TF FINANCIAL CORPORATION
CHANGE IN CONTROL SEVERANCE AGREEMENT
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THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into
this 25th day of April, 2001 ("Effective Date"), by and between TF Financial
Corporation (the "Company") and Xxxxxx X. Xxxxx (the "Executive").
WHEREAS, the Executive is experienced in all phases of the business of
the Company and serves the Company as its Chairman of the Board and a director,
WHEREAS, the Company wishes to ensure that the Executive continues to
perform his duties as Chairman of the Board in a manner that is in the best
interests of the Company and its stockholders, and the Board recognizes that if
the Company were to seek strategic partners to acquire the Company, the
participation and cooperation of the Chairman would be necessary to initiate
such a transaction, to negotiate the most favorable terms for such a transaction
and to close such acquisition,
WHEREAS, the Board recognizes that upon the acquisition of the Company,
the Chairman will likely be terminated as Chairman of the Board and as a
director even after serving the best interests of the Company and its
stockholders, and
WHEREAS, the Company wishes to ensure the continued contribution and
dedication of the Chairman to his duties and responsibilities as Chairman and as
a director;
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Company and Executive if the Executive's service as
Chairman of the Board is terminated following a Change in Control of the
Company.
NOW, THEREFORE, it is AGREED as follows:
1. Term of Agreement. This Agreement shall be in effect commencing on
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the Effective Date and ending on the day following the day in which the
Executive's term of office as the Chairman of the Board shall terminate as a
result of the expiration of such term of office, the Executive's voluntary
resignation from the office of Chairman of the Board or the voluntary
resignation as a director of the Company, the death or disability of the
Executive, the removal from office of the Executive as the Chairman or as a
director by the Board of Directors of the Company, or a determination by a
majority vote of the Board at a regular or special meeting of the Board to
terminate this Agreement, absent a Change in Control of the Company and the
written delivery of such termination action by the Board (collectively,
"Termination Event"). Notwithstanding the foregoing, this Agreement shall not be
deemed to be terminated as noted above in the event that there is a Change in
Control of the Company contemporaneous with or prior to such Termination Event.
2. Termination of Service in Connection with or Subsequent to a Change
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in Control.
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Notwithstanding any provision herein to the contrary, in the event of
the termination of the Executive's service as Chairman of the Board of the
Company's Board of Directors upon any Change in Control of the Company, or
within 18 months after such Change in Control, absent Just Cause for such
termination, Executive shall be paid a lump-sum payment of $250,000 within five
business days of such termination of the Executive's service. Notwithstanding
the forgoing, all sums payable hereunder shall be reduced in such manner and to
such extent so that no such payments made hereunder when aggregated with all
other payments, if any, to be made to the Executive by the Company and related
tax entities shall be deemed an "excess parachute payment" in accordance with
Section 280G of the Internal Revenue Code of 1986, as amended ("Code") and, if
paid, the Executive would be subject to the excise tax provided at Section
4999(a) of the Code. The term "Change in Control" shall refer to (i) the sale of
all, or a material portion, of the assets of the Company; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, as otherwise defined or determined by
the Office of Thrift Supervision or regulations promulgated by it; or (iv) the
acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder) of twenty-five
percent (25%) or more of the outstanding voting securities of the Company or the
Parent by any person, trust, entity or group. The term "person" means an
individual other than the Executive, or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein. The
provisions of this Section shall survive the termination of this Agreement
occurring after a Change in Control.
3. Other Changes in Employment Status.
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Except as provided for at Section 1, herein, the Board of Directors may
terminate the Executive's service as Chairman of the Board at any time with or
without Just Cause within its sole discretion. This Agreement shall not be
deemed to give the Executive any right to be retained in the employment or
service of the Company, to interfere with the right of the Company to terminate
the employment or service of the Executive at any time for any reason, or to
receive any compensation from the Company, except as detailed at Section 2,
herein. The Executive shall have no right to receive compensation or other
benefits under this Agreement if termination is for Just Cause. Termination for
"Just Cause" shall include, but is not limited to, termination because of the
Executive's personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order issued by a federal banking
regulatory having regulatory authority over the Company, or a material breach of
any provision of the Agreement.
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4. Duties of Executive.
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In consideration for the obligations of the Company due the Executive
as set forth at Section 2, herein, the Executive agrees that for a period of one
year from the date of termination of service as Chairman of the Board of the
Company following a Change in Control, as set forth at Section 2, herein, the
Executive shall not:
(i) without the express written consent of Company, directly or
indirectly communicate or divulge to, or use for his own benefit or for the
benefit of any other person, firm, association, or corporation, any of the trade
secrets, proprietary data or other confidential information communicated to or
otherwise learned or acquired by the Executive from the Company, or any
subsidiary of such entities, except that Executive may disclose such matters to
the extent that disclosure is required by a court or other governmental agency
of competent jurisdiction.
(ii) contact (with a view toward selling any product or service
competitive with any product or service sold or proposed to be sold by the
Company, or any subsidiary of such entities) any person, firm, association or
corporation (A) to which the Company, or any subsidiary of such entities sold
any product or service, (B) which Executive solicited, contacted or otherwise
dealt with on behalf of the Company, or any subsidiary of such entities, or (C)
which Executive was otherwise aware was a client of the Company, or any
subsidiary of such entities. Executive will not directly or indirectly make any
such contact, either for his own benefit or for the benefit of any other person,
firm, association, or corporation.
(iii) employ, solicit, or induce, or attempt to employ, solicit or
induce, any employee of the Company, or any subsidiary of such entities, for
employment with any financial services enterprise (including but not limited to
a savings and loan association, bank, credit union, or insurance company), nor
will the Executive directly or indirectly, on his behalf or for others, seek to
influence any employee of the Company, or any subsidiary of such entities to
leave the employ of the Company, or any subsidiary of such entities
(iv) make any public statements regarding the Company, or its
successors, or any subsidiary of such entities without the prior consent of the
Company, or its successors, and the Executive shall not make any statements that
disparage the Company, or any subsidiary of such entities or the business
practices of the Company, or any subsidiary of such entities.
(v) The provisions of this Section shall survive the expiration of this
Agreement.
4. Regulatory Exclusions. Notwithstanding anything herein to the
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contrary, any payments made to the Executive pursuant to the Agreement, or
otherwise, shall be subject to and conditioned upon compliance with 12
USCss.1828(k) and any regulations promulgated thereunder.
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5. Successors and Assigns.
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(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Company which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Company.
(b) The Executive shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of the
Company.
6. Amendments. No amendments or additions to this Agreement shall be
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binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
7. Applicable Law. This agreement shall be governed by all respects
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whether as to validity, construction, capacity, performance or otherwise, by the
laws of the Commonwealth of Pennsylvania, except to the extent that Federal law
shall be deemed to apply.
8. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
9. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or the breach thereof, shall be settled exclusively by
arbitration in accordance with the rules then in effect of the district office
of the American Arbitration Association ("AAA") nearest to the home office of
the Company, and judgment upon the award rendered may be entered in any court
having jurisdiction thereof, except to the extend that the parties may otherwise
reach a mutual settlement of such issue. The provisions of this Section shall
survive the expiration of this Agreement.
10. Non-Disclosure. Executive will not, during or after the term of
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this Agreement, directly or indirectly, disseminate or disclose to any person,
firm or entity, except to his or her legal advisor or financial advisor, the
terms of this Agreement without the written consent of the Company. The
provisions of this Section shall survive the expiration of this Agreement.
11. Entire Agreement. This Agreement together with any understanding or
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modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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