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EXHIBIT 10.7
AGREEMENT
This Agreement (the "Agreement") made the ________ day of
__________________, 1994, by and between USBANCORP, Inc. (the "Company"), a
Pennsylvania corporation, having its principal place of business at Main and
Xxxxxxxx Xxxxxxx, Xxxx Xxxxxx Xxx 000, Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000, and
XXXXX X. X'XXXX ("Executive").
WHEREAS, the Executive is the President and Chief Executive Officer of
Standard Mortgage Corporation of Georgia, a mortgage banking corporation
("Standard") indirectly owned by the Company.
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interest of the Company and its shareholders
to ensure that the Company and Standard will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
in Control (as defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened Change
in Control and to encourage the Executive's full attention and dedication to
Standard currently and in the event of any threatened or pending Change in
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change in Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
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1. Term. This Agreement shall be for a three (3) year period commencing
on the date first set forth above and shall be automatically renewed on the
first and on each subsequent annual anniversary of the above day and month
("Annual Renewal Date") for a period ending three (3) years from each Annual
Renewal Date unless either party shall give written notice of non-renewal at
least sixty (60) days prior to the Annual Renewal Date.
2. Change in Control. As used in this Agreement, Change in Control
shall mean the occurrence of any of the following:
(a) any "person" or "group" (as those terms are defined or
used in Section 13(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), as enacted and in force on the date hereof) is or
becomes the "beneficial owner" (as that term is defined in Rule 13d-3
under the Exchange Act, as enacted and in force on the date hereof) of
securities of the Company representing 24.99% or more of the combined
voting power of the Company's securities then outstanding;
(b) there occurs a merger, consolidation, share exchange,
division or other reorganization involving the Company and another
entity in which Company shareholders do not continue to hold a majority
of the capital stock of the resulting entity, or a sale, exchange,
transfer, or other
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disposition of substantially all of the assets of the Company to
another entity or other person; or
(c) there occurs a contested proxy solicitation or
solicitations of the Company's shareholders which results in the
contesting party or parties obtaining the ability to elect a majority
of the members of the Board of Directors standing for election at one
or more meetings of the Company's shareholders.
3. Triggering Events. If a Change in Control shall occur and if
thereafter, at any time during the term of this Agreement there shall be:
(a) any involuntary termination of the Executive by Standard,
other than for Cause as defined in Section 4 below;
(b) any reduction in the 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;
(c) the assignment to the Executive of duties inconsistent
with the Executive's office as such duties existed on the day
immediately prior to the date of a Change in Control;
(d) any reduction in the Executive's annual base salary in
effect on the day immediately prior to the date of a Change in Control;
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(e) any failure to continue the Executive's participation, on
substantially similar terms, in any incentive compensation or bonus
plans of Standard in which the Executive participated in immediately
prior to the Change in Control, or any change or amendment to any of
the substantive provisions of any of such plans which would materially
decrease the potential benefits to the Executive under any of such
plans;
(f) any failure to provide the Executive with benefits at
least as favorable as those enjoyed by the Executive under any pension,
life insurance, medical, health and accident, disability or other
employee plans of Standard in which the Executive participated in
immediately prior to 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, unless such reduction
relates to a reduction in benefits applicable to all employees
generally; or
(g) any breach of any provision of this Agreement by the
Company or Standard, which breach shall not have been cured by the
Company or Standard within thirty (30) days of the Company's receipt
from the Executive or his agent of written notice specifying in
reasonable detail the nature of the Company's or Standard's breach;
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then Executive, at his sole discretion, may upon no less than ninety (90) days
written notice to Company, resign from employment with Standard (or, if
involuntarily terminated, give notice of intention to collect benefits under
this Agreement) by delivering written notice to the Company at any time during
the term of this Agreement.
4. Termination of Executive for Cause. Upon or following a Change in
Control, the Company or Standard shall have the right at any time to terminate
the Executive's employment for Cause. In such event, the Company shall give
prompt notice to the Executive, specifying in reasonable detail the basis for
such termination. For purposes of this Agreement, "Cause" shall mean the
following conduct of the Executive:
(a) Material breach of any provision of this Agreement, which
breach Executive shall have failed to cure within thirty (30) days
after Employee's receipt of written notice from the Company specifying
the specific nature of the Executive's breach;
(b) Willful misconduct of Executive that is materially
inimical to the best interests, monetary or otherwise, of the Company
or Standard;
(c) Conviction of a felony or of any crime involving moral
turpitude, fraud or deceit;
(d) Adjudication as a bankrupt under the United States
Bankruptcy Code.
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5. Compensation and Benefits. Upon the occurrence of an event set forth
in Section 3 hereof and the delivery of a notice of termination to the Company
pursuant to Section 3 hereof, the Executive shall be absolutely entitled to
receive the compensation and benefits set forth below:
(a) the Executive shall select, in his absolute discretion,
and receive either (i) monthly installments equal to one thirty-sixth
(1/36) of an amount equal to 2.99 times the following: (x) During the
initial three-year term of this Agreement (the "Initial Term")
commencing on the date hereof, the highest combined base salary and
bonus paid or payable to the Executive in the then current year or in
any one of the last five fiscal years preceding the Executive's
delivery of a notice of termination; or (y) After the expiration of the
Initial Term, the quotient obtained by dividing the sum of the
Executive's combined salary and bonuses in the five years preceding the
Executive's delivery of a notice of termination by five, such monthly
installments shall be payable for a period of one year (the "Payment
Period") commencing on the first day of the first calendar month after
Executive's delivery of notice of termination, or (ii) a one time lump
sum payment equal to the non-discounted sum of the twelve (12) monthly
payments provided for in Section 5(a)(i) immediately above;
(b) from the date of the notice of termination through and
including the last day of the Payment Period, the
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Executive shall be entitled to continue to participate in the employee
retirement plan(s) of the Company and any supplemental executive
retirement plan(s) (including deferred profit sharing plan) or other
plan in effect during the term of this Agreement designed to supplement
payments made under such employee retirement plan, as the case may be,
as if the Executive's employment had not terminated;
(c) from the date of the notice of termination through and
including the last day of the Payment Period, the Executive shall be
provided with life, disability, and medical insurance benefits at
levels equivalent to the highest levels in effect for the Executive
during any one of the three (3) calendar years preceding the year in
which the notice of termination is delivered; and
(d) on the date of the notice of termination, all options held
by the Executive to acquire common stock of the Company, to the extent
not immediately exercisable by their terms, shall become immediately
exercisable, and such options shall be exercisable by the Executive at
any time prior to the earlier of the expiration date(s) of such stock
options or the date which is ninety (90) days after the Executive's
termination of employment with the Company.
In the event the Executive is ineligible to continue participation in
the employee retirement plan of Standard and/or any supplemental executive
retirement plan (including deferred profit sharing plan) or other plan in effect
during the
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term of this Agreement designed to supplement payments made under such employee
retirement plan or in any of Standard's life, disability or medical insurance
plans or programs, the Company shall, in lieu of such participation, pay the
Executive a dollar amount equal to the dollar amount of the benefit forfeited by
the Executive as a result of such ineligibility or a dollar amount equal to the
cost to the Executive to obtain such benefits in the case of any life,
disability or medical insurance plans or programs.
6. Beneficiary. Should the Executive die after entitlement but prior to
payment in full of amounts due pursuant to Section 5(a)(i) hereof, such monthly
payments shall continue (if such payment option was so elected by Executive) to
the Executive's designated beneficiary or his estate until such entitlement has
been paid in full.
7. Employment at Will. This Agreement contains the entire understanding
of the Company and the Executive with respect to the subject matter hereof and,
subject to the provisions of any other agreement between the Executive and the
Company, the Executive shall remain an employee at will and nothing herein shall
confer upon the Executive any right to continued employment and shall not affect
the right of Standard to terminate the Executive for any reason not prohibited
by law; provided, however, that any such removal shall be without prejudice to
any rights the Executive may have to compensation and benefits as provided for
in Section 5 hereof.
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8. Arbitration. Except as otherwise provided herein, in the event of
any controversy, dispute or claim arising out of, or relating to this Agreement,
or the breach thereof, the parties may seek recourse only for temporary or
preliminary injunctive relief to the courts having jurisdiction thereof. If any
relief other than injunctive relief is sought, the Company and the Executive
agree that such underlying controversy, dispute or claim shall be settled by
arbitration conducted in Pittsburgh, Pennsylvania in accordance with this
Section 8 and the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The matter shall be heard and decided, and awards rendered,
by a panel of three (3) arbitrators (the "Arbitration Panel"). The Company and
Executive shall each select one arbitrator from the AAA National Panel of
Commercial Arbitrators (the "Commercial Panel") and AAA shall select a third
arbitrator from the Commercial Panel. The award rendered by the Arbitration
Panel shall be final and binding as between the parties hereto and their heirs,
executors, administrators, successors and assigns, and judgment on the award may
be entered by any court having jurisdiction thereof. Each party shall pay their
professional fees, expenses and costs incurred in connection with the resolution
of any controversy, dispute or claim arising out of, or relating to this
Agreement.
9. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company, and the Company shall
require any successor to expressly
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acknowledge and assume its obligations hereunder. This Agreement shall be void
and no further force and effect upon the Company's sale of all the voting stock
or assets of Standard to an unrelated third party, except if it is reasonably
demonstrated such sale was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or such sale otherwise arose
in connection with or in anticipation of a Change in Control. This Agreement
shall inure to the extent provided hereunder to the benefit of and be
enforceable by the Executive or his/her legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. The
Executive may not delegate any of his/her duties, responsibilities, obligations
or positions hereunder to any person and any such purported delegation by
him/her shall be void and of no force and effect.
10. Prior Termination. Anything in this Agreement to the contrary
notwithstanding, if the Executive's employment with Standard is terminated prior
to the date on which a Change in Control occurs either (a) by the Company or
Standard other than for Cause or (b) by the Executive for any one of the reasons
set forth in Section 3 hereof, and it is reasonably demonstrated that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect the Change in Control or (ii) otherwise
arose in connection with or
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anticipation of the Change in Control, then for all purposes of this Agreement
the termination shall deemed to have occurred upon a Change in Control and the
Executive will be entitled to the compensation and benefits provided for in
Section 5 hereof.
11. Release. The Executive hereby acknowledges and agrees that prior to
the occurrence of the Executive's or his dependent's right to receive from the
Company or any of its representatives or agents any compensation or benefit to
be paid or provided to him or his dependents pursuant to Section 5 of this
Agreement, the Executive may be required by the Company, in its sole discretion,
to execute a release in a form reasonably acceptable to the Company, which
releases any and all claims the Executive has or may have against the Company or
its subsidiaries, agents, officers, directors, successors or assigns.
12. Compliance with Laws. The parties hereto acknowledge and agree that
this Agreement and each party's enforcement of their rights hereunder are
subject to the Comprehensive Thrift and Bank Fraud Prosecutions Act of 1990 (12
USC 1828) as enacted and in force on the date hereof.
13. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested -- in the case of the Executive, to his residence address as
set forth below, and in the case of the Company, to the address of its
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xxxxxxxxx xxxxx xx xxxxxxxx, xx care of the Board -- or to such other person or
at such other address with respect to each party as such party shall notify the
other in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Attest: USBANCORP, Inc.
__________________________________ By:____________________________
Secretary Xxxxxxx X. Xxxxxxxxx, Executive
Vice President
__________________________________(SEAL)
Xxxxx X. X'Xxxx
Address: 0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
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