section 6(a) hereof shall apply.
(b) Executive shall not be required to mitigate the
amount of any payment provided for in this Section
7 by seeking other employment or otherwise. Unless
otherwise agreed to in writing, the amount of
payment or the benefit provided for in this section
7 shall not be reduced by any compensation earned
by Executive as the result of employment by another
employer or by reason of Executive's receipt of
or right to receive any retirement or other
benefits after the date of termination of
employment or otherwise.
8. Covenant Not to Compete.
(a) Executive hereby acknowledges and recognizes the
highly competitive nature of the business of
Corporation and Bank and accordingly agrees that,
during and for the applicable period set forth in
Section 8(c) hereof, Executive shall not, except
as otherwise permitted in writing by the
Corporation and the Bank:
(i) be engaged, directly or indirectly, either for
his own account or as agent, consultant,
employee, partner, officer, director,
proprietor, investor (except as an investor
owning less than 5% of the stock of a publicly
owned company) or otherwise of any person,
firm, corporation or enterprise engaged in (1)
the banking (including bank holding company)
or financial services industry, or (2) any
other activity in which Corporation or Bank or
any of their subsidiaries are engaged during
the Employment Period, and remain so engaged
at the end of the Employment Period, in any
county and contiguous county in which, at the
date of termination of the Executive's
employment, a branch location, office, loan
production office, or trust or asset and
wealth management office of Corporation, Bank
or any of their subsidiaries is located,
whether inside or outside of the Commonwealth
of Pennsylvania, (the "Non-Competition Area");
or
(ii) provide financial or other assistance to any
person, firm, corporation, or enterprise
engaged in (1) the banking (including bank
holding company) or financial services
industry, or (2) any other activity in which
Corporation or Bank or any of their
subsidiaries are engaged during the Employment
Period, in the Non-Competition Area; or
(iii)directly or indirectly solicit persons or
entities who were customers or referral
sources of Corporation, Bank or their
subsidiaries within sixth (6) months of
Executive's termination of employment, to a
become customer or referral source of a person
or entity other than Corporation, Bank or
their subsidiaries;
(iv) directly or indirectly solicit employees of
Corporation, Bank or their subsidiaries who
were employed within one year of Executive's
termination of employment to work for anyone
other than Corporation, Bank or their
subsidiaries
(b) It is expressly understood and agreed that,
although Executive and Corporation and Bank
consider the restrictions contained in Section 8(a)
hereof reasonable for the purpose of preserving for
Corporation and Bank and their subsidiaries their
good will and other proprietary rights, if a final
judicial determination is made by a court having
jurisdiction that the time or territory or any
other restriction contained in Section 8(a) hereof
is an unreasonable or otherwise unenforceable
restriction against Executive, the provisions of
Section 8(a) hereof shall not be rendered void but
shall be deemed amended to apply as to such maximum
time and territory and to such other extent as such
court may judicially determine or indicate to be
reasonable.
(c) The provisions of this Section 8 shall be
applicable commencing on the date of this Agreement
and ending on one of the following dates, as
applicable:
(i) if Executive's employment terminates in
accordance with the non-renewal provisions of
Section 3, the effective date of termination
of employment; or
(ii) if Executive's employment terminates in
accordance with the provisions of Section 3(b)
of this Agreement (relating to termination for
Cause), or Section 3(c) of this Agreement
(relating to termination for Good Reason), the
second anniversary date of the effective date
of termination of employment; or
(iii)if the Executive voluntarily terminates his
employment, the second anniversary date of the
effective date of termination of employment;
or
(iv) if the Executive's employment is involuntarily
terminated in accordance with the provisions
of Section 7 hereof, the second anniversary
date of the effective date of termination of
employment; or
(v) if the Executive's employment is terminated
following a Change in Control in accordance
with the provisions of Section 5 hereof, the
third anniversary of the effective date of
termination of employment if the termination
occurs prior to December 31, 2010, or the
second anniversary if the termination occurs
after December 31, 2010.
9. Unauthorized Disclosure. During the term of his
employment hereunder, or at any later time, the
Executive shall not, without the written consent of the
Boards of Directors of Corporation and Bank or a person
authorized thereby, knowingly disclose to any person,
other than an employee of Corporation or Bank or a
person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the
Executive of his duties as an executive of Corporation
and Bank, any material confidential information obtained
by him while in the employ of Corporation and Bank with
respect to any of Corporation and Bank's services,
products, improvements, formulas, designs or styles,
processes, customers, methods of business or any
business practices the disclosure of which could be or
will be damaging to Corporation or Bank; provided,
however, that confidential information shall not include
any information known generally to the public (other
than as a result of unauthorized disclosure by the
Executive or any person with the assistance, consent or
direction of the Executive) or any information of a type
not otherwise considered confidential by persons engaged
in the same business of a business
similar to that conducted by Corporation and Bank or any
information that must be disclosed as required by law.
10. Work Made for Hire. Any work performed by the Executive
under this Agreement should be considered a "Work Made
for Hire" as the phrase is defined by the U.S. patent
laws and shall be owned by and for the express benefit
of Corporation, Bank and their subsidiaries and
affiliates. In the event it should be established that
such work does not qualify as a Work Made for Hire, the
Executive agrees to and does hereby assign to
Corporation, Bank, and their affiliates and
subsidiaries, all of his rights, title, and/or interest
in such work product, including, but not limited to, all
copyrights, patents, trademarks, and propriety rights.
11. Return of Company Property and Documents. The Executive
agrees that, at the time of termination of his
employment, regardless of the reason for termination, he
will deliver to Corporation, Bank and their subsidiaries
and affiliates, any and all company property, including,
but not limited to, keys, security codes or passes,
mobile telephones, records, data, notes, reports,
proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, software programs,
equipment, other documents or property, or reproductions
of any of the aforementioned items developed or obtained
by the Executive during the course of his employment.
12. Liability Insurance. Corporation and Bank shall use
their best efforts to obtain insurance coverage for the
Executive under an insurance policy covering officers
and directors of Corporation and Bank against lawsuits,
arbitrations or other legal or regulatory proceedings;
however, nothing herein shall be construed to require
Corporation and/or Bank to obtain such insurance, if the
Board of Directors of the Corporation and/or Bank
determine that such coverage cannot be obtained at a
reasonable price.
13. Notices. Except as otherwise provided in this Agreement,
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 Executive's
residence, in the case of notices to Executive, and to
the principal executive offices of Corporation and Bank,
in the case of notices to Corporation and Bank.
14. Waiver. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by
Executive and an executive officer specifically
designated by the Boards of Directors of Corporation and
Bank. No waiver by either 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.
15. Assignment. This Agreement shall not be assignable by
any party, except by Corporation and Bank to any
successor in interest to their respective businesses.
16. Entire Agreement. This Agreement supersedes any and all
agreements, either oral or in writing, between the
parties with respect to the employment of the Executive
by the Bank and/or Corporation and this Agreement
contains all the covenants and agreements between the
parties with respect to employment. This Agreement
specifically releases all parties of any rights and
obligations under the Executive Employment Agreement of
Xxxx X. Xxxxxx dated January 1, 1999, between Union
National Financial Corporation, Union National Community
Bank and Xxxx X. Xxxxxx and said agreement is hereafter
null and void.
17. Successors; Binding Agreement.
(a) Corporation and Bank will require any successor
(whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially
all of the businesses and/or assets of Corporation
and Bank to expressly assume and agree to perform
this Agreement in the same manner and to the same
extent that Corporation and Bank would be required
to perform it if no such succession had taken place.
Failure by Corporation and Bank to obtain such
assumption and agreement prior to the effectiveness
of any such succession shall constitute a breach of
this Agreement and the provisions of Section 3 of
this Agreement shall apply. As used in this
Agreement, "Corporation" and "Bank" shall mean
Corporation and Bank, as defined previously and any
successor to their respective businesses and/or
assets as aforesaid which assumes 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 Executive's personal or legal
representatives, executors, administrators, heirs,
distributees, devisees and legatees. If Executive
should die after a Notice of Termination is
delivered by Executive, or following termination of
Executive's employment without Cause, and any
amounts would be payable to Executive under this
Agreement if Executive had continued to live, all
such amounts shall be paid in accordance with the
terms of this Agreement to Executive's devisee,
legatee, or other designee, or, if there is no such
designee, to Executive's estate.
18. Arbitration. Corporation, Bank and 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 (except for any
enforcement sought with respect to Sections 8, 9, 10 or
11 which may be litigated in court, including an action
for injunction or other relief) are to be submitted for
resolution, in Philadelphia, Pennsylvania, to the
American Arbitration Association (the "Association") in
accordance with the Association's National Rules for the
Resolution of Employment Disputes or other applicable
rules then in effect ("Rules"). Corporation, Bank or
Executive may initiate an arbitration proceeding at any
time by giving notice to the other in accordance with
the Rules. Corporation and Bank and Executive may, as a
matter of right, mutually agree on the appointment of a
particular arbitrator from the Association's pool. 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, Corporation, Bank and 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 or any enforcement sought with
respect to Sections 8, 9, 10 or 11 of this Agreement,
including an action for injunction or other relief.
19. Validity. The invalidity or unenforceability of any
provision 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.
20. Applicable Law. This Agreement shall be governed by and
construed in accordance with the domestic, internal laws
of the Commonwealth of Pennsylvania, without regard to
its conflicts of laws principles. The provisions of this
Agreement shall be construed consistent with Section
409A of the Code, the applicable Treasury Regulations
and other official guidance promulgated thereunder so as
not to give rise to any violation of such section.
21. Headings. The section headings 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.
22. Delay in Payment. Notwithstanding anything in this
Agreement to the contrary, if any event giving rise to
an entitlement to payment hereunder is determined to be
a "separation from service" and the Executive is a
"specified employee" within the meaning of Section 409A
of the Code, no payment shall be made until one day
after six months from separation from service, at which
time such delayed payments shall be accumulated and paid
in one lump sum.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ATTEST: UNION NATIONAL FINANCIAL
CORPORATION
/s/ Xxxxx Xxxxxx By:/s/ Xxxxx X. Xxxxxxx
_________________________ ________________________
Xxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxxx,
Director and Chairman of
Compensation Committee
UNION NATIONAL COMMUNITY
/s/ Xxxxx Xxxxxx By:/s/ Xxxxx X. Xxxxxxx
_________________________ ________________________
Xxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxxx,
Director and Chairman of
Compensation Committee
WITNESS: EXECUTIVE
/s/ Xxxxx Xxxxxx /s/ Xxxx X. Xxxxxx
_________________________ _________________________
Xxxxx Xxxxxx Xxxx X. Xxxxxx
