EXECUTIVE EMPLOYMENT AGREEMENT FIRST CHESTER COUNTY CORPORATION THE FIRST NATIONAL BANK OF CHESTER COUNTY and ANNA RUTH SMITH
EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
FIRST XXXXXXX COUNTY CORPORATION
THE FIRST NATIONAL BANK OF XXXXXXX COUNTY
and
XXXX XXXX XXXXX
TABLE OF CONTENTS
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Employment |
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Term |
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Compensation |
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4. |
Position and Responsibilities |
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5. |
Termination |
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Indemnification |
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Expenses and Automobile |
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8. |
Restrictive Covenant |
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9. |
Binding Effect |
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10. |
Notice |
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11. |
Waiver of Breach |
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12. |
Vested Benefits |
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13. |
Savings Clause |
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14. |
Governing Law |
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15. |
Entire Agreement; Modification |
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EXHIBIT “A” |
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THIS EMPLOYMENT AGREEMENT made this 18th day of September, 2008, by and between FIRST XXXXXXX COUNTY CORPORATION, a Pennsylvania business corporation, and THE FIRST NATIONAL BANK OF XXXXXXX COUNTY, a wholly-owned subsidiary of First Xxxxxxx County Corporation and a national banking association with its principal offices located at 0 Xxxxx Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx (hereinafter individually referred to as “Corporation” and “Bank” respectively, and collectively referred to as “FNB”) and XXXX XXXX XXXXX, of 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to as “Xxxxx”).
Reference is made to that certain Agreement and Plan of Merger, dated of even date herewith by and among, the Corporation, the Bank and American Home Bank, National Association (“AHB”) (the “Merger Agreement”). Capitalized terms that are not defined herein have the meanings given to them in the Merger Agreement.
This Agreement is being executed as an inducement to the Corporation and Bank to enter into and to perform their respective obligations under the Merger Agreement and as a condition to the Corporation’s and the Bank’s obligations under the Merger Agreement.
Xxxxx is currently the President and Chief Operating Officer of AHB. Upon consummation of the transactions contemplated by the Merger Agreement, and pursuant to the terms thereof, Xxxxx is to become the President of the American Home Bank Division of FNB (the “AHB Division”).
Xxxxx’x leadership skills and services have constituted a major factor in the successful growth and development of AHB.
FNB desires to employ and retain the experience and financial ability and services of Xxxxx as President of the AHB Division from the effective date hereof and to prevent any
other business in competition with FNB from securing the benefit of her services, background and expertise in the banking business.
The terms, conditions and undertakings of this Agreement were submitted to and duly approved and authorized by the Boards of Directors of both the Corporation and the Bank.
NOW, THEREFORE, in consideration of the foregoing recitals, which are hereby incorporated by reference, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment
Upon consummation of the transactions contemplated by the Merger Agreement, FNB will employ Xxxxx as the President of the AHB Division, and Xxxxx hereby accepts such employment, under and subject to the terms and conditions hereinafter set forth. The “Effective Date” of the transactions contemplated by the Merger Agreement and as defined therein is also referred to herein as the “Employment Commencement Date.”
2. Term
Subject to the provisions for termination of this Agreement provided in Paragraph 5 hereof, the term of this Agreement shall be for a period commencing the Effective Date and ending at 11:59 p.m. on December 31, 2010 (the “Term”). On January 1, 2010 and on each succeeding January 1, the Term shall be extended automatically for one year, unless either of the following two conditions is met: (a) FNB or Xxxxx give written termination notice pursuant to Section 5 hereof, or (b) FNB or Xxxxx agree to a mutually acceptable date on which to terminate this Agreement.
3. Compensation
During the Term of this Agreement, FNB shall pay Xxxxx a salary (hereinafter referred to as “Compensation”) and provide Xxxxx with life, health and disability insurance
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coverage, retirement (qualified and nonqualified) benefits, vacations, bonuses, and other benefits (hereinafter collectively referred to as the “Benefits”), the amounts and nature of which shall be fixed by the Boards of Directors of the Corporation and the Bank from time to time and set forth on the attached Exhibit “A”; provided, however, that in no event shall Xxxxx’x Compensation be less than one hundred percent (100%) of the Compensation set forth on Exhibit “A”, and in no event shall Xxxxx’x Benefits be less than or materially different from the Benefits she is to receive as of the date of this Agreement.
4. Position and Responsibilities
(a) Position and Duties. Xxxxx will be employed as the President of the AHB Division, reporting to the Managing Director of the AHB Division, and, except as set forth in Section 5 hereof, will continue to serve as the President of the AHB Division throughout the entire Term. In no event shall Xxxxx be employed by the Corporation or the Bank during any calendar year subsequent to 2008 at a lower position or rank and any such diminution in position or authority shall be considered a breach of this Agreement by FNB, which breach FNB shall be provided an opportunity to cure within thirty (30) days upon notice to FNB by Xxxxx. Xxxxx shall devote her full time and efforts solely to the business of FNB and the AHB Division and shall diligently, efficiently and effectively perform such duties as shall be assigned to her, which shall consist of the general and active management of the business of the AHB Division and such other duties of supervision and management as are generally vested in the office of the President of a major division or as are directed or otherwise set forth in job descriptions established by the Boards of Directors of the Corporation or the Bank for such offices. Unless otherwise directed by the Board of Directors of the Corporation or the Bank, the Chief Executive Officer of the Corporation or the Bank, the President of the Corporation or the Bank, or the Managing Director of the AHB Division, Xxxxx shall have overall responsibility for the management, profitability
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and performance of the AHB Division which includes, without limitation, responsibility for ensuring the safety and soundness of FNB to the extent impacted by the AHB Division. Xxxxx shall at all times during the Term of this Agreement refrain from doing any act, disclosing any information or making any statements to any person other than officers of FNB which may result in the disclosure of confidential information or adversely affect the good reputation of FNB in the community or which might adversely affect the professional or business relationship between FNB and any business, depositor, borrower or any other person with whom FNB is doing business or is contemplating doing business.
(b) Office and Support. FNB shall provide Xxxxx with an office, secretarial assistance and such other facilities and support services as shall be suitable to Xxxxx’x position and responsibilities as set forth above and as may be necessary to enable Xxxxx to perform such duties effectively and efficiently.
(c) Location of Office. In connection with Xxxxx’x employment by the Corporation and the Bank, Xxxxx shall maintain her office at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx, or at such other office as the Board of Directors of the Corporation or the Bank may select within the immediate vicinity of Mountville, Pennsylvania.
5. Termination
(a) Death. If Xxxxx dies during her employment hereunder, her Compensation and Benefits hereunder shall terminate, and her bonus (if any) shall be prorated as of the last day of the third month after the month in which she dies.
(b) Disability. If Xxxxx shall become disabled (as determined by FNB’s insurance carrier or a physician of its choice) during the Term, then from and after the date upon which it is determined that Xxxxx became disabled and until such time as Xxxxx returns to the full time employment at FNB, she shall not receive her Compensation and Benefits, but shall only be
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entitled to receive disability benefits as are provided under the disability insurance and/or salary continuation policy covering Xxxxx which is maintained in force by FNB at the time such disability occurs. FNB shall maintain a disability insurance policy or salary continuation policy covering Xxxxx during the entire Term, and FNB shall not cause or suffer any termination, lapse, suspension or modification of any of such policies or any reductions in the amounts of coverage provided thereunder without first giving Xxxxx at least thirty (30) days prior written notice thereof.
(c) For Cause. The Board of Directors of the Corporation or the Bank may terminate this Agreement at any time if Xxxxx is convicted of a crime which is a felony or misdemeanor and that involves fraud, dishonesty or moral turpitude, or if she breaches any material provision of this Agreement or substantially fails to provide the services which are required of her under the terms of this Agreement. However, prior to terminating this Agreement by reason of Xxxxx’x failure to provide services hereunder or her breach of any provision of this Agreement, the Board of Directors of the Corporation or the Bank shall first give Xxxxx written notice specifically identifying the manner in which Xxxxx has breached the terms of this Agreement and the approximate date or dates on which such violations have occurred. Xxxxx shall have thirty (30) days from her receipt of such notice within which to cure or correct the effects of such breach and to report in writing to the Boards of Directors of the Corporation and the Bank all steps which she has taken to cure such breach. If Xxxxx shall not have corrected or cured such breach or diligently taken all steps which are necessary to do so within the aforesaid thirty (30) day period, the Board of Directors of the Corporation or the Bank may terminate this Agreement immediately, upon giving Xxxxx written notice of such termination on or after the 31st day following the date on which notice of the breach was
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delivered to Xxxxx. If the breach asserted by the Board of Directors of the Corporation or the Bank is, because of its nature, incapable of being corrected or cured, then such breach shall not be cause for termination of this Agreement unless such breach shall be deemed to have caused FNB significant and irreparable harm in the opinion of a simple majority of all of the members of the Board of Directors of the Corporation or the Bank. Any decision rendered by the Board of Directors of the Corporation or the Bank which reasonably determines that such breach has caused significant or irreparable harm to FNB shall be final, binding and conclusive for purposes of this Agreement and shall not be subject to challenge by Xxxxx. If such breach is not deemed to have caused FNB significant and irreparable harm, then this Agreement may not be terminated by reason thereof, but any future breach of a similar nature shall be cause for immediate termination by the Board of Directors of the Corporation or the Bank upon giving Xxxxx written notice thereof. If this Agreement is terminated by FNB for cause pursuant to this subparagraph, then FNB shall be under no obligation to provide Compensation or Benefits to Xxxxx following the effective date of such termination, except for such Compensation and Benefits which have accrued and which have not been paid or furnished as of the effective date of such termination.
(d) Removal Without Cause. The Corporation or the Bank shall have the right at any time upon written notice to Xxxxx, to terminate the employment of Xxxxx hereunder. If such termination by the Corporation or the Bank is not by reason of disability pursuant to paragraph (b), of this Section 5 or for cause pursuant to paragraph (c) of this Section 5, FNB shall be obligated to continue to pay the Compensation and provide the Benefits to Xxxxx for twelve (12) months, at the rate, times and intervals at which such Compensation and Benefits are being paid or provided as of the date on which FNB terminates the employment of Xxxxx.
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(e) Breach by FNB. If FNB breaches any provision of this Agreement (specifically including, but not limited to, substantial diminution in the position and authority of Xxxxx which has not been cured by FNB as set forth in the preceding paragraphs), Xxxxx may leave the employment of FNB; however, Xxxxx must provide written notice to FNB of any alleged breach and FNB must have thirty (30) days to cure or correct such breach or otherwise inform Xxxxx that it declines to do so. If FNB fails to cure or correct such breach, or otherwise informs Xxxxx that it declines to do so, Xxxxx will be under no obligation to perform her duties hereunder and shall have no further liability or obligations under any provisions of this Agreement. In such event, however, FNB shall be obligated to continue to pay the Compensation and provide the Benefits to Xxxxx for twelve (12) months, at the rate, times and intervals at which such Compensation is being paid on the date on which FNB commits a breach of this Agreement.
(f) By Xxxxx. Xxxxx may terminate this Agreement effective as of December 31st of any year during the Term of this Agreement for any reason, by giving the Boards of Directors of the Corporation and the Bank written notice thereof on or before December 1st of such year. If Xxxxx terminates this Agreement pursuant to this subparagraph, FNB shall be under no obligation to pay any Compensation or provide any Benefits to Xxxxx following the effective date of such termination, except that FNB shall remain liable to pay the Compensation and Benefits which have accrued but which remain unpaid or unfurnished as of the effective date of such termination.
(g) At End of Term. If FNB terminates Xxxxx’x employment hereunder as of the end of the Term or any extension thereof, FNB shall be obligated, as severance payments, to continue to pay the Compensation and provide the Benefits to Xxxxx for a period of twelve (12)
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months after such termination at the rates, times and intervals at which such Compensation and Benefits are being paid or provided as of the date on which FNB terminates the employment of Xxxxx. If Xxxxx’x employment by FNB continues after the end of the Term or any extension thereof, no severance payments will be provided to her.
(h) Termination After a Change in the Ownership or Effective Control. If Xxxxx’x employment is terminated (i) by the Corporation or the Bank and such termination is not by reason of death, disability or for cause as set forth in this Section 5, (ii) or by Xxxxx pursuant to Section 5 of this Agreement, and such termination is within two years after a “Change in the Ownership or Effective Control”, then the Corporation and the Bank shall be obligated, jointly and severally, to continue to provide Xxxxx with the Compensation and Benefits provided for two (2) years after such termination (in lieu of other continuation payments provided in this Agreement). Such Compensation and Benefits shall be paid and provided at the rate, times and intervals at which such compensation and benefits were paid or provided on the date of such termination of Xxxxx’x employment. A Change in the Ownership or Effective Control of the Corporation or the Bank occurs under the terms of Treasury Regulations, Section 1.409A-3(i)(5).
(i) Limitation on Payments. If there is a determination, either made or confirmed by FNB’s outside legal counsel, that any payment to Xxxxx pursuant to this Agreement or otherwise would be subject to the excise tax imposed by Section 4999 of the Code or any similar tax imposed by federal, state or local law, Xxxxx shall receive a payment such that, after payment of all taxes on such amount, leaves a balance sufficient to pay the excise or similar tax.
(j) Compliance with Section 409A. Payments made pursuant to this Agreement that are subject to the provisions of Section 409A of the Code may be made only in
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compliance with that Section. Xxxxx agrees to any changes in the timing of distributions or other provisions that are necessary to assure compliance with Section 409A.
6. Indemnification
FNB agrees to indemnify Xxxxx to the maximum extent permitted under applicable law for any liability incurred by Xxxxx in her capacity as an officer or director of FNB. In such right or rights of indemnification which Xxxxx shall have as set forth hereunder or in the By-laws of the Corporation or the Bank as of the date Xxxxx’x employment hereunder is terminated shall survive such termination. FNB shall obtain directors’ and officers’ liability insurance with coverage relating to all acts and omissions alleged to have occurred during the Term of this Agreement.
7. Expenses and Automobile
Xxxxx is authorized to incur reasonable expenses for promoting the business of FNB, including expenses for travel, entertainment and similar items on behalf of FNB business. FNB shall reimburse Xxxxx for all such expenses upon the presentation by Xxxxx, from time to time, of an itemized account of such expenditures. In addition, FNB shall provide Xxxxx with an automobile for her use during the Term.
8. Restrictive Covenant
(a) During the Term of this Agreement and for a period of one (1) year thereafter, Xxxxx shall not, directly or indirectly, be employed by or enter into a consulting arrangement with or otherwise agree to perform personal services for any other bank or financial institution, including any mortgage banking business, doing business in Pennsylvania, New Jersey, New York, Maryland, Delaware or in any other state in which the AHB Division generated 5% or more of its business in the preceding twelve (12) months (the “Applicable Area”); directly or indirectly employ or seek to employ any person employed at that time by
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FNB, or otherwise encourage or entice any such person to leave such employment, or solicit any customers or vendors of FNB on behalf of or for the benefit of any such bank or financial institution, including any mortgage banking business; provided, however, that if Xxxxx terminates this Agreement by reason of a breach of this Agreement by FNB or if Xxxxx’x employment is terminated for any reason other than pursuant to Sections 5(c) or 5(f) of this Agreement, this restrictive covenant shall be null and void and Xxxxx shall be entitled to be employed by any bank or financial institution, including any mortgage banking business, doing business in the Applicable Area.
(b) Xxxxx covenants and agrees that at no time during the term of this Agreement, nor at any time following any termination of employment xxxx Xxxxx communicate, furnish, divulge or disclose in any manner to any person or entity any Confidential Information (as defined in 8(c)) without the prior express written consent of FNB. After a termination of employment, Xxxxx shall not, without the prior written consent of FNB, or as may otherwise be required by law or legal process, communicate or divulge such Confidential Information to anyone other than FNB and its designees.
(c) For purposes of this Section, “Confidential Information” shall mean financial information about FNB, contract terms with vendors and suppliers, customer and supplier lists and data, trade secrets and such other competitively-sensitive information to which Xxxxx has access as a result of her positions with FNB, except that Confidential Information shall not include any information which was or becomes generally available to the public (i) other than as a result of a wrongful disclosure by Xxxxx, (ii) as a result of disclosure by Xxxxx during the term of this Agreement which she reasonably and in good faith believes is required by the performance of her duties under this Agreement, or (iii) any information compelled to be
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disclosed by applicable law or administrative regulation; provided that Xxxxx, to the extent not prohibited from doing so by applicable law or administrative regulation, shall give FNB written notice of the information to be so disclosed pursuant to clause (iii) of this sentence as far in advance of its disclosure as is practicable.
(d) Xxxxx acknowledges that monetary damages will not be an adequate remedy for FNB in the event of a breach of this Section 8, and that it would be impossible for FNB to measure damages in the event of such a breach. Therefore, Xxxxx agrees that, in addition to other rights that FNB may have, FNB is entitled to an injunction preventing Xxxxx from any breach of this Section 8.
9. Binding Effect
This Agreement shall inure to the benefit of and be binding upon FNB, its successors and assigns, including, without limitation, any person, partnership, company or corporation which may acquire all or substantially all of the assets or business of FNB or into which FNB may be liquidated, consolidated, merged or otherwise combines, regardless of the identity or form of the surviving entity, and shall inure to the benefit of and be binding upon Xxxxx, her heirs, and personal representatives.
10. Notice
Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail, return receipt requested, correctly addressed to Xxxxx’x residence, in the case of Xxxxx, or to its principal office, in the case of FNB. Copies of all such notices shall simultaneously be personally delivered or sent by United States first class, registered or certified mail, or by a nationally-recognized overnight delivery service, to Xxxxxxxx X. Xxxxxxx, Esquire, Xxxx Xxxxx LLP, 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxxxx Xxxx, 00xx Xxxxx, Xxxxxxxxxxxx, XX 00000.
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11. Waiver of Breach
Waiver by either party of the breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by the other party.
12. Vested Benefits
This Agreement shall not limit or in any way affect any benefits which Xxxxx may be entitled to receive under any benefits in which Xxxxx has a vested interest as of the date of this Agreement.
13. Savings Clause
Should any provision contained herein be determined by decree or court or other judicial body to be illegal or unenforceable, such provision shall be considered null and void and the remainder of this Agreement shall remain in full force and effect and shall be construed without reference to any such provision. Nevertheless, it is the intention of the parties hereto that any such invalid or unenforceable provision shall, if possible, be construed and enforced in such a manner as to make the same valid and enforceable under applicable law and consistent with the reasonable intention of the parties as expressed in such provision.
14. Governing Law
Questions pertaining to the validity, construction and administration of this Agreement shall be determined in accordance with the laws of the Commonwealth of Pennsylvania.
15. Entire Agreement; Modification
This Agreement supersedes the Letter dated June 9, 2008 from the Corporation to Xxxxx, in her capacity as President and Chief Operating Officer of AHB, and constitutes the entire understanding and agreement between the parties hereto with regard to the subject matter
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hereof, and there are no other agreements, conditions, representations or understandings, oral or written, expressed or implied, with regard to the subject of this Agreement. This Agreement may be amended or modified only by a written instrument executed by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
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THE FIRST NATIONAL BANK OF XXXXXXX COUNTY |
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By: |
/s/ Xxxxx X. Xxxxx |
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Xxxxx X. Xxxxx, President |
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FIRST XXXXXXX COUNTY CORPORATION |
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By: |
/s/ Xxxx X. Xxxxxxxxxx, III |
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Xxxx X. Xxxxxxxxxx, III, Chairman |
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and Chief Executive Officer |
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FIRST XXXXXXX COUNTY CORPORATION |
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By: |
/s/ Xxxx Xxxx Xxxxx |
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Xxxx Xxxx Xxxxx |
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Exhibit “A”
Xxxx Xxxx Xxxxx, President, AHB Division
2008 Compensation and Benefits
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Annual Salary |
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$195,000 |
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Group Medical Insurance |
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AHB Blue Shield, until converted to Personal Choice (Family Tier) |
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Group Dental Insurance |
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AHB Dental until converted to Delta Dental (Family Tier) |
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Group Vision Insurance |
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AHB Vision Benefits of America, until converted to Vision Benefits of America (Family Tier) |
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Retirement Savings Plan(s): |
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Qualified Plan: AHB 401(k) with match of 50 cents on every dollar up to $3,000 per year, until converted to 401(k) Plan administered by Lincoln Financial Group with Bank match: of 75 cents on every dollar up to 5% of base earnings. Annual discretionary profit sharing contribution made into 401(k) account: 3% of the first $30,000 of base salary, 6% of earnings above $30,000.
Please refer to IRS indexed dollar limits for 2008 for qualified and non-qualified plans. |
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Non Qualified Plan: First National Bank of Xxxxxxx County Supplemental Benefit Retirement Plan Bank contributes 3% of annual salary into an interest bearing account.
Please refer to IRS indexed dollar limits for 2008 for qualified and non-qualified plans. |
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Group Life/AD&D Insurance |
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AHB Group Life/ADD until converted to All group life/disability policies are administered by Principal Financial Group. Please refer to the group policy which outlines exclusions and limitations.
Coverage 3x annual salary up to a maximum of $345,000 |
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Supplemental Life Insurance |
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As approved by the Board of Directors and P&C Committee |
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Group Short Term Disability Insurance |
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Weekly maximum - $2,500 (duration is 24 weeks) |
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Group Long Term Disability Insurance |
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Coverage 60% of pre-disability earnings |
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Executive Incentive Plan |
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As set forth in Definitive Merger Agreement, Section 6.14 |
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Automobile Lease |
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In lieu of Auto Allowance |
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Paid Time Off |
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Five weeks PTO |
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