EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") made as of the _____ day of
September 1999, effective July 30, 1999, between MAIN STREET
BANCORP, INC., a Pennsylvania business corporation ("Main"), MAIN
STREET BANK, a Pennsylvania banking corporation (the "Bank"), and
XXXXXX X. XXXXXXX an individual (the "Executive").
WITNESSETH:
WHEREAS, Main, Berks County Bank ("BCB") and the
Executive entered into a Change in Control dated as of
May 1, 1998 (the "1998 Agreement");
WHEREAS, BCB, effective January 1, 1999, consolidated with
Heritage National Bank to form the Bank;
WHEREAS, Main, the Bank and the Executive desire to enter
into a new Agreement regarding, among other things, the
employment of the Executive by Main and the Bank and,
concurrently therewith, to terminate the 1998 Agreement, all as
hereinafter set forth;
WHEREAS, in consideration for Executive's execution of this
Agreement, and the termination of certain rights under the 1998
Agreement, Main has granted to Executive options pursuant to a
certain Stock Option Agreement dated July 30, 1999 ("the Stock
Options"); and
WHEREAS, the Executive acknowledges the value of the Stock
Options as adequate consideration for the rights Executive is
relinquishing under the 1998 Agreement, and certain contractual
protections Executive is granting to Main and Bank pursuant to
this Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Employment. Main and the Bank each hereby employ the
Executive, and the Executive hereby accepts employment with Main
and the Bank, on the terms and conditions set forth in this
Agreement.
2. Duties of Employee. The Executive will perform and
discharge well and faithfully such duties as an executive officer
of Main and the Bank as may be assigned to him from time to time
by the Board of Directors of Main or the Chairman of such Board.
The Executive will be employed as a Senior Vice President of Main
and the Bank, and will hold such other titles as may be given to
him from time to time by the Board of Directors of Main or the
Chairman of such Board. The Executive will devote his full time,
attention and energies to the business of Main and the Bank and
will not, during the Employment Period (as defined in Section 3),
be employed or involved in any other business activity, whether
or not such activity is pursued for gain, profit or other
pecuniary advantage; provided, however, that this section will
not be construed as preventing the Executive from (a) passively
investing his personal assets, (b) acting as a member of the
Board of Directors of Main, the Bank, or with pre-approval of the
Chairman of Main, any other corporation not in competition with
either, or as a member of the Board of Trustees of any other
organization, or (c) being involved in any community, civic or
similar activity.
3. Term of Employment. The Executive's employment under
this Agreement will be for a period (the "Employment Period")
commencing upon the date of this Agreement and ending at the end
of the term of this Agreement pursuant to Section 19, unless the
Executive's employment is sooner terminated in accordance with
Section 5 or one of the following provisions:
(a) Termination for Cause. The Executive's employment
under this Agreement may be terminated at any time during the
Employment Period for "Cause" (as herein defined), by action of
the Board of Directors of Main or the Chairman of such Board,
upon giving notice of such termination to the Executive at least
15 days prior to the date upon which such termination is to take
effect. As used in this Agreement, "Cause" means any of the
following events:
(i) the Executive is convicted of or enters a
plea of guilty or nolo contendere to a felony, a crime of
falsehood, or a crime involving fraud or moral turpitude, or the
actual incarceration of the Executive for a period of 45
consecutive days;
(ii) the Executive willfully and repeatedly fails
to follow the lawful instructions of the Board of Directors of
Main after the Executive's receipt of written notice of such
instructions, other than a failure resulting from the Executive's
incapacity because of physical or mental illness;
(iii) a government regulatory agency recommends
or orders in writing that the Bank terminate the employment of
the Executive with the Bank or relieve him of his duties as such
relate to the Bank; or
(iv) the Executive violates the covenant not to
compete contained in Section 8 or the confidentiality provisions
of Section 9.
Notwithstanding the foregoing, the recommendation or order of a
government regulatory agency referred to in Section 3(a) (iii)
will not constitute "Cause" giving Main the right to terminate
this Agreement as it relates to Main unless;
(i) such recommendation or order results from an
assessment against the Executive of a final unappealable civil
monetary penalty ("tier 3") under Section 8 (i) (2) (C) of the
Federal Deposit Insurance Act;
(ii) such penalty is based on a knowing or
reckless (A) violation of law or regulation, (B) unsafe or
unsound practice, or (C) breach of fiduciary duty;
(iii) in the case of each of (A), (B) and (C)
above, is either intentionally concealed by the Executive from
the Board (and is not actually known by the Board), or committed
by the Executive after repeated warnings by the Board or the
governmental regulatory agency; and
(iv) in the case of each of (A), (B) and (C)
above, results in a substantial loss to Bank.
In addition, the Executive's employment under this Agreement will
not be deemed to have been terminated for "Cause" under
Sections 3(a)(i) or (ii) if such termination took place solely as
a result of:
(i) questionable judgment on the part of the
Executive;
(ii) any act or omission believed by the
Executive, in good faith, to have been in, or not opposed to, the
best interests of Main or of the Bank; or
(iii) any act or omission in respect of which a
determination could properly be made that the Executive met the
applicable standard of conduct prescribed for indemnification or
reimbursement or payment of expenses under the Articles of
Incorporation or By-laws of Main or the Bank or the directors'
and officers' liability insurance of Main or the Bank, in each
case as in effect at the time of such act or omission.
If the Executive's employment is terminated under the provisions
of this subsection, then all rights of the Executive under
Section 4 will cease as of the effective date of such
termination.
(b) Termination Without Cause. The Executive's
employment under this Agreement may be terminated at any time
during the Employment Period without "Cause" (as defined in
Section 3(a)), by action of the Board of Directors of Main or the
Chairman of such Board, upon giving notice of such termination to
the Executive at least 30 days prior to the date upon which such
termination is to take effect. If the Executive's employment is
terminated under the provisions of this subsection, then the
Executive will be entitled to receive the compensation set forth
in Section 6.
(c) Voluntary Termination, Retirement or Death. If
the Executive voluntarily terminates employment without Good
Reason (as defined in Section 5), retires or dies, the
Executive's employment under this Agreement will be deemed
terminated as of the date of the Executive's voluntary
termination, retirement or death, and all rights of the Executive
under Section 4 will cease as of the date of such termination and
any benefits payable to the Executive will be determined in
accordance with the pension, welfare, fringe benefit, expense
reimbursement, salary deferral and insurance programs of Main and
of the Bank then in effect.
(d) Disability. If the Executive is incapacitated by
accident, sickness, or otherwise so as to render the Executive
mentally or physically incapable of performing the essential
duties required of the Executive under Section 2, notwithstanding
reasonable accommodation, for a continuous period of six months,
then, upon the expiration of such period or at any time
thereafter, by action of the Board of Directors of Main or the
Chairman of such Board, the Executive's employment under this
Agreement may be terminated immediately upon giving the Executive
notice to that effect. If the Executive's employment is
terminated under the provisions of this subsection 3(d), then all
rights of the Executive under Section 4 will cease as of the last
business day of the week in which such termination occurs, and
the Executive will thereafter be entitled to the benefits to
which he is entitled under any disability plan of Main or the
Bank in which he is then a participant (including the minimum
benefit described in Section 4 (d) (iv)).
4. Employment Period Compensation and Related Matters.
(a) Salary. For services performed by the Executive
under this Agreement, Main and the Bank will pay the Executive a
salary, in the aggregate, during the Employment Period, at the
annualized rate of $90,000, payable at the same times as salaries
are payable to other executive employees of Main or of the Bank.
Main and/or the Bank may, from time to time, increase (but not
decrease) the Executive's salary, and any and all such increases
will be deemed to constitute amendments to this subsection to
reflect the increased amounts, effective as of the dates
established for such increases by the Board of Directors of Main
or of the Bank in the resolutions authorizing such increases.
(b) Bonus. For services performed by the Executive
under this Agreement, Main will pay the Executive a bonus,
annually during the Employment Period, in such amounts (if any)
and at such times as is provided in such incentive plan for
senior officers as may be approved by the Board of Directors of
Main and in effect from time to time. In addition, Main may,
from time to time, pay such other bonus or bonuses to the
Executive as Main, in its sole discretion, deems appropriate.
The payment of any such bonuses will not reduce or otherwise
affect any other obligation of Main and/or the Bank to the
Executive provided for in this Agreement.
(c) Pension and Welfare Benefits. Main will provide
the Executive, during the Employment Period, with pension and
welfare benefits (within the meaning of Section 3 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) in
the aggregate not less favorable than those received by other
employees of Main.
(d) Fringe Benefits.
(i) In General. Except as otherwise provided in
this subsection, Main will provide the Executive, during the
Employment Period, with such fringe benefits as may be provided
generally from time to time for its senior officers.
(ii) Vacation. The Executive will be entitled to
not less than four weeks of vacation per calendar year, plus one
additional day for each five years of service with Main and any
predecessor of Main. The right to carry over unused vacation
days will be subject to the executive personnel policies of Main
from time to time in effect.
(iii) Stock Options. The Executive will be
entitled to such stock option grants as may be granted from time
to time by the Board of Directors of Main and/or the Compensation
Committee of such Board and as are consistent with the
Executive's responsibilities and performance.
(e) Expense Reimbursement. The Executive will be
entitled to reimbursement of all expenses incurred by him in the
discharge of his duties hereunder, or otherwise in furtherance of
the business of Main and the Bank, provided he renders an
accounting of such expenses in such manner as may be required
from time to time for employees generally.
(f) Salary Deferral. The Executive may request that
the payment of any portion of his base salary and/or bonus for
any calendar year be deferred. Such request must be made in
writing to Main and the Bank before the beginning of such
calendar year and must include the period of deferral requested
by the Executive (the "Deferral Period"). If the Board of
Directors of Main and of the Bank approve such request, the
Executive will be entitled to receive, at the end of the Deferral
Period, the deferred portion of his base salary and/or bonus plus
interest at a compounded rate of 6% per annum. Any salary and/or
bonus which is deferred as described herein will be credited to
an account on the books of Main and of the Bank established in
the name of the Executive. However, this account will not be
funded, and neither Main nor the Bank will be deemed to be a
trustee for the Executive with respect to any deferred amount.
The liabilities of Main and the Bank to the Executive hereunder
are those of a debtor pursuant to such contractual obligations as
are created by this Agreement. No liabilities of Main and the
Bank which arise under this subsection will be deemed to be
secured by any pledge or other encumbrance on any property of
Main or of the Bank. Main and the Bank will not be required to
segregate any funds representing such deferred amounts, and
nothing herein will be construed as providing for such
segregation.
5. Resignation of the Executive for Good Reason.
(a) Events Giving Right to Terminate for Good Reason.
The Executive may resign for Good Reason (as herein defined) at
any time during the Employment Period, as hereinafter set forth.
As used in this Agreement, the term "Good Reason" means any of
the following:
(i) any reduction in title from Senior Vice
President;
(ii) any reassignment of the Executive to a
principal office which is more than 50 miles from 000 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx;
(iii) any removal of the Executive from office
except for any termination of the Executive's employment under
the provisions of Section 3 (a) or (d);
(iv) any reduction in the Executive's annual base
salary as in effect on the date hereof or as the same may be
increased from time to time;
(v) Any failure by Main and/or the Bank to
provide the Executive with benefits at least as favorable as
those enjoyed by the Executive under any of the pension or
welfare plans (as such terms are defined in ERISA Section 3) of
Main in which the Executive is participating on the date of this
Agreement, or the taking of any action that would materially
reduce any of such benefits, unless the change is part of a
change applicable in each case to employees generally; or
(vi) any material breach of this Agreement by
Main or the Bank, coupled with the failure to cure the same
within 30 days after receipt of a written notice of such breach
from the Executive.
(b) Notice of Termination. At the option of the
Executive, exercisable by the Executive within 90 days after the
occurrence of the event constituting Good Reason, the Executive
may resign from employment under this Agreement by a notice in
writing (the "Notice of Termination") delivered to Main and the
Bank and the provisions of Section 6 will thereupon apply.
(c) Special Right of Termination. Notwithstanding
anything herein to the contrary, but subject to the provisions of
Section 3(a), within the one-year following the occurrence of a
Change in Control (as defined below), the Executive may terminate
his employment for any or no reason by delivering a written
notice, similar to a Notice of Termination, to Main; and such
termination will be deemed for all purposes to constitute a
resignation for Good Reason. In such event, he will be entitled
to the payments and benefits described in Section 6.
(d) Change in Control Defined. For purposes of this
Agreement, the term "Change in Control" means any of the
following:
(i) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities and Exchange Act of
1934 (the "Exchange Act")), other than Main, a subsidiary of
Main, an employee benefit plan of Main or a subsidiary of Main
(including a related trust), becomes the beneficial owner (as
determined pursuant to Rule 13d-3 under the Exchange Act),
directly or indirectly of securities of Main representing more
than 20% of the combined voting power of Main's then outstanding
securities;
(ii) the occurrence of, or execution of an
agreement providing for, a sale of all or substantially all of
the assets of Main or the Bank to an entity which is not a direct
or indirect subsidiary of Main;
(iii) the occurrence of, or execution of an
agreement providing for, a reorganization, merger, consolidation
or similar transaction involving Main, unless (A) the
shareholders of Main immediately prior to the consummation of any
such transaction will initially own securities representing a
majority of the voting power of the surviving or resulting
corporation, and (B) the directors of Main immediately prior to
the consummation of such transaction will initially represent a
majority of the directors of the surviving or resulting
corporation; or
(iv) any other event which is at any time
irrevocably designated as a "Change in Control" for purposes of
this Agreement by resolution adopted by a majority of the
directors of Main.
6. Rights in Event of Certain Termination of
Employment. In the event that the Executive resigns from
employment for Good Reason, by delivery of a Notice of
Termination or other permitted notice to Main and the Bank, or
the Executive's employment is terminated by Main without Cause,
Executive will be entitled to receive the amounts and benefits
set forth in this section.
(a) Basic Payments (prior to the occurrence of a
Change in Control). In the event of a termination pursuant to
Section 3(b) prior to the occurrence of a Change in Control, or a
termination pursuant to Section 5(a), the Executive will be paid
an amount equal to the highest annualized salary paid to him
during the year of termination or the immediately preceding two
calendar years. Such amount will be paid to the Executive in 12
equal monthly installments (without interest), beginning 30 days
following the date of termination of employment.
(b) Basic Payments (following the occurrence of a
Change in Control). In the event of a termination pursuant to
Section 3(b) at the time of or following the occurrence of a
Change in Control, or a termination pursuant to Section 5(c), the
Executive will be paid an amount equal to two times the sum of
(i) the highest annualized base salary paid to him during the
year of termination or the immediately preceding two calendar
years, and (ii) the highest bonus paid to him with respect to one
of the three calendar years immediately preceding the year of
termination. The Executive will, within 30 days after his
termination of employment, be paid a lump sum equal to the
present value of the amounts otherwise payable under this
subsection. For purposes of the preceding sentence, present
value will be determined by using the short-term applicable
federal rate under Section 1274 of the Internal Revenue Code of
1986, as amended (the "Code"), in effect on the date of
termination of employment. For purposes of this subsection, to
the extent necessary, base salary and bonuses with any
predecessor of Main or an affiliate thereof shall be taken into
account.
(c) Supplemental Payment in Lieu of Certain Benefits.
In the event of a termination pursuant to Section 3(b) at the
time of or following the occurrence of a Change in Control or a
termination pursuant to Section 5(c), in lieu of continued
pension, welfare and other benefits, a lump sum cash payment of
$22,000 will be paid to the Executive within 30 days following
the date of termination of employment.
(d) Excise Tax Matters in General. In the event that
the amounts and benefits payable under this section, when added
to other amounts and benefits which may become payable to the
Executive by Main and/or the Bank, are such that he becomes
subject to the excise tax provisions of Code Section 4999, Main
and/or the Bank will pay him such additional amount or amounts as
will result in his retention (after the payment of all federal,
state and local excise, employment, and income taxes on such
payments and the value of such benefits) of a net amount equal to
the net amount he would have retained had the initially
calculated payments and benefits been subject only to income and
employment taxation. For purposes of the preceding sentence, the
Executive will be deemed to be subject to the highest marginal
federal, state and local tax rates. All calculations required to
be made under this subsection will be made by Main's independent
certified public accountants, subject to the right of Executive's
representative to review the same. All such amounts required to
be paid will be paid at the time any withholding may be required
under applicable law, and any additional amounts to which the
Executive may be entitled will be paid or reimbursed no later
than 15 days following confirmation of such amount by Main's
accountants. In the event any amounts paid hereunder are
subsequently determined to be in error because estimates were
required or otherwise, the parties agree to reimburse each other
to correct such error, as appropriate, and to pay interest
thereon at the applicable federal rate (as determined under Code
Section 1274A for the period of time such erroneous amount
remained outstanding and unreimbursed). The parties recognize
that the actual implementation of the provisions of this
subsection are complex and agree to deal with each other in good
faith to resolve any questions or disagreements arising
hereunder.
(e) Limited Restriction on Payments and Benefits to
Avoid Excise Tax. Notwithstanding the provision of
Subsection (c), if (i) it is determined that the payments to be
provided to the Executive hereunder would subject him to the
excise tax provisions of Code Section 4999, but (ii) a 5%
reduction in the present value (as determined pursuant to the
provisions of Code Section 280G) of such payments would result in
no such excise tax being owed, then such payments will be reduced
or eliminated by the smallest amount necessary to avoid the
imposition of such excise tax. The Executive will be entitled,
within a reasonable period of time, to specify which payments
will be reduced or eliminated.
7. Expiration of Agreement. In the event this
Agreement expires by its terms in accordance with the provisions
of Section 19 (a) and the Executive's employment thereafter
voluntarily or involuntarily terminates prior to the attainment
of age 65 and other than for Cause, Main will pay or cause to be
paid to him, in one lump sum within 30 days following
termination, an amount equal to one times the sum of the amounts
described in Section 6 (a).
8. Covenant Not to Compete.
(a) The Executive hereby acknowledges and recognizes
the highly competitive nature of the business of Main and of the
Bank and accordingly agrees that, during and for the applicable
period set forth in Subsection (c), the Executive will not:
(i) be engaged, directly or indirectly, either
for his own account or as agent, consultant, employee, partner,
officer, director, proprietor, investor (except as an investor
owning less than 5% of the stock of a publicly owned company) or
otherwise of, any person, firm, corporation, or enterprise
engaged, in (A) the banking, or financial services industry, or
(B) any other activity in which Main or any of its subsidiaries
is engaged during the Employment Period, in either case (A) or
(B) in any county in which, at any time during the Employment
Period or at the date of termination of the Executive's
employment, a branch, office or other facility of Main or any of
its subsidiaries is located, or in any county contiguous to such
a county, including contiguous counties located outside of the
Commonwealth of Pennsylvania (the "Non-Competition Area"); and
(ii) provide financial or other assistance to any
person, firm, corporation, or enterprise engaged in (A) the
banking or financial services industry, or (B) any other activity
in which Main or any of its subsidiaries is engaged during the
Employment Period, in the Non-Competition Area.
(b) It is expressly understood and agreed that,
although the Executive, Main and the Bank consider the
restrictions contained in Subsection (a) reasonable for the
purpose of preserving for Main and its subsidiaries their
goodwill and other proprietary rights, if a final judicial
determination is made by a court having jurisdiction that the
time or territory or any other restriction contained in
Subsection (a) is an unreasonable or otherwise unenforceable
restriction against the Executive, the provisions of Subsection
(a) will not be rendered void but will be deemed amended to apply
as to such maximum time and territory and to such other extent as
such court may judicially determine or indicate to be reasonable.
(c) The provisions of this section will be applicable
commencing on the date of this Agreement and ending as follows:
(i) at the termination of the payments and
benefits provided under Section 6; provided, however, that this
clause will not apply in the event Executive's termination of
employment occurs following a Change in Control;
(ii) one year following the termination of
Executive's employment, in the case of a voluntary termination
without Good Reason; or
(iii) in all other cases, the date of Executive's
termination of employment.
9. Confidentiality.
(a) As used in this section, the term "Confidential
Information" means any and all information regarding the
organization, business or finances of Main or any of its
subsidiaries and affiliates, including, but not limited to, any
and all business plans and strategies, financial information,
proposals, reports, marketing plans and information, cost
information, customer information, claims history and experience
data, sales volume and other sales statistics, personnel data,
pricing information, concepts and ideas, information respecting
existing and proposed investments and acquisitions, and
information regarding customers and suppliers, but the term
"Confidential Information" will not include information created
by the Executive or which prior to the Executive's receipt
thereof (i) was generally publicly available, or (ii) was in the
Executive's possession free of any restrictions on it use or
disclosure and from a source other than Main or any of its
subsidiaries or affiliates.
(b) The Executive acknowledges and agrees that his
employment by Main and the Bank will afford him an opportunity to
acquire Confidential Information and that the misappropriation or
disclosure of any Confidential Information would cause
irreparable harm to Main and its subsidiaries and affiliates.
(c) During the Employment Period and for a period of
two years thereafter, the Executive will not use for the benefit
of anyone other than Main and its subsidiaries and affiliates or
disclose any of the Confidential Information for any reason or
purpose whatsoever except to authorized representatives of such
business entities or as directed or authorized by Main.
(d) With respect to those items of Confidential
Information which constitute trade secrets under applicable law,
the Executive's obligations of confidentiality and nondisclosure
as set forth in this section will continue and survive after the
two-year period as provided in Subsection (c) to the greatest
extent permitted by applicable law.
(e) The Executive will not remove any records,
documents, or any other tangible items (excluding the Executive's
personal property) from the premises of Main or its subsidiaries
or affiliates, in either original or duplicate form, except as
needed in the ordinary course of performing services hereunder.
(f) Upon termination of this Agreement, the Executive
will immediately surrender to the owner thereof all documents
(other than documents created by him) in his possession, custody
or control embodying the Confidential Information or any part
thereof and will not thereafter remove the same from the premises
on which it is located.
10. Remedies. Executive acknowledges and agrees that the
remedy at law of Main and of the Bank for a breach or threatened
breach of any of the provisions of Section 8 or 9 would be
inadequate and, in recognition of this fact, in the event of a
breach or threatened breach by the Executive of any of the
provisions of Section 8 or 9, it is agreed that, in addition to
the remedy at law, Main and the Bank will be entitled to, without
posting any bond, and the Executive agrees not to oppose any
request of Main and the Bank for, equitable relief in the form of
specific performance, a temporary restraining order, a temporary
or permanent injunction, or any other equitable remedy which may
then be available. Nothing herein contained will be construed as
prohibiting Main and the Bank from pursuing any other remedies
available to them for such breach or threatened breach.
11. Arbitration. Main, the Bank and Executive recognize
that in the event a dispute should arise between them concerning
the interpretation or implementation of this Agreement, lengthy
and expensive litigation will not afford a practical resolution
of the issues within a reasonable period of time. Consequently,
each party agrees that all disputes, disagreements and questions
of interpretation concerning this Agreement are to be submitted
for resolution to the American Arbitration Association
("Association") in Philadelphia, Pennsylvania, in accordance with
the Individual Employment Dispute Resolution rules of the
Association. Main and the Bank, or Executive, may initiate an
arbitration proceeding at any time by giving notice to the others
in accordance with the rules of the Association. The Association
will designate a single arbitrator to conduct the proceeding, but
Main and the Bank, and the Executive, may, as a matter of right,
require the substitution of a different arbitrator chosen by the
Association. Each such right of substitution may be exercised
only once. The arbitrator will not be bound by the rules of
evidence and procedure of the courts of the Commonwealth of
Pennsylvania but will be bound by the substantive law applicable
to this Agreement. The decision of the arbitrator, absent fraud,
duress, incompetence or gross and obvious error of fact, will be
final and binding upon the parties and will be enforceable in
courts of proper jurisdiction. Following written notice of a
request for arbitration, Main and the Bank, and the Executive,
will be entitled to an injunction restraining all further
proceedings in any pending or subsequently filed litigation
concerning this Agreement, except as otherwise provided herein.
12. Legal Expenses. Main and/or the Bank will pay to the
Executive all reasonable legal fees and expenses when incurred by
the Executive in seeking to obtain or enforce any right or
benefit provided by this Agreement, provided he brings the action
in good faith, and he prevails.
13. Indemnification. Main and the Bank will indemnify the
Executive, to the fullest extent permitted under Pennsylvania and
federal law, with respect to any threatened, pending or completed
legal or regulatory action, suit or proceeding brought against
him by reason of the fact that he is or was a director, officer,
employee or agent of Main or the Bank, or is or was serving at
the request of Main or the Bank as a director, officer, employee
or agent of another person or entity. To the fullest extent
permitted by Pennsylvania and federal law, Main and the Bank
will, in advance of final disposition, pay any and all expenses
incurred by the Executive in connection with any threatened,
pending or completed legal or regulatory action, suit or
proceeding with respect to which he may be entitled to
indemnification hereunder. Main and the Bank will use their best
efforts to obtain insurance coverage for the Executive under a
policy covering directors and officers thereof against
litigation, arbitrations and other legal and regulatory
proceedings; provided, however, that nothing herein is to be
construed as requiring such action if the Board of Directors of
Main and the Bank determine that such insurance coverage cannot
be obtained at commercially reasonable rates.
14. Notices. Any notice required or permitted to be given
under this Agreement will, to be effective hereunder, be given to
both Main and the Bank, in the case of notices given by the
Executive, and will, to be effective hereunder, be given by both
Main and the Bank, in the case of notices given to the Executive.
Any notice given by Main, to the extent required will be deemed
to be given by Main and the Bank. Any notice give to Main, to the
extent required will be deemed to be given to Main and the Bank.
Any such notice will be deemed properly given if in writing and
if mailed by registered or certified mail, postage prepaid with
return receipt requested, to the residence of the Executive, in
the case of notices to the Executive, and to the respective
principal offices of Main and of the Bank, in the case of notices
to Main and the Bank.
15. Waiver. No provision of this Agreement may be
modified, waived, or discharged unless such waiver, modification,
or discharge is agreed to in writing and signed by the Executive,
an executive officer of Main, and an executive officer of the
Bank, each such officer specifically designated by the Board of
Directors of Main and the Bank, respectively. No waiver by any
party hereto at any time or any breach by the other party hereto
of, or compliance with, any condition or provision of this
Agreement to be performed by such other party will be deemed a
waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
16. Assignment. This Agreement is not assignable by any
party hereto, except by Main and the Bank to any successor in
interest to the respective businesses of Main and the Bank.
17. Entire Agreement. This Agreement contains the entire
agreement of the parties relating to the subject matter of this
Agreement and, in accordance with the provisions of Section 27,
supersedes any prior agreement of the parties.
18. Successors; Binding Agreement.
(a) Main and the Bank will require any successor
(whether direct or indirect, by purchase, merger, consolidation,
or otherwise) to all or substantially all of the business and/or
assets of Main and/or the Bank to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that Main and the Bank would be required to perform it if no such
succession had taken place. Failure by Main and the Bank to
obtain such assumption and agreement prior to the effectiveness
of any such succession will constitute a material breach of this
Agreement. As used in this Agreement, "Main" and the "Bank"
means Main and the Bank as hereinbefore defined and any successor
to the business and/or assets of Main and/or the Bank as
aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(b) This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, heirs, distributees, devisees, and
legatees. If the Executive should die while any amount is
payable to the Executive under this Agreement if the Executive
had continued to live, all such amounts, unless otherwise
provided herein, will be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other
designee, or, if there is no such designee, to the Executive's
estate.
19. Termination.
(a) Unless the Executive's employment is terminated
pursuant to the provisions of Section 3 or Section 5, the term of
this Agreement will be for a period commencing on the date of
this Agreement and ending on December 31, 2001; provided,
however, that this Agreement will be automatically renewed on
January 1, 2001 for the two-year period commencing on such date
and ending on December 31, 2002, unless either party gives
written notice of nonrenewal to the other party on or before
November 1, 2000 (in which case this Agreement will continue in
effect through December 31, 2001); and provided further, that if
this Agreement is renewed on January 1, 2001, it will be
automatically renewed on January 1 of each subsequent year (the
"Annual Renewal Date") for a period ending two years from each
Annual Renewal Date unless either party gives written notice of
nonrenewal to the other party at least 60 days prior to an Annual
Renewal Date (in which case this Agreement will continue in
effect for a term ending one year from the Annual Renewal Date
immediately following such notice). For purposes of the
preceding sentence Main and the Bank will be considered one
party.
(b) Any termination of the Executive's employment
under this Agreement or of this Agreement will not affect the
benefit, noncompetition and confidential information provisions
of Sections 6, 7, 8, 9 or 12, which will, if relevant, survive
any such termination and remain in full force and effect in
accordance with their respective terms.
(c) Except as provided in Section 27, nothing herein
will be construed as limiting, restricting or eliminating any
rights the Executive may have under any plan, contract or
arrangement to which he is a party or in which he is a vested
participant; provided, however, that any termination payments
required hereunder will be in lieu of any severance benefits to
which he may be entitled under a severance plan or arrangement of
Main and the Bank; and provided further, that if the benefits
under any such plan or arrangement may not legally be eliminated,
then the payments hereunder will be correspondingly reduced in
such equitable manner as the Board of Directors of Main may
determine.
20. No Mitigation or Offset. The Executive will not be
required to mitigate the amount of any payment provided for in
this Agreement by seeking employment or otherwise; nor will any
amounts or benefits payable or provided hereunder be reduced in
the event he does secure employment, except as otherwise provided
herein.
21. Validity. The invalidity or unenforceability of any
provisions of this Agreement will not affect the validity or
enforceability of any other provision of this Agreement, which
will remain in full force and effect. In addition, if a
government regulatory agency recommends or orders that the Bank
terminate the employment of the Executive with the Bank or
relieve him of his duties as such relate to the Bank, the
Agreement or such provision will nevertheless be and remain an
obligation of Main enforceable against it in accordance with its
terms, notwithstanding any such termination of the Executive's
employment with the Bank.
22. Applicable Law. Except to the extent preempted by
federal law, this Agreement will be governed by and construed in
accordance with the domestic internal law of the Commonwealth of
Pennsylvania.
23. Number. Words used herein in the singular will be
construed as being used in the plural, as the context requires,
and vice versa.
24. Headings. The headings of the sections and subsections
of this Agreement are for convenience only and will not control
or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
25. References to Entities. All references to Main will be
deemed to include references to the Bank, as appropriate in the
relevant context, and vice versa. As of the date of this
Agreement, Main and the Bank share one Board of Directors. To
the extent, under this Agreement or law, an action is required by
the Board of Directors of the Bank, a similar action of the board
of Directors of Main shall be deemed sufficient
26. Guaranty. Main hereby irrevocably and unconditionally
guarantees to the Executive the full and timely performance by
the Bank of each and every obligation of the Bank contained in
this Agreement.
27. Effective Date; Termination of Prior Agreement. This
Agreement will become effective immediately upon the execution
and delivery of this Agreement by the parties hereto. Upon the
execution and delivery of this Agreement, any prior agreement
relating to the subject matter hereof, including without
limitation the 1998 Agreement, will be deemed automatically
terminated and be of no further force or effect.
28. Withholding for Taxes. All amounts and benefits paid
or provided hereunder will be subject to withholding for taxes as
required by law.
29. Individual Agreement. This Agreement is an agreement
solely between and among the parties hereto. It is intended to
constitute a nonqualified unfunded agreement for the benefit of a
key management employee and will be construed and interpreted in
a manner consistent with such intention.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
MAIN STREET BANCORP, INC.
By________________________________
(SEAL) Attest:___________________________
(Assistant) Secretary
("Main")
MAIN STREET BANK
By________________________________
(SEAL) Attest:___________________________
(Assistant) Secretary
("Bank")
Witness:
_______________________ ____________________________(SEAL)
XXXXXX X. XXXXXXX
("Executive")
Page <1>
