EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") made as of this 13th day of May
1999, by and between vBank a state-chartered savings bank organized under the
laws of Pennsylvania (the "Bank"); XXXXxxxXxxxxx.xxx, INC., a corporation
organized under the laws of the Commonwealth of Pennsylvania (the "Company");
and XXXXXXX X. XXXXXX ("Executive"). The Bank and the Company are referred to
collectively as the "Companies".
WITNESSETH:
WHEREAS, the Company is a registered bank holding company, and the Bank is a
wholly-owned subsidiary of the Company;
WHEREAS, each of the companies believes that it would benefit from Executive's
particular and unique skill, experience, and background, and wishes to employ
Executive as its President and Chief Executive Officer ("President and CEO");
and
WHEREAS, the parties desire by this Agreement to set forth the terms and
conditions of the employment relationship between the Company and Executive, and
between the Bank and Executive.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants in
this Agreement, the parties agree as follows:
1. Employment and Duties.
(a) The Company hereby employs Executive as the President and CEO of the Company
and the Bank hereby employs Executive as the President and CEO of the Bank, and
Executive agrees to accept such employment, subject to the terms and conditions
of this Agreement. Executive shall serve as a member of senior management and
perform the duties and responsibilities reasonably determined from time to time
by the respective Boards of Directors of the Companies (as to each of the
Companies, its "Board") consistent with the types of duties and responsibilities
typically performed by a person serving as President and CEO of businesses
similar to the Companies.
(b) Executive agrees to devote his best efforts and substantially all his time,
attention, energy, and skill to performing his duties hereunder. Provided that
such activities shall not violate any provision of law or regulation or any
provision of this Agreement or materially interfere with his performance of his
duties hereunder or, in the judgment of the Boards, present any material
conflict of interest with or compete with any of the current or anticipated
business activities of either of the Companies or any of their subsidiaries or
affiliates, nothing herein shall prohibit Executive from spending a reasonable
period of time (i) participating in any other business activities approved in
advance by the Boards in accordance with the terms and procedures in the Bylaws
of the Companies, (ii) engaging in charitable, civic, fraternal, or trade group
activities, or (iii) investing his assets in other entities or business
ventures. Executive shall be based at the offices of the Company in
Philadelphia, Pennsylvania or such other place in the Philadelphia metropolitan
area that shall constitute the Company's headquarters. Except for business
travel incident to his employment under this Agreement, Executive shall not be
required to relocate his principal workplace outside of the Philadelphia
metropolitan area.
2. Compensation. As compensation for performing the services required by this
Agreement for the Company (which shall include for this purpose the Bank as well
as the other subsidiaries and affiliates of the Company), and during the term of
this Agreement, Executive shall be compensated as follows:
(a) Base Compensation. The Company shall pay to Executive an annual gross salary
("Base Compensation") of Two Hundred Forty-Five Thousand Dollars ($245,000),
payable in equal installments pursuant to the Company's customary payroll
procedures in effect for its executive personnel at the time of payment, but in
no event less frequently than twice monthly, subject to withholding for
applicable federal, state, and local taxes. Executive shall be entitled to
increases in Base Compensation with respect to each fiscal year during the term
of this Agreement, if and in amounts to be determined by the Compensation
Committee of the Board of the Company in its discretion based on periodic
reviews of the performance of Executive and of the Companies for the preceding
fiscal year. Executive's Base Compensation shall not be reduced during the term
of this Agreement.
(b) Incentive Compensation. In addition to Base Compensation, Executive shall be
eligible to receive additional cash compensation ("Incentive Compensation") upon
the conclusion of each fiscal year.
(i) Executive will receive a cash bonus of $200,000 for every
$100,000,000 Increase in Market Capitalization of the Company.
"Increase in Market Capitalization" shall mean the increase in the
Average Closing Price of the Company Class A Common Stock from
December 31, 1998 through December 31, 1999. ("Average Closing Price"
means the average daily last sales price of the Company Class A Common
Stock as reported on the NASDAQ-National Xxxx System (as reported in
The Wall Street Journal) for twenty (20) consecutive trading days in
which such shares are traded on the NASDAQ-National Market System)(1).
(ii) Executive will receive $100,000 cash bonus upon the
opening of the 50,000th Deposit Account and an additional $100,000
cash bonus upon the opening of Deposit Accounts in increments of
50,000 thereafter. "Deposit Account" (excludes brokered accounts)
shall mean every such account opened, including but not limited to,
transaction accounts, savings accounts money market accounts and
certificates of deposit (or, time deposits).
(iii) Executive shall receive $100,000 cash bonus when the
total asset size of the bank reaches $500,000,000.
iv.) Executive will receive a cash bonus based upon the
Company's earnings per share per annum as follows:
a.) exceed $ .50 per share: $ 50,000
b.) exceed $ .75 per share: $ 75,000
c.) exceed $1.00 per share: $100,000
---------------------
(1) E.g., 12/31/98 - $9.00 closing price
18,000,000. market cap
Executive shall receive $200,000 when market cap reaches:
$118,000,000.
$218,000,000.
$318,000,000.
3. Employee Benefits. During the term of this Agreement,
Executive shall have the right to participate in all retirement plans (qualified
and non-qualified), pension, insurance, health, disability and other benefit
plans and programs that have been or hereafter are adopted by the Company or the
Bank (or in which either of them participates), according to the terms of such
plan or program, on terms no less favorable than the most favorable terms
granted to members of senior management of the Company. Nothing in this
Agreement shall preclude either of the Companies from modifying or terminating
benefit plans and programs in which Executive participates from time to time,
provided such changes are applicable to all members of senior management.
Executive shall receive a once annual net payment of $10,000 for life insurance
with beneficiaries to be established at Executive's discretion.
4. Vacation and Leaves of Absence. Executive shall be entitled
to the normal and customary amount of paid vacation which is consistent with
Company policy for its senior management, on dates to be mutually agreed upon by
the Company and Executive, and approval of the Company shall not be unreasonably
withheld. In addition, Executive may be granted leaves of absence with or
without pay, in accordance with applicable law, and in addition for such other
valid and legitimate reasons as the Board may determine in accordance with the
terms and procedures in the Bylaws of the Company. Executive will be entitled to
the same sick leave and holidays provided to other members of the Company's
senior management.
5. Expenses.
(a) Executive shall be promptly reimbursed against
presentation of vouchers or receipts for all reasonable and necessary expenses
incurred by Executive in connection with the performance of his duties under
this Agreement.
(b) The Companies shall reimburse Executive promptly upon
presentation of vouchers or receipts, all initiation fees and dues associated
with his membership in professional, social, civic and service clubs which
Executive joins or has joined and which membership, in whole or part, has been
or hereafter is approved by either of the Boards as furthering the interests of
or promoting the interest of the Companies or assisting Executive in business
relationships on behalf of the Companies.
(c) The Companies shall provide Executive with use of an
automobile and a gasoline allowance for use related to Company business.
6. Term. The term of Executive's employment under this Agreement
shall be for three (3) years (the "Term"), commencing on the date of this
Agreement (the "Effective Date") and expiring on the day preceding the third
anniversary of the Effective Date (the "Termination Date"), unless extended by
mutual agreement of the parties or earlier terminated in accordance with the
terms of this Agreement.
7. Termination and Termination Benefits.
(a) Event of Termination. Upon the occurrence of an Event of
Termination (as hereinafter defined) during the period of Executive's employment
under this Agreement, the provisions of this paragraph (a) shall apply. As used
in this Agreement, an "Event of Termination" shall mean the termination by the
Company of Executive's employment hereunder for any reason other than because
retirement. A termination for "cause" shall include termination because of the
Executive's personal
dishonesty, misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
In the event of termination for cause the Executive shall have no right to
receive further compensation, Salary, or Bonus of any kind, or other benefits
for any period after such termination.
(b) Event of Termination Without Cause. Upon the occurrence of
an Event of Termination other than for "Cause" as hereinabove defined, the
Company shall pay the Executive on a biweekly basis, while living, during the
lessor period of obtaining employment or the Employment Agreement, the
Executive's current salary, medical benefits and the use of a company
automobile. The Company shall also pay any earned bonuses, as well as any
expense reimbursements due to the Executive. Payments shall commence on the pay
cycle immediately following said occurrence, which said occurrence shall be
viewed as a determination by the Company not to extend the agreement beyond the
Term of Employment as set forth in section 6. Executive must be provided written
notice at least 60 days prior to termination as set forth herein.
(c) In the event of a Change in Control, as described in the
XXXXxxxXxxxxx.xxx Inc, Stock Option Plan, the Executive shall be entitled to his
current salary, medical benefits and the use of a company automobile for the
period of time equal to twenty-four (24) months, if he is not offered continued
employment with the same job title, responsibilities, locality and compensation,
noted herein.
(d) Event of Executive Terminating Employment. If the
Executive terminates employment or does not renew the Employment Agreement the
Executive is entitled to all earned compensation (salary and bonuses), and all
expense reimbursements due to the Executive through his last day of employment
with the Company.
(e) Suspension of Employment. If the Executive is suspended
and/or temporarily prohibited from participating in the conduct of the Company's
affairs by a notice served under applicable regulatory guidelines, the Company's
obligations under the Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, USA shall: (i) pay the Executive all of the compensation withheld
while its contract obligations were suspended; and (ii) reinstate its
obligations which were suspended.
8. Confidentiality
(a) During the term of his employment and at all times thereafter, Executive
shall not use for his personal benefit, or disclose, communicate or divulge to,
or use for the direct or indirect benefit of, any person, firm, association or
company other than the Companies, any confidential or proprietary information of
the Companies which Executive acquires in the course of his services hereunder
or acquired in the course of his service to either of the Companies or their
predecessors prior to the execution of this Agreement, which is not otherwise
lawfully known by and readily available to the general public. Executive will
hold such information in a fiduciary capacity for the sole and exclusive benefit
of the Bank. This information includes, but is not limited to: business,
development, marketing, legal, or accounting methods, policies, plans,
procedures, strategies or techniques; information regarding financial plans or
existing and potential banking transitions, sales, offerings, loans, investors
and investments; trade secrets (including without limitation "trade secrets", as
defined in O.C.G.A. 10-1-761(4),
coming within the scope of either of the Companies' business) or other knowledge
or processes of or developed by the Companies; names and addresses of employees,
suppliers, investors or customers; and any data on or relating to past, present
or prospective investors or customers, including investor and customer lists.
Executive confirms that such information is confidential and constitutes the
exclusive property of the Companies, and agrees that, immediately upon the
termination of his employment hereunder, whether by Executive or by the
Companies and whether during the term of this Agreement or subsequent to the
expiration of this Agreement, Executive shall deliver to the Companies all
correspondence, documents, books, records, lists and other writings and data
relating to the Companies' business, whether in documentary or computerized
form, and shall retain no copies, regardless of where or by whom the same were
kept or prepared.
(b) The provisions of subsection (a) shall survive the expiration of this
Agreement at the end of its term or at any time prior thereto.
(c) Executive acknowledges that the restrictions contained in this Section 8, in
view of the nature of the business in which the Companies are engaged and the
nature of the services Executive is expected to provide, are reasonable and
necessary to protect the legitimate interests of the Companies, and that any
violation of those restrictions would result in irreparable injury to the
Companies. Executive therefore agrees that, in the event of his violation of any
of those restrictions, the Companies shall be entitled to obtain from any court
of competent jurisdiction preliminary and permanent injunctive relief against
Executive, in addition to damages from Executive and an equitable accounting of
all commissions, earnings, profits and other benefits arising from such
violation, which rights shall be cumulative and in addition to any other rights
or remedies to which the Companies may be entitled.
(d) Executive agrees that if any or any portion of the foregoing covenant, or
the application thereof, is construed to be invalid or unenforceable, the
remainder of such covenant or the application thereof shall not be affected and
the remaining covenant will then be given full force and effect without regard
to the invalid or unenforceable portions.
9. Effective Date. This Agreement shall become effective on the date first
written.
10. Miscellaneous.
(a) Integration, Amendment. This Agreement constitutes the entire agreement
between the parties with respect to the matters set forth herein and supersedes
and renders of no force and effect all prior understandings and agreements
between the parties with respect to such matters. No amendments or additions to
this Agreement shall be binding unless in writing and signed by both parties.
(b) Assignment. Each of the Companies may assign this Agreement to its
respective corporate or other successor which acquires, directly or indirectly,
by merger, consolidation, purchase, or otherwise, all or substantially all of
its respective assets. Executive may not assign this Agreement or any right or
interest therein, whether by operation of law or otherwise, without the prior
written consent of the Companies.
(c) Severability. If any part of this Agreement is contrary to, prohibited by,
or deemed invalid under applicable law or regulations, such provision shall be
inapplicable and deemed omitted to the extent so
contrary, prohibited, or invalid, but the remainder of this Agreement shall not
be invalid and shall be given full force and effect so far as possible.
(d) Waivers. The failure or delay of any party at any time to require
performance by the other party of any provision of this Agreement, even if
known, shall not affect the right of such party to require performance of that
provision or to exercise any right, power, or remedy hereunder, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right, power, or remedy
under this Agreement. No notice to or demand on any party in any case shall, of
itself, entitle such party to the other or further notice or demand in similar
or other circumstances.
(e) Power and Authority.
(i) The Company and the Bank each represents and warrants to Executive that each
has the requisite power, to enter into this Agreement and perform the terms
hereof, and that the execution, delivery and performance of this Agreement by
each of them has been duly authorized by all appropriate action; and this
Agreement represents the valid and legally binding obligation of the Companies
and is enforceable against each of them in accordance with its terms.
(ii) Executive represents and warrants to the Companies that there are no
restrictions, agreements or understandings whatsoever to which Executive is a
party which would prevent or make unlawful his execution of this Agreement or
the performance of his services hereunder; his execution of this Agreement and
the performance of his services hereunder shall not constitute a breach of any
contract, agreement or understanding, oral or written, to which he is a party or
by which he is bound; and he is free and able to execute this Agreement and to
perform the services for the Companies which are contemplated herein.
(f) Burden and Benefit: Survival. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
personal and legal representatives, successors and, subject to Section 16,
assigns. In addition to, and not in limitation of anything contained in this
Agreement, it is expressly understood and agreed that the Company's obligation
to pay termination compensation set forth herein and the provisions of Section 9
shall survive any termination of this Agreement.
(g) Enforcement. In the event Executive prevails in an action to enforce this
Agreement or for a Company breach of this Agreement Executive shall be entitled
to recover all expenses incurred, including attorney fees, costs and expert
witness fees, in addition to any other remedy which he may have at law or in
equity in such actions.
(h) Governing Law: Headings. This Agreement and its construction, performance
and enforceability shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Pennsylvania. Headings and titles in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
(i) Notices. All notices called for under this Agreement shall be in writing and
shall be deemed given upon receipt if delivered personally or by facsimile
transmission and followed promptly by mail, or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice; provided that notices of a change of address shall be effective
only upon receipt thereof):
If to Executive:
Xx. Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
If to the Company or the Bank:
XXXXxxxXxxxxx.xxx, Inc.
One Lincoln Plaza
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Chairman of the Board
or to any other address or addressee as any party entitled to receive notice
under this Agreement shall designate, from time to time, to others in the manner
provided in this Section 11(i) for the service of Notices.
Any notice delivered to the party hereto to whom it is addressed shall be deemed
to have been given and received on the day it was received; provided, however,
that if such day is not a business day then the notice shall be deemed to have
been given and received on the business day next following such day. Any notice
sent by facsimile transmission shall be deemed to have been given and received
on the business day next following the day of transmission.
(j) Counterparts. This Agreement may be executed in one or more counterparts,
each of which counterparts shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement,
intending to be legally bound, as of the date first above written.
Attest: XXXXxxxXxxxxx.xxx, Inc.
By: /s/ Xxxxxxx Steady By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------- ------------------------------
Xxxxxxx Steady, Secretary Xxxxxx X. Xxxxxxxx, Chairman
EXECUTIVE:
Witness:
/s/ Xxxxxxx Steady /s/ Xxxxxxx X. Xxxxxx
-------------------------------- ------------------------------
Xxxxxxx X. Xxxxxx
