CHANGE-IN-CONTROL AGREEMENT
This AGREEMENT is made effective as of ----------- by and
among Xxxxxx Savings Bank (the "Savings Bank"), a Pennsylvania
chartered savings bank, with its principal administrative office
at Second & Pine Streets, Harrisburg, Pennsylvania, Xxxxxx
Financial, MHC (the "Holding Company"), a corporation organized
under the laws of the Commonwealth of Pennsylvania which is the
holding company for the Savings Bank, and ------------- (the
"Executive").
WHEREAS, the Savings Bank recognizes the substantial
contribution Executive has made to the Savings Bank and wishes to
protect Executive's position therewith for the period provided in
this Agreement; and
WHEREAS, Executive has been elected to, and has agreed to
serve in the position of ----------------- for the Savings Bank,
a position of substantial responsibility.
NOW, THEREFORE, in consideration of the contribution and
responsibilities of Executive, and upon the other terms and
conditions hereinafter provided, the parties hereto agree as
follows:
1. TERM OF AGREEMENT.
The term of this Agreement shall be deemed to have commenced
as of the date first above written and shall continue for a
period of thirty-six (36) full calendar months thereafter.
Commencing on the first anniversary date of this Agreement and
continuing at each anniversary date thereafter, the Agreement
shall renew for an additional year such that the remaining term
shall be three (3) years unless written notice is provided to the
Executive at least ten (10) days and not more then twenty (20)
days prior to any such anniversary date, that this Agreement
shall cease at the end of the thirty-six months following such
anniversary date. Prior to the written notice period for
nonrenewal, the Board of Directors of the Savings Bank ("Board")
will conduct a formal performance evaluation of the Executive for
purposes of determining whether to extend the Agreement, and the
results thereof shall be included in the minutes of the Board's
meeting.
2. PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL.
(a) Upon the occurrence of a Change in Control of the
Savings Bank or the Holding Company (as herein defined) followed
at any time during the term of this Agreement by the voluntary
(for any of the bases set forth below) or involuntary termination
of Executive's employment, other than for Cause, as defined in
Section 2(c) hereof, the provisions of Section 3 shall apply.
Upon the occurrence of a Change in Control, Executive shall have
the right to elect to voluntarily terminate his employment at any
time during the term of this Agreement following any demotion,
loss of title, office or significant authority, reduction in his
annual compensation, relocation of his principal place of
employment by more than 30 miles from its location immediately
prior to the Change in Control or the failure to continue in
effect any vacation benefits, pension plan, dental plan, life
insurance plan, health, accident or disability plan in which
Executive is participating immediately prior to the Change in
Control.
(b) "Change in Control" of the Bank or the Holding Company
shall mean (i) a plan of reorganization, merger, merger
conversion, consolidation or sale of all or substantially all of
the assets of the Bank or the Holding Company or a similar
transaction occurs in which the Bank or the Holding Company is
not the resulting entity; (ii) individuals who constitute the
board of directors of the Bank or the board of trustees of the
Holding Company on the date hereof cease for any reason to
constitute a majority thereof; or (iii) a change in control
within the meaning of 12 C.F.R. Section 303.4(a) or 12 C.F.R.
Section 225.41(b) occurs, as determined by the board of directors
of the Bank or the board of trustees of the Holding Company. In
the event the Holding Company converts from the mutual form of
organization to the stock form of organization at any time
subsequent to the effective date of this Agreement ("Stock
Holding Company"), a "change in control" of the Bank or the Stock
Holding Company for purposes of this Agreement shall mean an
event of a nature that: (I) would be required to be reported in
response to Item 1 of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or (II)
results in a Change in Control of the Savings Bank or the Stock
Holding Company within the meaning of the Change in Bank Control
Act and the Rules and Regulations promulgated by the Federal
Deposit Insurance Corporation ("FDIC") at 12 C.F.R. Section
303.4(a) with respect to the Savings Bank and the Board of
Governors of the Federal Reserve System ("FRB") at 12 C.F.R.
Section 225.41(b) with respect to the Stock Holding Company, as
in effect on the date hereof; (III) results in a transaction
requiring prior FRB approval under the Bank Holding Company Act
of 1956 and the regulations promulgated thereunder by the FRB at
12 C.F.R. Section 225.11, as in effect on the date hereof; or
(IV) without limitation such a Change in Control shall be deemed
to have occurred at such time as (a) any "person" (as the term is
used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Bank or the Stock Company representing 20% or more of the Bank's
or the Stock Company's outstanding securities except for any
securities of the Bank purchased by the Stock Company in
connection with the conversion of the Company to the stock form
and any securities purchased by the Bank's employee stock
ownership plan and trust; or (b) individuals who constitute the
Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the date hereof
whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board, or whose
nomination for election by the Stock Company's stockholders was
approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (b),
considered as though he were a member of the Incumbent Board; or
(c) a plan of reorganization, merger, consolidation, sale of all
or substantially all the assets of the Bank or the Stock Company
or similar transaction occurs in which the Bank or Stock Company
is not the resulting entity; or (d) a proxy statement shall be
distributed soliciting proxies from stockholders of the Stock
Company, by someone other than the current management of the
Stock Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Stock Company or
Bank or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities
then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the
Bank or the Stock Company; or (e) a tender offer is made for 20%
or more of the voting securities
of the Bank or Stock Company then outstanding.
(c) Executive shall not have the right to receive
termination benefits pursuant to Section 3 hereof upon
Termination for Cause. The term "Termination for Cause" shall
mean termination because of the Executive's personal dishonesty,
willful misconduct, any breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties,
willful 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 material provision of this
Agreement. For purposes of this Section, no act, or the failure
to act on Executive's part shall be "willful" unless done or
omitted to be done, not in good faith and without reasonable
belief that the action or omission was in the best interests of
the Holding Company or the Savings Bank. Notwithstanding the
foregoing, Executive shall not be deemed to have been Terminated
for Cause unless and until there shall have been delivered to him
a Notice of Termination which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than
two-thirds of the members of the Board at a meeting of the Board
called and held for that purpose (after reasonable notice to the
Executive and an opportunity for him, together with counsel, to
be heard before the Board), finding that in the good faith
opinion of the Board, the Executive was guilty of conduct
justifying Termination for Cause and specifying the particulars
thereof in detail. The Executive shall not have the right to
receive compensation or other benefits for any period after
Termination for Cause. Any stock options or limited rights
granted to Executive under any stock option plan or any unvested
awards granted to Executive under a Recognition and Retention
Plan of the Savings Bank, the Company or any subsidiary or
affiliate thereof, shall become null and void effective upon
Executive's receipt of Notice of Termination for Cause and shall
not be exercisable by Executive at any time subsequent to such
Termination for Cause.
3. TERMINATION BENEFITS.
(a) Upon the occurrence of a Change in Control, followed at
any time during the term of this Agreement by the voluntary or
involuntary termination of the Executive's employment, other than
for Termination for Cause, the Savings Bank and the Company shall
pay the Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be,
as severance pay or liquidated damages, or both, a sum equal to
three (3) times the average of the three preceding years' base
salary, including bonuses and any other cash or deferred
compensation paid, or to be paid, to the Executive for such years
and the amount of any contributions made, on behalf of the
Executive, to any employee benefit plans maintained by the
Savings Bank or the Holding Company for such years, except to the
extent such benefits are otherwise payable to Executive under
such plans upon a Change in Control.. At the election of the
Executive such payment may be made in a lump sum or paid in equal
monthly installments during the twelve (12) months following the
Executive's termination. In the event that no election is made,
payment to the Executive will be made on a monthly basis during
the remaining term of this Agreement.
(b) Upon the occurrence of a Change in Control of the
Savings Bank or the Holding Company followed at any time during
the term of this Agreement by the Executive's voluntary or
involuntary termination of employment, other than for Termination
for Cause, the Savings Bank
shall cause to be continued life, medical, dental and disability
coverage substantially identical to the coverage maintained by
the Savings Bank for the Executive prior to his severance. Such
coverage and payments shall cease upon the expiration of thirty-
six (36) months.
(c) Upon the occurrence of a Change in Control, the
Executive shall be entitled to receive benefits due him under, or
contributed by the Bank on his behalf pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or
other employee benefit plan maintained by the Bank on the
Executive's behalf to the extent that such benefits are not
otherwise paid to the Executive under a separate provision of
this Agreement.
(d) Notwithstanding the preceding paragraphs of this Section
3, in the event that:
(i) the aggregate payments or benefits to be made or
afforded to the Executive under said paragraphs (the "Termination
Benefits") would be deemed to include an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986
(the "Code") or any successor thereto, and
(ii) if such Termination Benefits were reduced to an amount
(the "Non-Triggering Amount"), the value of which is one dollar
($1.00) less than an amount equal to three (3) times Executive's
"base amount," as determined in accordance with said Section
280G, and the Non-Triggering Amount would be greater than the
aggregate value of the Termination Benefits (without such
reduction) minus the amount of tax required to be paid by the
Executive thereon by Section 4999 of the Code, then the
Termination Benefits shall be reduced to the Non-Triggering
Amount. The allocation of the reduction required hereby among the
Termination Benefits provided by the preceding paragraphs of this
Section 3 shall be determined by the-Executive.
4. NOTICE OF TERMINATION.
(a) Any purported termination by the Savings Bank, the
Holding Company or by Executive shall be communicated by Notice
of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice
which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so
indicated.
(b) "Date of Termination" shall mean the date specified in
the Notice of Termination which, in the instance of Termination
for Cause, shall be immediate.
5. SOURCE OF PAYMENTS.
It is intended by the parties hereto that all payments
provided in this Agreement shall be paid in cash or check from
the general funds of the Savings Bank. The Holding Company,
however, guarantees payment and provision of all amounts and
benefits due hereunder to the Executive and, if such amounts and
benefits due from the Savings Bank are not timely paid or
provided by the Savings Bank, such amounts and benefits shall be
paid or provided by the Holding Company.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.
This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the
Savings Bank and the Executive, except that this Agreement shall
not affect or operate to reduce any benefit or compensation
inuring to the Executive of a kind elsewhere provided. No
provision of this Agreement shall be interpreted to mean that the
Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive
the right to continue in the employ of Savings Bank or shall
impose on the Savings Bank any obligation to employ or retain the
Executive in its employ for any period.
7. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge,
pledge, or hypothecation, or to execution, attachment, levy, or
similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action
shall be null, void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the
benefit of, the Executive, the Savings Bank and their respective
successors and assigns.
8. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by
an instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No
such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or
as to any act other than that specifically waived.
9. REQUIRED REGULATORY PROVISIONS.
(a) The Board may terminate the Executive's employment at
any time, but any termination by the Board, other than
Termination for Cause, shall not prejudice the Executive's right
to compensation or other benefits under this Agreement. The
Executive shall not have the right to
receive compensation or other benefits for any period after
Termination for Cause as defined in Section 2 hereinabove.
10. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any
part of any provision, is held invalid, such invalidity shall not
affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and
part thereof shall to the full extent consistent with law
continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included
solely for convenience of reference and shall not control the
meaning or interpretation of any of the provisions of this
Agreement.
12. GOVERNING LAW.
The validity, interpretation, performance, and enforcement
of this Agreement shall be governed by Pennsylvania law.
13. ARBITRATION.
Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration
in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall be entitled to seek specific
performance of his right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under
or in connection with this Agreement.
In the event any dispute or controversy arising under or in
connection with Executive's termination is resolved in favor of
the Executive, whether by judgment, arbitration or settlement,
Executive shall be entitled to the payment of all back-pay,
including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under
this Agreement.
14. PAYMENT OF COSTS AND LEGAL FEES.
All reasonable costs and legal fees paid or incurred by the
Executive pursuant to any dispute or question of interpretation
relating to this Agreement shall be paid or reimbursed by the
Savings Bank (which payments are guaranteed by the Holding
Company pursuant to Section 5 hereof) if Executive is successful
pursuant to a legal judgment, arbitration or settlement:
15. INDEMNIFICATION.
The Savings Bank shall provide Executive (including his or
her legal representatives, successors and assigns) with coverage
under a standard directors' and officers' liability insurance
policy at its expense, or in lieu thereof, shall indemnify
Executive (including his or her legal representatives, successors
and assigns) to the fullest extent permitted under Pennsylvania
law against all expenses and liabilities reasonably incurred by
Executive in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of his having
been a trustee or officer of the Savings Bank (whether or not he
continues to be a trustee or officer at the time of incurring
such expenses or liabilities); such expenses or liabilities to
include, but not limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements for
reasonable costs and expenses incurred by Executive in defending
or settling any judicial or administrative proceeding, or
threatened proceeding, whether civil, criminal or otherwise,
including any appeal or other proceeding for review.
Indemnification by the Savings Bank shall be made only upon
the final judgment on the merits in the favor of the Executive,
in case of settlement, in case of final judgment against
Executive or in the case of final judgment in favor of Executive
other than on the merits, if a majority of the disinterested
directors of the Savings Bank determine Executive was acting in
good faith within the scope of Executive's employment or
authority.
Any such indemnification of Executive for such expenses and
liabilities are to include, but not be limited to, judgments,
court costs and attorneys' fees and the cost of reasonable
settlements, such settlements to be approved by the Board of
Directors of the Savings Bank, if such action is brought against
Executive in his or her capacity as a officer or trustee of the
Savings Bank, provided however, such indemnity shall not extend
to matters as to which Executive is finally adjudged to be liable
for willful misconduct in the performance of his or her duties.
16. SUCCESSOR TO THE BANK.
The Savings Bank shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all the business or assets of
the Savings Bank or the Holding Company, expressly and
unconditionally to assume and agree to perform the Savings Bank's
obligations under this Agreement, in the same manner and to the
same extent that the Savings Bank would be required to perform if
no such succession or assignment had taken place.
17. SIGNATURES.
IN WITNESS WHEREOF, Xxxxxx Savings Bank and Xxxxxx
Financial, MHC have caused this Agreement to be executed by their
duly authorized officers, and Executives have signed this
Agreement, on the ------- day of -----------------.
ATTEST XXXXXX SAVINGS BANK
------------------------------ BY: --------------------------
SEAL
ATTEST XXXXXX FINANCIAL, MHC
(Guarantor)
------------------------------ BY: --------------------------
SEAL
WITNESS:
------------------------------ BY: --------------------------
