Form of Moltzan Employment Agreement
Exhibit
10.4
Form
of Xxxxxxx Employment Agreement
THIS
EMPLOYMENT AGREEMENT (“Agreement”) made this day of , 200 , by and among
Community Banks, Inc., a Pennsylvania corporation (“CMTY”), CommunityBanks, a
Pennsylvania bank and trust company (“Community”; CMTY and Community are
collectively referred to from time to time herein as the “Company”), and Xxxxxxx
X. Xxxxxxx, an adult individual (hereinafter referred to as “Executive”).
BACKGROUND:
A. Pursuant
to an agreement between CMTY and BUCS Financial Corp (“BFC”) dated September __,
2006 (“Merger Agreement”), CMTY has acquired BFC through a merger in which CMTY
was the surviving corporation. Initially capitalized terms used but not defined
herein and that are also used in the Merger Agreement shall have the same
meanings as in the Merger Agreement.
B. The
Company believes that the future services of the Executive will be of great
value to the Company, and the Executive is willing to be employed by the Company
upon terms and conditions mutually satisfactory to the Executive and the
Company.
C. Executive
is party to (i) an employment agreement with BFC’s bank subsidiary dated March
__, 2006 (“BFC Employment Agreement” or “Original Agreement”) and (ii) an
Executive Supplemental Retirement Plan Agreement and related Endorsement Method
Split Dollar Plan Agreement with BFC’s bank subsidiary dated ________, 2003
(“SERP”).
D. The
Company and Executive wish to set forth the terms and conditions of (i)
Executive’s employment by Company and (ii) the termination of the BFC Employment
Agreement.
NOW,
THEREFORE, in consideration of the agreements hereinafter contained, and
intending to be legally bound hereby, the parties agree as follows:
1. Duties
as Executive.
Company
shall employ Executive and Executive shall serve Company as a Regional President
of Community or to such comparable executive position to which he may be
reasonably appointed by the Company’s CEO in light of his experience and
abilities. During his employment by the Company, Executive shall serve Company
under the direction of, and in a manner satisfactory to the CEO of the Company.
He shall perform his duties faithfully, diligently, and to the best of his
ability and shall devote his full time and best efforts to the affairs of the
Company.
2. Compensation
as Executive.
As
compensation for all services performed by Executive for Company while employed
thereby, Company shall:
a. As
of and
immediately prior to the Effective Date of the Merger, pay, or consent to BFC
or
BUCS paying, Executive the lump sum amount of $___________________;
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b. During
the term of this Agreement, pay Executive, in regular installments, an annual
salary of at least $150,000;
c. Pay
Executive bonuses as declared from time to time by the Company;
d. Enable
Executive to participate in the stock option and management incentive plans
of
the Company;
e. Continue
to maintain and perform the obligations of BFC’s bank subsidiary
under
the SERP
in accordance with the terms and conditions thereof, including an annual
contribution to the Pre-Retirement Benefit Account accrual under the Executive
Supplemental Retirement Plan Agreement of $50,000 plus applicable earnings
credited on the aggregate prior year accruals for each year during the term
of
this Agreement; and
f. Provide
Executive with such health, accident, disability, life insurance, retirement
benefits and such other benefits as are provided to similarly situated employees
of the Company.
3. Reimbursement
of Expenses.
Company
shall reimburse Executive within thirty (30) days from billing date for
necessary and properly documented travel and business expenses, not otherwise
reimbursed, incurred by Executive on behalf of Company.
4. Term
of Employment.
The
term of the Executive’s employment under this Agreement shall commence as of the
Effective Date of the Merger of CMTY and BFC and shall continue for a period
of
three (3) years. On each anniversary of the effective date of this Agreement
(“Anniversary”), the term of this Agreement and the period of the Executive’s
employment hereunder will be automatically extended for successive two-year
periods unless, no later than ninety (90) days prior to an Anniversary, either
the Company or the Executive gives written notification to the other of an
intention not to renew this Agreement. Notwithstanding the foregoing provisions,
upon the occurrence of a Change of Control (as hereinafter defined), the term
of
this Agreement shall automatically renew and be extended for two (2) years
from
the date thereof.
5. Termination
of Employment.
a. Disability.
If the
Executive becomes permanently disabled (as certified by a licensed physician
chosen by the Company and the Executive or in the event that the Company and
the
Executive cannot agree upon a physician, each shall designate a licensed
physician, and the licensed physicians so designated shall appoint a third
physician whose decision shall be binding upon the parties) because of sickness,
physical or mental disability, or any other reason, and is unable to perform
or
complete his duties under this Agreement for a period of ninety (90) consecutive
days (or time equal to the elimination period under any disability insurance
program provided by the Company to the Executive), the Company shall have the
option to terminate this Agreement by giving not less than 180 days’ written
notice of termination to the Executive. Such termination shall be without
prejudice to any right the Executive has under any disability insurance program
maintained by the Company.
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b. Cause.
The
Company may terminate this Agreement and the Executive’s employment hereunder
for Cause at any time. For the purposes of this Agreement, the Company shall
have “Cause” to terminate the Executive’s employment upon (1) the engaging by
the Executive in willful misconduct materially injurious to Community; (2)
gross
negligence or dishonesty of the Executive in the performance of his duties;
(3)
the commission by the Executive of an act constituting a felony or the
conviction of the Executive of a first degree misdemeanor based on dishonesty;
(4) the willful and material breach by the Executive of any of his other
obligations under this Agreement; (5) the refusal or failure of the Executive
to
carry out reasonable directives of the CEO (after the Company’s delivery of
written notice to the Executive of its intention to terminate the Executive
and
the Executive’s failure to cure or remedy such action or failure within 30 days
of such notice); (6) receipt of a final written directive or order of any
governmental body or entity having jurisdiction over the Company requiring
termination or removal of the Executive as an officer of the Company; (7)
repeated and consistent failure of the Executive to be present and work during
normal business hours unless the absence is due to disability described in
Section 6(a) below (after the Company’s delivery of written notice to the
Executive of its intention to terminate the Executive and the Executive’s
failure to cure or remedy such action or failure within 30 days of such notice);
or (8) insubordinate, gross incompetence or gross misconduct in the performance
of, or gross neglect of, the Executive’s duties hereunder.
c. Good
Reason.
The
Executive may terminate his employment hereunder for Good Reason, provided
that
such termination occurs within three months following the occurrence of the
Good
Reason. The term “Good Reason” shall mean (i) any assignment to the Executive,
without his consent, of any duties other than those contemplated by Section
1
hereof, or any reduction in the Executive’s duties or responsibilities for the
Company; (ii) any removal of the Executive from any of the positions indicated
in Section 1 hereof, except in connection with termination of the Executive’s
employment for Cause, a promotion of Executive to a higher position or an
assignment to Executive of a title and duties and responsibilities approximately
comparable to the those involved in the positions indicated in Section 1 above;
(iii) breach by the Company of its obligations under Section 2 hereof (after
the
Executive’s notice to the Company and the Company’s failure to cure such breach
within thirty (30) days of such notice); (iv) relocation of Executive’s
principal office to a location that is more than thirty (30) miles from Owings
Mills, Maryland; or (v) any other willful and material breach by the Company
of
this Agreement (after the Executive’s notice to the Company and the Company’s
failure to cure such breach within thirty (30) days of such
notice).
6. Payments
Upon Termination.
a. Death,
Disability or for Cause.
If the
Executive’s employment shall be terminated because of death, disability or for
Cause, the Company shall pay the Executive his full salary through the date
of
termination at the rate in effect at the time of termination, and other amounts
owing to the Executive at the date of termination, and the Company shall have
no
further obligations to the Executive under this Agreement.
b. Unilateral
and Good Reason Termination (Not Including Change of Control).
In the
event of a Unilateral Termination or if the Executive shall terminate his
employment for Good Reason (except for a termination by the Executive for Good
Reason following a Change of Control), then the Company shall pay the Executive
his full salary from the date of termination for the remaining term of this
Agreement. The Company shall not be required to maintain employee benefit plans
and programs to which the Executive was entitled prior to the date of
termination. “Unilateral Termination” means termination by the Company of the
Executive’s employment for any reason other than for Cause prior to the
expiration hereof but does not include termination as a result of disability
or
notice by the Company of its intention not to renew this Agreement.
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c. Termination
Following Change of Control.
If the
Executive terminates his employment for Good Reason following a Change of
Control or the Company, or any successor thereto, terminates Executive’s
employment following a Change of Control (both, a “Change of Control
Termination”), the Executive shall be entitled to compensation equal to two (2)
times the Executive’s gross salary and bonus compensation for the calendar year
preceding the date of such termination. The Executive shall receive the
compensation provided for in this Section 6(c) in twenty-four (24) equal monthly
installments payable beginning on the first day of the month succeeding the
month in which the Change of Control Termination shall occur, provided
that
the
obligation to pay the compensation provided for in this Section 6(c) shall
terminate immediately upon the Executive’s violation of the terms and conditions
of the non-disclosure and non-competition provisions set forth in paragraph
8 of
this Agreement.
7. Definition
of Change
of Control.
For
purposes of this Agreement, the term “Change of Control” shall
mean:
a. An
acquisition by any “person” or “group” (as those terms are defined or used in
Section 13(d) of the Exchange Act, as enacted and in force on the date hereof)
of “beneficial ownership” (within the meaning of 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. A
merger,
consolidation or other reorganization of the Company, except where the resulting
entity is controlled, directly or indirectly, by the Company;
c. A
merger,
consolidation or other reorganization of the Company, except where shareholders
of the Company immediately prior to consummation of any such transaction
continue to hold as least a majority of the voting power of the outstanding
voting securities of the legal entity resulting from or existing after any
transaction and a majority of the members of the Board of Directors of the
legal
entity resulting from or existing after a transaction are former members of
the
Company’s Board of Directors;
d. A
sale,
exchange, transfer or other disposition of substantially all of the assets
of
the Company to another entity, except to an entity controlled, directly or
indirectly, by the Company or a corporate division involving the
Company;
e. A
contested proxy solicitation of the Company’s shareholders that results in the
contesting party obtaining the ability to cast twenty-five percent (25%) or
more
of the votes entitled to be cast in an election of directors of the Company;
or
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f. During
any period of two (2) consecutive years during the term of this Agreement and
any renewal hereof, individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reason (other than for
health, disability or other medical incapacity or voluntary retirement) to
constitute at least a majority thereof.
8. Non-disclosure
and Non-competition.
The
Executive recognizes and acknowledges that during the course of his employment
with the Company and during the course of his future employment with the Company
he has acquired and/or may subsequently acquire privileged and confidential
information concerning the Company’s or its affiliates’ current and prospective
customers, their methods and ways of doing business, their plans and goals
for
future activities, and other confidential or proprietary information belonging
to the Company or its subsidiaries or relating to the Company’s or its
affiliates’ affairs (collectively referred to herein as the “Confidential
Information”). The Executive further acknowledges and agrees that the
Confidential Information is the property of the Company and that any
misappropriation or unauthorized use or disclosure of the Confidential
Information would constitute a breach of trust causing irreparable injury to
the
Company, and it is essential to the protection of the Company and its goodwill
and to the maintenance of the Company’s competitive position that the
Confidential Information be kept secret and not be disclosed to others or used
to the Executive’s own advantage or the advantage of others. Accordingly, the
Executive agrees that:
(a) Non-disclosure
of Confidential Information.
During
his employment and following the termination thereof, Executive shall hold
and
safeguard the Confidential Information in trust for Company, its successors
and
assigns, and shall not without the prior written consent of the Company
misappropriate or disclose or make available to anyone for use outside of the
Company at any time, either during his employment or subsequent to the
termination of his employment, any of the Confidential Information whether
or
not developed by the Executive; and
(b) Restrictions
on Competition.
Further, the Executive agrees that he shall not, either during his employment
with the Company or during the Restricted Period (as defined below) following
the termination of Executive’s employment for any reason (except for a
Unilateral Termination, in which case the noncompetition covenant contained
in
this Section 8(b) shall not apply), without first obtaining the written consent
of the CEO of the Company, directly or indirectly, as an officer, director,
employee, consultant, agent, partner, joint venturer, proprietary or otherwise,
engage in, become interested in, or assist any business which is in competition
with the Company or any of its affiliates or subsidiaries, in the areas of
commercial banking, mortgage banking, leasing, or the taking of deposits and
is
located or operating in any of the counties in which the Company or any of
its
present or future subsidiaries may now or at any time prior to the termination
of Executive’s employment have offices or any of the counties contiguous
thereto, other than as a shareholder holding not more than one (1%) percent
of
the outstanding shares of any class of securities registered under the
Securities Exchange Act of 1934. “Restricted Period” shall mean (i) in the event
of a Change of Control Termination, a period of two years following such
termination and (ii) in all other cases, the remainder of the term at the time
that the termination occurred.
9. Not
Salary.
Any
deferred compensation payable under this agreement shall not be deemed salary
or
other compensation to the Executive for the purpose of computing benefits to
which he may be entitled under any pension plan or other arrangement of the
Company for the benefit of its Executives.
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10. No
Assignment.
The
right of the Executive or any other person to the payment of deferred
compensation or other benefits under this agreement shall not be assigned,
transferred, pledged, or encumbered except by will or by the laws of the descent
and distribution.
11. Binding
Effect.
This
agreement shall be binding upon and inure to the benefit of the Company, its
successors and assigns and the Executive and his heirs, executors,
administrators, and legal representatives.
12. Governing
Law.
This
agreement shall be construed in accordance with and governed by the laws of
the
Commonwealth of Pennsylvania.
13. Severability.
If any
provision of this Agreement shall be found by any count of competent
jurisdiction to be unenforceable, the parties hereby waive such provision to
the
extent that it is found to be unenforceable. Such provision may be modified
by
such court so that it becomes enforceable, and, as modified, will be enforced
as
any other provision hereof, all other provisions continuing in full force and
effect.
14. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties and no prior
promises, agreements or warranties, verbal or written, shall be of any force
unless embodied herein. This Agreement is intended to supersede and replace
the
Original Agreement. No modification of this agreement shall be of any force
or
effect unless reduced to writing and signed by both parties.
IN
WITNESS WHEREOF, the Company has caused this agreement to be executed by its
duly authorized officers and the Executive has hereunto set his hand and seal
as
of the date first above written.
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Community
Banks, Inc.
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By
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Witness
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Xxxxx
X. Xxxxxxxxxxxx, President and CEO
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CommunityBanks
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By
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Witness
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Xxxxx
X. Xxxxxxxxxxxx, President and CEO
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Executive:
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Witness
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Xxxxxxx
X. Xxxxxxx
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