EXHIBIT 10.01
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made on the 1st day of July, 2001, between COMM
BANCORP, INC., a Pennsylvania business corporation ("Comm Bancorp"), COMMUNITY
BANK AND TRUST COMPANY, a Pennsylvania state-chartered banking institution (the
"Bank") and Xxxxx X. Xxxxxxx, an adult individual and resident of the
Commonwealth of Pennsylvania ("Executive").
WITNESSETH
WHEREAS, Comm Bancorp and the Bank each desire to employ the Executive
as it's Executive Vice President and Chief Financial Officer under the terms and
conditions set forth herein; and
WHEREAS, the Executive desires to serve Comm Bancorp and the Bank in an
executive capacity under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and intending to be legally bound hereby, the parties agree as
follows:
1. TERM OF EMPLOYMENT. Comm Bancorp and the Bank each employ the
Executive and the Executive accepts employment with them for an initial period
of two (2) years beginning on the 1st day of July 2001, and ending on the 30th
day of June, 2003 subject, however, to one-year automatic extensions at the end
of each one (1) year period so that this Agreement "evergreens" so as to have a
constant two (2) year term as of the end of each contract year unless either
Comm Bancorp, the Bank or Executive gives the other written notice at least six
(6) months prior to the expiration of the then current contract year of their
intention not to extend this Agreement (subject to Paragraph 10 hereof), and
also subject to prior termination of this Agreement as set forth below.
2. POSITION AND DUTIES. The Executive shall serve as the Executive Vice
President and Chief Financial Officer of Comm Bancorp and the Bank, reporting
only to the respective Boards of Directors and President and Chief Executive
Officer of Comm Bancorp and the Bank: shall have supervision and control over,
and responsibility for, the general financial management and operation and
general senior executive oversight of Comm Bancorp and the Bank; and shall have
such other powers and duties as may from time to time be prescribed by the
respective Boards of Directors and President and Chief Executive Officer of Comm
Bancorp and the Bank, provided that such duties are consistent with the
Executive's position as Executive Vice President and Chief Financial Officer in
charge of the general management of each.
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3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote
substantially all his available working time, ability and attention to the
business of Comm Bancorp and the Bank during the term of this agreement. Except
with the prior written approval of the Boards of Directors of each, the
Executive shall not engage in any other business or commercial activities,
duties or pursuits, during the term of this agreement. Under no circumstances
may the Executive engage in any business or commercial activities, duties or
pursuits which compete with the business or commercial activities or either Comm
Bancorp or the Bank nor may the Executive serve as a director or officer or in
any other capacity in a company or financial institution which competes with
either Comm Bancorp or the Bank. Passive investments and personal activities not
resulting in material compensation or a conflict of interest with either Comm
Bancorp or the Bank shall not be deemed a breach of the restrictions of this
paragraph. With the prior approval of the Board of Directors of Comm Bancorp,
which approval shall not be unreasonably withheld, the Executive may participate
in trade associations, charitable, civic or similar not-for-profit,
philanthropic or eleemosynary organizations, including services as an officer or
a director. Such participation shall not be deemed a breach of this Agreement,
but the total amount of time spent by the Executive in such activities during
normal working hours shall be periodically reviewed by the Board of Directors of
Comm Bancorp and the Bank.
4. COMPENSATION.
A. ANNUAL DIRECT SALARY:
1. ANNUAL SALARY: As compensation for services
rendered under this Agreement, the Executive shall be entitled to receive an
annual salary of $97,985.00 Dollars per year, payable in substantially equal
bi-monthly installments (or such other more frequent intervals as may be
determined by the Board of Directors as payroll policy for senior executive
officers) prorated for any partial employment period. The annual salary shall be
reviewed by the Board of Directors prior to each calendar year of this Agreement
beginning January 1, 2002 and shall be adjusted based on performance, but no
less than the latest annual North-Eastern Pennsylvania Domestic Consumer Price
Index percentage rate. The increase in annual salary shall be communicated to
the Executive on or before February 28th and shall be effective as of January 1
of each year. In no event shall the annual salary be decreased.
B. INCENTIVE COMPENSATION. The Executive shall participate in
the Executive Bonus Plan.
5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES. It is agreed
that nothing paid to the Executive under any of the below-described benefit
plans or arrangements shall be deemed to be in lieu of compensation otherwise
payable to the Executive hereunder and shall not be deemed to be a part of
Annual Direct Salary. The Executive shall be entitled to:
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A. EMPLOYMENT BENEFIT PLANS. The Executive shall be entitled
to participate in and to receive benefits under all employee benefit plans (e.g.
matching 401-K plan, salary continuation plan, supplemental retirement plan,
split-dollar life insurance plan) provided for other executive level employees
of either Comm Bancorp or the Bank, but it is not the parties intention to
create duplicate entitlements. The Executive may select which plan if more than
one plan is available.
B. VACATION AND HOLIDAYS. The Executive shall be entitled to
the number of paid vacation days in each calendar year determined by the Bank
from time to time for its senior executive officers, but no less than fifteen
(15) days in any calendar year (pro-rated in any calendar year during which the
Executive is employed hereunder for less than the entire such year in accordance
with the number of days in such calendar year during which he is so employed).
The Executive shall also be entitled to all paid holidays, personal days and
sick days given by the Bank to its senior executive officers. The parties agree
that no additional vacation or holidays shall be due to the Executive as a
result of his employment by Comm Bancorp.
C. BUSINESS EXPENSES. During the term of his employment
hereunder, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by him in performing services hereunder, upon
presentation of proper receipts or other documents in accordance with the then
current policy of the Bank.
D. BANKING INDUSTRY FUNCTIONS. The Executive may devote
reasonable time to attending conventions, seminars and meetings sponsored by the
Pennsylvania Banking Association, American Bankers Association and other banking
or educational organizations at the expense of the Bank or Comm Bancorp, as the
case may be. Such attendance at conventions will be approved by the Board of
Directors of the Bank.
E. CLUB MEMBERSHIP. The Bank shall provide Executive with
application fees, bond costs and annual dues in connection with his membership
in such private clubs, social, civic and community organizations that the Board
of Directors of the Bank may reasonably determine during the term of employment
hereunder.
F. AUTOMOBILE. The Executive shall be furnished a new
automobile, model to be set by the Board, every three years, with insurance,
maintenance, fuel and all fees and costs paid by the Bank.
G. OTHER PERQUISITES AND BENEFITS. The Executive shall be
entitled to receive such additional perquisites and fringe benefits as the
Boards of Directors of either Comm Bancorp or the Bank reasonably deem
appropriate in their sole discretion.
6. INDEMNIFICATION. Comm Bancorp and the Bank agree that their By-Laws
shall continue to provide for indemnification of their directors, officers,
employees and agents, to the fullest extent allowed under Pennsylvania law,
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including the Executive during the full term of this Agreement, and shall at all
times provide adequate insurance for such purposes.
7. UNAUTHORIZED DISCLOSURE. At no time during the period of his
employment hereunder and thereafter, shall the Executive, without the written
consent of the Boards of Directors of Comm Bancorp or the Bank or a person
authorized thereby, knowingly disclose to any person, other than an employee of
either Comm Bancorp or the Bank, as the case may be, 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, any material
confidential information obtained by him while in the employ of either Comm
Bancorp or the Bank with respect to any of their services, products,
improvements, formulas, designs or styles, processes, customers, methods of
distribution or any business practice the disclosure of which he knows will be
materially damaging to either Comm Bancorp or the 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 information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that conducted by Comm
Bancorp or the Bank.
8. RESTRICTIVE COVENANTS. The Executive covenants and agrees as
follows: the Executive shall not directly or indirectly, within the marketing
area of the Bank (defined as Lackawanna County, Susquehanna County, Xxxxx County
and Wyoming County, Pennsylvania), or any future market area of the Bank
(defined as an area within 20 miles of any branch office located outside of
those counties, and begun during the Executive's employment under the terms of
this Agreement), enter into or engage generally in competition with the Bank
either as sole proprietor or as partner or joint venturer, or as a director,
officer, shareholder (except as a shareholder of less than five (5.0%) percent
of the outstanding shares of a corporation if Executive is not an employee,
officer or Director of such corporation), employee or agent for any person,
during the term of this Agreement and for a period of six (6) months after the
date of termination of his employment hereunder if (i) the Executive's
employment is terminated for Cause by the Bank pursuant to paragraph 9 C of this
Agreement, or (ii) such termination is the result of the resignation by the
Executive for other than a "Good Reason" under paragraph 9 D of this Agreement.
The Executive agrees that any breach of the restriction set forth in this
paragraph shall result in irreparable injury to the Bank for which it shall not
have adequate remedy at law and the Bank shall be entitled to injunctive relief
in order to enforce the provisions hereof. In the event that this paragraph
shall be determined by any court of competent jurisdiction to be unenforceable
in part by reason of its being too great a period of time or covering too great
a geographical area, it shall be in full force and effect as to that period of
time or geographical area determined to be reasonable by the court.
9. TERMINATION.
A. DEATH. The Executive's employment hereunder by Comm Bancorp
or the Bank shall terminate upon his death.
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B. DISABILITY. The Executive's employment hereunder shall, at
Comm Bancorp's or the Bank's option, terminate if he becomes totally and
permanently disabled. The Executive shall be deemed totally or permanently
disabled if he becomes unable to perform a substantial portion of his duties
under this Agreement and a physician mutually selected by Bank and the Executive
determines such inability will continue for a period of one hundred eighty (180)
days or more and is likely to be permanent. The Executive shall be deemed
disabled if he receives total disability benefits under either Comm Bancorp's or
the Bank's disability insurance plan. Such termination shall be without
prejudice to any right Executive may have to receive benefits under any
disability insurance plan maintained by either Comm Bancorp or the Bank.
C. CAUSE. Either Comm Bancorp or the Bank may terminate the
Executive's employment hereunder for Cause. For the purposes of this Agreement,
either Comm Bancorp, or the Bank shall have "Cause" to terminate the Executive's
employment hereunder upon:
1. The willful failure by the Executive to substantially perform his
duties hereunder after Comm Bancorp or the bank has given the Executive written
notice of his failure to perform and the Executive does not cure such failure
within thirty (30) business days of the receipt of such notice, other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness; or
2. conviction of a felony; or
3. the willful violation by the Executive of the provisions of
Paragraphs 3, 7 or 8 of this Agreement; or
4. the willful violation of state or federal banking, securities, tax
or financial laws or financial regulations in the operation of Comm Bancorp or
the Bank.
The Executive will be notified in writing of the grounds for
termination.
Either Comm Bancorp or the Bank may terminate this Agreement without
notice upon receipt of a final, unappealable written directive or order of any
governmental body or entity having jurisdiction over Comm Bancorp or the Bank,
as the case may be, requiring termination, disciplinary action, a fine, or
removal of the Executive or Chief Executive Officer, President or Director of
Comm Bancorp or the Bank. Such termination shall be deemed to be termination for
cause.
Termination for cause by either Comm Bancorp or the Bank shall be
deemed also to be termination for cause by the other.
D. HEALTH AND GOOD REASON. The Executive may terminate his employment
hereunder (1) if his health should become impaired to an extent that it makes
continued performance of his duties hereunder hazardous to his physical or
mental health or (2) for Good Reason. The term "Good Reason"
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shall mean (i) any assignment to the Executive, without his consent, of any
duties other than those specifically contemplated by, Section 2 hereof, (ii) any
removal of the Executive from or any failure to re-elect the Executive to any of
the positions indicated in Section 2 hereof, except in connection with
termination of the Executive's employment for Cause, (iii) failure of either
Comm Bancorp or the Bank, as the case may be, to comply with Section 5 hereof,
(iv) any other material breach by either Comm Bancorp or the Bank of this
Agreement or (v) any Change in Control (as defined herein).
Should Executive terminate employment for reasons set forth in
Section 9D, notice thereof shall be given to Comm Bancorp or the Bank prior to
thereto and Comm Bancorp or the Bank shall have thirty (30) days to cure such
condition which precipitated Executive's desire to terminate. These reasons set
forth in said notice to Comm Bancorp or the Bank shall thereby be established
and fixed as "good reason" as the same is defined within this contract for any
future arbitration or court proceeding following termination.
10. PAYMENTS UPON TERMINATION/NON-EXTENSION.
A. DEATH, DISABILITY, OR FOR CAUSE. If the Executive's
employment shall be terminated because of death, disability or for Cause, Comm
Bancorp and the Bank shall pay the Executive his full Annual Direct Salary
through the date of termination at the rate in effect at the time of termination
and in the case of termination because of death or disability, any other amounts
owing to Executive at the time of termination (e.g. reimbursements and the value
of his accrued but unused fringe benefits) and death or disability payments
otherwise thereafter coming due pursuant to Paragraph 5A hereof and neither Comm
Bancorp nor the Bank shall have further obligations to the Executive under this
Agreement, except Executive shall receive all other vested employee benefits to
which Executive may be entitled when due and payable.
B. UNILATERAL AND GOOD REASON TERMINATION. If the Executive's
employment by either Comm Bancorp or the Bank is terminated (other than pursuant
to paragraphs 9A, 9B or 9C hereof or as a result of non-extension of this
Agreement), or if the Executive shall terminate his employment for Good Reason,
then Comm Bancorp and the Bank shall pay the Executive within thirty (30) days
of such termination date, the lump sum equivalent (without discounting for
present value) of his full Annual Direct Salary from the date of termination for
the remaining term of this Agreement. If termination is by reason of Change of
Control, either by the Executive under Paragraph 9D or by the controlling
interests resulting from the change of control, then the Bank and Comm Bancorp
shall pay to the Executive, the Executive's Annual Direct Salary for twenty-four
(24) months from the date of termination. In any such event, the Bank and Comm
Bancorp shall continue and pay for long-term disability and medical benefits
throughout such period of time that a payment is made under this sub-paragraph
10B. Executive shall receive all other vested employee benefits to which
Executive may be entitled when due and payable. All other employee fringe
benefits shall cease upon either such termination.
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C. NON-EXTENSION OF AGREEMENT. In the event the Executive
serves at least a full contract year of the initial term of this Agreement, and
Comm Bancorp and/or the Bank gives written notice that the contract will not be
renewed, the Executive shall be entitled at his sole option and discretion to
terminate his employment and shall thereupon receive a severance payment
equivalent to twenty-four (24) months of his then current Annual Direct Salary
plus such vested employee benefits to which Executive may be entitled when due
and payable, and neither Comm Bancorp nor the Bank shall have further
obligations to the Executive under this Agreement.
D. MAXIMUM SEVERANCE PAYMENT. Notwithstanding any provision or
clause above set forth to the contrary, Comm Bancorp and the Bank shall in no
case be liable to Executive for any amount in excess of twenty-four (24) months
of Executive's Annual Direct Salary plus such benefits as listed in Section 10B,
and the same shall represent the maximum severance payment or benefit to
Executive for termination under Paragraphs 10(B) and 10(C) above.
11. DEFINITION OF CHANGE OF CONTROL. A Change of Control shall be
deemed to have occurred when (a) substantially all of Comm Bancorp's or the
Bank's assets and/or operations are sold or otherwise disposed of; (b) any
person becomes the beneficial owner directly or indirectly, of securities of
Comm Bancorp or the Bank with a combined voting power in sufficient amount to
gain majority control of either Board of Directors; or (c) at any time during
any twenty-four (24) consecutive months (commencing on July 1, 2001) when a
majority of the members of either Comm Bancorp's and the Bank's Board of
Directors are individuals who were not members of the respective Board of
Directors at the beginning of such period, unless such changes result from death
or voluntary or historically-consistent retirement. For purposes of this
paragraph, "person and beneficial owner" shall have the meanings ascribed to
them pursuant to the Securities Exchange Act of 1934, as amended and the
regulations promulgated pursuant thereto. This Paragraph shall be liberally
construed in favor of the Executive.
12. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxx X. Xxxxxxx
0 Xxxxxxxxx Xxxx
Xxxxxx-Xxxxx, XX 00000
with a required copy to: Xxxxx X. Xxxxxx, Esquire
Koff, Wendolowski, Xxxxxxxx &
Xxxxxx, P.C.
00 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx-Xxxxx, XX 00000-0000
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If to Comm Bancorp: Comm Bancorp, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
If to Bank: Community Bank and Trust Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
with a required copy to: Xxxx X. Xxxxx, Esquire
Xxxx Xxxxx LLP
0 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Executive, Comm Bancorp and the Bank and their respective
heirs, personal representatives, successors and assigns.
14. ARBITRATION. In the event that any dispute should arise between the
parties regarding the meaning or effect of this Agreement, which dispute cannot
be resolved by the parties (except the question of Employee's disability which
is governed in Subparagraph 9B) the parties shall appoint a panel of three
persons as arbitrators who shall be present or former executives of financial
institutions located in the United States. The Executive shall appoint one such
arbitrator, Comm Bancorp shall appoint another, and the third shall be appointed
by the first two. Proceedings under this paragraph may be initiated by either
party informing the other in writing of the necessity for arbitration and the
subject matter of the arbitration. The parties shall select the first two
arbitrators within 45 days after such notice has been sent. The panel of two
arbitrators shall select the third arbitrator within 30 days after their
appointment from a list or lists of eligible persons submitted to them by the
parties. Proceedings under this paragraph shall be commenced and pursued as
expeditiously as possible and in accordance with the applicable rules of the
American Arbitration Association relating to executive employment agreements.
The parties shall compensate the arbitrator selected by him or it. All other
costs of the arbitration shall be borne equally. The enforceability of any award
and all other matters pertaining thereto shall be governed by the Uniform
Arbitration Act in force in Pennsylvania or any applicable succeeding
legislation. The arbitrators shall conduct their proceedings in Lackawanna
County, Pennsylvania.
15. VALIDITY. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties relating to the subject matter hereto and may not be waived,
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changed, modified, extended or discharged orally but only by agreement in
writing, consented to in a writing signed by the parties.
17. GOVERNING LAW. This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania and the United States of America.
18. RIGHTS AND REMEDIES; NO WAIVER. No course of action between Comm
Bancorp, the Bank and the Executive and no delay or omission of Comm Bancorp,
the Bank or the Executive to exercise any right or power given under this
Agreement shall; (A) impair the subsequent exercise of any right or power, or,
(B) be construed to be a waiver of any default or any acquiescence in or consent
to the curing of any default or of any other right or power that shall have
arisen. Every power and remedy granted by law and by this Agreement to any party
may be exercised as may be deemed expedient.
All such rights and powers shall be cumulative to the fullest extent permitted
by law.
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IN WITNESS WHEREOF, the parties have signed and sealed this Agreement
the day and the year first above written.
ATTEST: COMM BANCORP, INC.
---------------- By:/s/ Xxxxxxx X. Xxxxxx, Xx.
Title Chairman of the Board of Directors
ATTEST: COMM BANCORP, INC.
---------------- By:/s/ Xxxx X. Xxxxxx
Title Secretary of the Board of Directors
ATTEST: COMMUNITY BANK AND TRUST COMPANY
---------------- By:/s/ Xxxxxxx X. Xxxxxx, Xx.
Title Chairman of the Board of Directors
ATTEST: COMMUNITY BANK AND TRUST COMPANY
--------------- By:/s/ Xxxx X. Xxxxxx
Title Secretary of the Board of Directors
ATTEST: By:/s/ Xxxxx X. Xxxxxxx
---------------
Title
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