EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") entered into on December 19, 1997, by
and between Xxxxxx Financial MHC, a Pennsylvania corporation (the "Company"),
with its principal office in Harrisburg, Pennsylvania, and Xxxxxxx X. Xxxxxxx,
Xx., a resident of State College, Pennsylvania ("Executive").
WHEREAS, the Company and Executive wish to enter into an Employment
Agreement to evidence the terms and conditions of Executive's appointment as
President and Chief Executive Officer of the Company and to provide for
Executive's continued employment by the Company, upon the terms and conditions
set forth herein:
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment - The Company hereby agrees to employ Executive, and Executive
hereby accepts such employment and agrees to perform his duties and
responsibilities, in accordance with the terms, conditions and provisions
hereinafter set forth.
1.1. Employment Term. The term of Executive's employment under this
Agreement shall commence on January 5, 1998 (the "Effective Date") and shall
continue until December 31, 2000; provided, however, that on December 31 of each
calendar year, the term of the Agreement shall automatically extend for an
additional year renewal unless one party notifies the other, in writing at least
60 days prior to the end of the then current term, that the Agreement will not
be further renewed or until the agreement is terminated in accordance with
Section 5 or Section 6. The period commencing as of the Effective Date and
ending on the date on which the term of Executive's employment under the
Agreement shall terminate is hereinafter referred to as the "Employment Term".
1.2. Duties and Responsibilities. Executive shall serve as President and
Chief Executive Officer of the Company during the Employment Term and the
Company shall cause Executive to be elected as a member of its Board of
Directors (the "Board"), and Executive agrees to serve as a director, during the
Employment Term. During the Employment Term, Executive shall perform all duties
and accept all responsibilities incident to such positions as may be assigned to
him by the Board.
1.3. Extent of Service. During the Employment Term, Executive agrees to use
his best efforts to carry out his duties and responsibilities under Section 1.2
hereof and, consistent with the other provisions of this Agreement, to devote
substantially all his business time, attention and energy thereto. The foregoing
shall not be construed as preventing Executive from continuing in any director
capacities in which he is currently involved or from making investments in other
businesses or enterprises provided that Executive agrees not to become engaged
in any other business activity which, in the reasonable judgment of the Board,
is likely to interfere with his ability to discharge his duties and
responsibilities to the Company. Executive further agrees not to accept any new
positions on either a part time or independent
contracting basis for any other business or enterprise during the Employment
Term without the prior written consent of the Board.
1.4. Base Salary. For all the services rendered by Executive hereunder, the
Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $275,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly). Executive's Base Salary for each year
shall be reviewed for appropriate adjustment (but shall not be reduced below
the then current level) by the Board pursuant to its normal performance review
policies for senior level executives.
1.5. Retirement and Benefit Coverages and Perquisites. During the Employment
Term, Executive shall be entitled to participate in all (a) employee pension and
retirement plans and programs ("Retirement Plans") and (b) welfare benefit plans
and programs ("Benefit Coverages"), in each case made available to the Company's
senior level executives as a group or to its employees generally, as such
Retirement Plans or Benefit Coverages may be in effect from time to time.
Notwithstanding the terms of any of the Retirement Plans, Executive shall at all
times after the Effective Date have a fully vested right to all benefits earned
under such Retirement Plans payable under such Retirement Plans or by the
Company where the effect of granting such full vesting would present a
qualification issue for any such Retirement Plan under the applicable tax laws.
Executive shall also be entitled to an automobile, country club initiation fees,
dues and assessments and any other executive perquisites all in accordance with
the Company's policy for senior executives.
1.6. Reimbursement of Expenses; Vacation. Executive shall be provided with
reimbursement of expenses related to his employment by the Company on a basis no
less favorable than that which may be authorized from time to time for senior
level executives as a group, and entitled to vacation (five weeks beginning in
calendar year 1998) and holidays in accordance with the Company's normal
personnel policies for senior level executives.
1.7. Short-Term Incentive Compensation. Executive shall be entitled to
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally. Bonuses under such programs
shall be based upon achievement of certain annual individual or business
performance objectives specified and approved by the Board (or a Committee
thereof) in its sole discretion; provided, however, that for the Company's
fiscal year ended December 31, 1998, Executive shall be paid a guaranteed
bonus in an amount equal to 30% of Executive's Base Salary.
1.8. Long-Term Incentive Compensation; Stock Options.
(a) Executive shall also be entitled to participate in any long-term
incentive compensation programs established by the Company for its senior level
executives generally. Bonuses under such programs shall be based upon
achievement of certain individual or business performance objectives specified
and approved by the Board (or a Committee thereof) in its sole discretion.
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(b) On the Effective Date, Executive shall be granted a non-qualified stock
option, pursuant to the terms of the Company's Incentive Stock Option Plan (the
"Plan") to purchase 50,000 shares of the Company's common stock (the "Company
Stock") at an exercise price per share equal to the closing price of the Company
Stock as listed on the NASDAQ National Market on the Effective Date (the
"Exercise Price"). Such option shall become exercisable in five installments on
each of the first five anniversaries of the Effective Date if Executive is
employed by the Company on each such anniversary date, except as otherwise
provided in this Agreement. Notwithstanding the foregoing, an adjustment or
adjustments shall be made to this non-qualified option to the extent provided in
Exhibit A to this Agreement. Upon the Executive's termination of employment from
the Company for any reason other than disability, retirement, death or "cause"
(as defined in Section 5.3), such option shall be exercisable only to the extent
vested as of the date of termination and shall be exercisable until the earlier
(i) the 10th anniversary of the Effective Date or (ii) three months from the
date of termination. In the event of the Executive's termination of employment
from the Company for "cause," all rights under such option shall immediately
expire upon termination. In the event of the Executive's termination of
employment from the Company by reason of death, disability or retirement, such
option shall be exercisable by the Executive (or his legal representatives or
beneficiaries) for a period of one year following the date of Executive's death,
retirement or cessation of employment due to disability. In no event shall the
exercise period extend beyond the expiration of the option term.
(c) On the Effective Date, Executive shall also be granted an incentive
stock option pursuant to the terms of the Plan, to purchase 25,000 shares of
Company Stock at a price per share equal to the closing price of the Company
Stock on the NASDAQ National Market on the Effective Date. Such option shall
become exercisable in five installments on each of the first five anniversaries
of the Effective Date if Executive is employed by the Company on each such
anniversary date, except as otherwise provided in this Agreement. Upon the
Executive's termination of employment from the Company for any reason other than
disability, retirement, death or "cause" (as defined in Section 5.3), such
option shall be exercisable only to the extent vested as of the date of
termination and shall be exercisable until the earlier (i) the 10th anniversary
of the Effective Date or (ii) three months from the date of termination. In the
event of the Executive's termination of employment from the Company for "cause,"
all rights under such option shall immediately expire upon termination. In the
event of the Executive's termination of employment from the Company by reason of
death, disability or retirement, such option shall be exercisable by the
Executive (or his legal representatives or beneficiaries) for a period of one
year following the date of Executive's death, retirement or cessation of
employment due to disability; provided, that such option shall not be eligible
for treatment as an incentive stock option to the extent such option is
exercised more than three months following the date of the Executive's
retirement. In no event shall the exercise period extend beyond the expiration
of the option term.
1.9. Other Payments.
(a) Upon the execution of this Agreement, Executive shall receive an initial
bonus equal to the sum of, the value of options to purchase 12,500 shares of
common stock of PNC
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based on an option exercise price of $43.75 per share and the fair market value
of the PNC shares based on the closing price of such shares on the New York
Stock Exchange on the date of this Agreement. Such bonus shall be paid one-half
in shares of Company Stock, valued at a price per share equal to the closing
price of the Company Stock on the NASDAQ National Market on the Effective Date,
and one-half in cash.
(b) The Company shall also pay to Executive the cost of the COBRA premium
that Executive is required to pay for the months of January through the first
day of the month in which Executive is able to participate in the Company's
medical plan, in order to compensate Executive for the cost of maintaining such
coverage under the plan of his former employer.
(c) The Company shall also pay to Executive, on or before March 31, 1998, a
bonus equal to the present value of those Company-provided retirement benefits
that Executive will not receive because the Effective Date is in 1998 rather
than in December, 1997.
1.10 Legal Fees. Executive shall be entitled to reimbursement for
reasonable legal fees, and related costs, rendered to Executive in connection
with the negotiation and preparation of this Agreement up to a maximum of
$5,000.
1.11 Relocation Expenses. Executive shall be entitled to be reimbursed for
all reasonable relocation expenses in moving his principal residence from State
College, Pennsylvania to Harrisburg, Pennsylvania, including closing costs on
both homes, sales commissions, mortgage fees and points, commuting expenses
during the relocation period (not to exceed 6 months) and all other expenses
covered by the Company's relocation policy for senior level executives
generally. In addition, if Executive is unable to obtain an agreement of sale
for his current home within 90 days (and close on such sale within a reasonable
period thereafter), the Company shall purchase such home for a value determined
by an appraiser mutually selected by Executive and the Company.
2. Confidential Information. Executive recognizes and acknowledges that by
reason of his employment by and service to the Company before, during and, if
applicable, after the Employment Term, he has had and will continue to have
access to certain confidential and proprietary information relating to the
Company's business, which may include, but is not limited to, trade secrets,
trade "know-how", customer information, supplier information, cost and pricing
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that he will not, unless expressly authorized in writing by the Board,
at any time during the course of his employment use any Confidential Information
or divulge or disclose any Confidential Information to any person, firm or
corporation except in connection with the performance of his duties for the
Company and in a manner consistent with the Company's policies regarding
Confidential Information. Executive also covenants that at any time after the
termination of such employment, directly or indirectly, he will not use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation, unless such information is in the public domain
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through no fault of Executive or except when required to do so by a court of
law, by any governmental agency having supervisory authority over the business
of the Company or by any administrative or legislative body (including a
committee thereof) with apparent jurisdiction to order him to divulge, disclose
or make accessible such information in which case Executive will inform the
Company in writing promptly of such required disclosure, but in any event at
least two business days prior to disclosure. All written Confidential
Information (including, without limitation, in any computer or other electronic
format) which comes into Executive's possession during the course of his
employment shall remain the property of the Company. Except as required in the
performance of Executive's duties for the Company, or unless expressly
authorized in writing by the Board, Executive shall not remove any written
Confidential Information from the Company's premises, except in connection with
the performance of his duties for the Company and in a manner consistent with
the Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in his possession.
3. Non-Compete Obligation. Executive agrees that during the term of this
Agreement and for a period of two years after the end of the Employment Term,
Executive shall not, directly or indirectly, engage in (as principal, partner,
director, officer, agent, employee, consultant, owner, independent contractor or
otherwise, with or without compensation) or hold a financial interest in any
firm or organization engaged in the business of banking (including, but not
limited to, the providing of wholesale banking services, consumer financial
services, retail banking, trust and investment management services, electronic
payment services, secured and unsecured loan and financing services, real estate
financing services, asset and investment management and fiduciary services, cash
management services, consumer and commercial credit card services, merchant
card services, card processing services, and electronic transaction processing
services) or which otherwise is engaged in competition with the Company, or its
subsidiaries or affiliates within sixty miles of Harrisburg, Pennsylvania.
Executive shall not entice or solicit, directly or indirectly, any other
executives or key management personnel of the Company (or any subsidiary) to
work with Executive or any entity with which Executive has affiliated for a
period of two years after the end of the Employment Term. Executive shall also
not entice or solicit, directly or indirectly, any client or customer of the
Company (or any subsidiary) for any competitor or in any competitive activity
for a period of two years after the end of the Employment Term.
The foregoing restriction shall not be construed to prohibit the ownership
by Executive of not more than five percent (5%) of any class of securities of
any corporation which is engaged in any of the foregoing businesses having a
class of securities registered pursuant to the Securities Exchange Act of 1934,
provided that such ownership represents a passive investment and that neither
Executive nor any group of persons including Executive in any way, either
directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes part in its
business, other than exercising his rights as a shareholder, or seeks to do any
of the foregoing.
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4. Enforcement of Obligations Executive acknowledges that the restrictions
contained in Sections 2 and 3 are reasonable and necessary to protect the
legitimate interests of the Company, that the Company would not have entered
into this Agreement in the absence of such restrictions, and that any violation
of any provision of those Sections will result in irreparable injury to the
Company. Executive further represents and acknowledges that (i) he has been
advised by the Company to consult his own legal counsel in respect to this
Agreement; and (ii) that he has, prior to execution of this Agreement, reviewed
thoroughly this Agreement with his counsel. Executive agrees that the Company
shall be entitled to preliminary and permanent injunctive relief, without the
necessity of proving actual damages, as well as to an equitable accounting of
all earnings, profits and other benefits arising from any violations of Sections
2 and 3, which rights shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled. In the event that any of the
provisions of Sections 2 and 3 should ever be adjudicated to exceed the time,
geographic, product or service, or other limitations permitted by applicable law
in any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, product or service, or other
limitations permitted by applicable law. Executive irrevocably and
unconditionally (i) agrees that any suit, action or other legal proceeding
arising out of this Agreement in which any party is seeking in whole or in part
any form of equitable relief, including without limitation, any action commenced
by the Company for preliminary and permanent injunctive relief and other
equitable relief, may be brought in any court of competent jurisdiction in
Dauphin County, Pennsylvania; (ii) consents to the non-exclusive jurisdiction of
any court in any such suit, action or proceeding; and (iii) waives any objection
which Executive may have to the laying of venue of any such suit, action or
proceeding in any such court. Executive also irrevocably and unconditionally
consents to the service of any process, pleadings, notices or other papers in a
manner permitted by the notice provisions of Section 10.
5 Termination. The Employment Term shall terminate upon the occurrence of
any one of the following events:
5.1. Disability. The Company may terminate the Employment Term if Executive
is unable substantially to perform his duties and responsibilities hereunder to
the full extent required by the Board by reason of illness, injury or incapacity
for six consecutive months, or for more than six months in the aggregate during
any period of twelve calendar months which shall not be deemed to prejudice
Executive's rights to receive long-term disability benefit under any Company
plan; provided, however, that the Company shall continue to pay Executive his
Base Salary until the Company acts to terminate the Employment Term. In
addition, Executive shall be entitled to receive (i) any other amounts earned,
accrued or owing but not yet paid under Section 1 above and (ii) any other
benefits, including the extension of the period to exercise the stock options
described in Sections 1.8(b) and (c), in accordance with the terms of any
applicable plans and programs of the Company including the health coverage
described in Section 5.4. Otherwise, the Company shall have no further liability
or obligation to Executive for compensation under this Agreement. Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.
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5.2. Death. The Employment Term shall terminate in the event of Executive's
death. In such event, the Company shall pay to Executive's executors, legal
representatives or administrators, as applicable, an amount equal to the
installment of his Base Salary set forth in Section 1.4 hereof for the month in
which he dies. In addition, (i) Executive's estate shall be entitled to receive
any other amounts earned, accrued or owing but not yet paid under Section 1
above and (ii) any other benefits, including the extension of the period to
exercise the stock options described in Sections 1.8(b) and (c), in accordance
with the terms of any applicable plans and programs of the Company and
Executive's spouse shall be entitled to the health coverage described in Section
5.4 until she attains age 65 or eligibility for Medicare, if later. Otherwise,
the Company shall have no further liability or obligation under this Agreement
to his executors, legal representatives, administrators, heirs or assigns or any
other person claiming under or through him.
5.3. Cause. The Company may terminate the Employment Term, at any time, for
"cause" upon 30 days' written notice, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued,
Executive's right to exercise the stock options provided by Section 1.8 shall
immediately terminate, but Executive shall remain entitled to any other benefits
in accordance with the terms of any applicable plans and programs of the
Company. For purposes of this Agreement, Executive's employment may be
terminated for "cause" if (i) Executive is convicted of a felony, (ii) in the
reasonable determination of the Board, Executive has (x) committed an
intentional act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of his employment with the Company, (y) caused intentional,
wrongful damage to the property of the Company or intentionally and wrongfully
disclosed Confidential Information, or (z) engaged in gross misconduct or gross
negligence in the course of his employment with the Company, (iii) Executive
materially breached his obligations under this Agreement and shall not have
remedied such breach within 30 days after receiving written notice from the
Board specifying the details thereof, or (iv) the Company receives a final
directive or order of any governmental body, agency or entity having
jurisdiction over the Company (or any subsidiary) requiring the termination or
removal of Executive; provided, however, that in any case under clause (i) or
(ii), the act or failure to act by Executive is materially harmful to the
business of the Company; and, provided, further, that in the case of a
termination or removal under clause (iv) the Company shall use its best efforts
to appeal and overturn the final directive or order and, if successful, shall
reinstate Executive to the same extent as if there had been no such termination
or removal. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was not due primarily to an
error in judgment or negligence and was done by Executive not in good faith and
without reasonable belief that the act or omission was in the best interest of
the Company.
5.4. Termination or Non-Renewal Without Cause. The Company may remove
Executive, at any time without cause from the position in which he is employed
hereunder, or give Executive notice that it does not intend to renew the
Agreement, (in either case the Employment Term shall be deemed to have ended)
upon not less than 60 days' prior written notice to Executive; provided,
however, that, in the event that such notice is given, Executive shall be under
no obligation to render any additional services to the Company and subject to
the provisions of Sections 2 and 3, shall be allowed to seek other employment.
Upon any such
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removal or non-renewal and assuming Executive executes (and does not revoke) a
mutual release in favor of the Company and Executive in the form attached hereto
as Exhibit B, Executive shall be entitled to receive a single lump sum payment
within 30 days equal to the sum of (i) his annual Base Salary for the balance of
the Employment Term and (ii) his annual short term incentive otherwise payable
under Section 1.7 at the "target" level established under the Company's Annual
Incentive Plan for the full year of the removal or non-renewal, in lieu of any
amount due to Executive under the Company's then current severance pay plan for
employees. No other payments or benefits shall be due under this Agreement to
Executive, but Executive shall be entitled to any other benefits in accordance
with the terms of any applicable plans and programs of the Company and all
options to purchase shares of stock of the Company and all restrictions on
shares of stock of the Company previously granted to Executive shall become
fully vested and not subject to any further conditions and such options shall be
exercisable as provided in Section 1.8. In addition, Executive and his spouse
and dependents shall be eligible, at the Company's expense, for health coverage
under the Company's medical plan, as in effect from time to time, until
Executive and his spouse, as applicable, attain age 65 or eligibility for
Medicare, if later; provided, however, that in the event continued coverage for
Executive and his spouse and dependents under the health plan would result in an
adverse tax consequence to the Company or other executives of the Company, the
Company shall permit Executive to purchase comparable coverage under such plan.
In that event, the Company shall annually also provide Executive (or his spouse
in the event surviving at Executive's death), until the health coverage ceases,
with an annual bonus (payable on or before January 31 of each year during which
the health coverage is provided) equal to the amount of premium that would be
required under such plan for Executive to purchase such coverage for himself,
his spouse and his dependents, if any, and a tax equivalency payment (assuming
Executive is in the maximum Federal, state and local income tax brackets) such
that Executive receives enough funds on an after tax basis to be able to pay
such premiums.
5.5. Voluntary Termination. Executive may voluntarily terminate the
Employment Term upon 60 days' prior written notice for any reason. In such
event, no further payments shall be due under this Agreement except that
Executive shall be entitled to any benefits due in accordance with the terms of
any applicable plan and programs of the Company, including the health coverage
described in Section 5.4. A Voluntary Termination under this Section 5.5 shall
not be deemed a breach of this Agreement.
6. Payments Upon a Change in Control
6.1. Definitions. For all purposes of this Section 6, the following terms
shall have the meanings specified in this Section 6.1 unless the context
otherwise clearly requires:
(a) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean is the total cash remuneration received
by Executive in all capacities with the Company, and its Affiliates, including
current annualized
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base salary and all short-term annual incentives at the target level, as
reported (or would be reported) for Federal income tax purposes on Form W-2,
together with any and all salary deferrals under any of the Company's benefit
plans or programs, for the most recent full calendar year immediately preceding
the calendar year in which occurs a Change of Control, or the calendar year in
which occurs a Change of Control, whichever is higher.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Section 13(d)(3) of the Exchange Act.
(d) "Change of Control" shall be deemed to have taken place if (i) a plan of
reorganization, merger, merger conversion, consolidation of sale of all or
substantially all of the assets of the Company or its banking subsidiary (the
"Bank") or a similar transaction occurs in which the Company or the Bank is not
the resulting entity; (ii) individuals who constitute the board of directors of
the Bank or the Board on the Effective Date cease for any reason to constitute a
majority thereof; or (iii) a change in control within the meaning of 12 C.F.R.
ss.303.4(a) or 12 C.F.R. ss.225.41(b) occurs as determined by the board of
directors of the Bank or the Board. In the event the Company converts from the
mutual form of organization to the stock form of organization at any time
subsequent to the Effective Date ("Stock Holding Company"), a "Change of
Control" of the Bank or the Stock Holding Company for the 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 Effective Date, pursuant to Section 13 or 15(d) of the Exchange Act; or
(ii) results in a change in control of the 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. ss.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. ss.225.41(b) with
respect to the Stock Holding Company, as in effect on the Effective Date; (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. ss.225.11, as in effect on the Effective Date; or (iv) without
limitation such a Change of Control shall be deemed to have occurred at such
time as (a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Bank or the Stock Holding Company representing
20% or more of the Bank's or the Stock Holding Company's outstanding securities
except for any securities of the Bank purchased by the Stock Holding 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 Effective Date (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the Effective Date 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
Holding Company's stockholders was approved by the same Nominating Committee
serving under the Incumbent Board; or (c) a plan of reorganization, merger,
consolidation, sale of all or substantially all of the assets of the Bank or the
Stock Holding Company or similar transaction occurs in which the Bank or the
Stock Holding Company is not the resulting entity; or (d) a proxy statement
shall be distributed soliciting proxies from stockholders of the Stock Holding
Company, by someone other than the current management of the Stock Holding
Company, seeking stockholder approval of a plan of
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reorganization, merger or consolidation of the Stock Holding 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 Holding Company; or (e) a tender offer is
made for 20% or more of the voting securities of the Bank or Stock Holding
Company then outstanding.
(e) "Person" shall have the meaning ascribed to such term in Section 13(d)
and 14(d) of the Exchange Act.
(f) "Termination Date" shall mean the date of receipt of the Notice of
Termination described in Section 6.2 or any later date specified therein, as the
case may be.
(g) "Termination of Employment" shall mean the termination of Executive's
actual employment relationship with the Company.
(h) "Termination following a Change of Control" shall mean a Termination of
Employment within two years after a Change of Control either:
(A) initiated by the Company for any reason other than (a) Executive's
continuous illness, injury or incapacity for a period of twelve consecutive
months or (b) for "cause," as defined in Section 5.3 hereof; or
(B) initiated by Executive upon one or more of the following occurrences:
(1) any failure of the Company to comply with and satisfy any of the
terms of this Agreement;
(2) any change resulting in a reduction by the Company of the
authority, duties or responsibilities of Executive;
(3) any reduction by the Company of Executive's compensation level or
removal from the officer positions which Executive holds as of the
Effective Date hereof except in connection with promotions to higher
office;
(4) the requirement that Executive undertake business travel (or
commuting in excess of fifty miles each way) to an extent
substantially greater than is reasonable and customary for the
position Executive holds; or
(5) after six months following the Change of Control only, Executive
determines, in his sole discretion, that circumstances have so
changed with respect to the Company that he no longer wishes to
continue in employment.
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6.2. Notice of Termination. Any Termination following a Change of Control
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon and (ii) if the Termination
Date is other than the date of receipt of such notice, specifies the Termination
Date (which date shall not be more than 15 days after the giving of such
notice).
6.3. Severance Compensation upon Termination. Subject to the provisions of
Section 6.7, in the event of Executive's Termination following a Change of
Control or in the event that Executive is terminated under Section 5.4 within
the six- month period immediately preceding a Change of Control (in which case
any payments made pursuant to Section 5.4 shall reduce the amount due under this
Section), the Company shall pay to Executive, within fifteen days after the
Termination Date (or as soon as possible thereafter in the event that the
procedures set forth in Section 6.7 hereof cannot be completed within 15 days),
an amount in cash equal to 2.99 times Executive's Base Compensation.
6.4. Other Payments. Stock Options and Stock. The payment due under Section
6.3 hereof shall be in addition to and not in lieu of any payments or benefits
due to Executive under any other plan, policy or program of the Company (and
Executive's bonus under the Company's Annual Incentive Plan shall be paid at the
target level for the fiscal year in which the Change of Control occurs), all of
which shall be paid within 15 days after the Change of Control (or as soon as
possible thereafter in the event that the procedures set forth in Section 6.7
cannot be completed within 15 days), including the health coverage described in
Section 5.4, except that no payments shall be due to Executive under the
Company's then severance pay plan for employees, if any, and all options to
purchase shares of stock of the Company and all restrictions on shares of stock
of the Company previously granted to Executive shall become fully vested and not
subject to any further conditions and such options shall be exercisable as
provided in Section 1.8.
6.5. Establishment of Trust. The Company shall establish an irrevocable
trust fund (the "Trust Fund") pursuant to a trust agreement to hold assets
contributed to satisfy its obligations hereunder. Funding of such trust fund
shall be subject to the Company's discretion, as set forth in the agreement
pursuant to which the fund will be established. Notwithstanding the foregoing:
(i) Upon a Change of Control of the Company, the Chief Financial Officer of
the Company, or his authorized representative (hereinafter referred to
collectively as the "Treasurer"), shall immediately remit to the Trustee of
the Trust Fund as a contribution to the applicable trust established as part
of the Trust Fund for the benefit of Executive the amount due under this
Agreement and not yet contributed to the Trustee as well as an amount
estimated to be sufficient to pay ail fees and expenses that may thereafter
become due. The Trustee shall be under no duty to determine the sufficiency,
or to enforce the making, of such contributions.
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(ii) In the event that the Chairman of the Board determines that a Change of
Control of the Company is imminent, the Treasurer shall make the payments to
the Trustee specified in (i). If a Change of Control of the Company shall
not have occurred within ninety (90) days of the contributions made pursuant
to this Section 6.5 and the Board adopts a resolution to the effect that,
for purposes of this Agreement, a Change of Control of the Company is not
imminent, any amounts added to the Trust Fund pursuant to this Section,
together with any earnings thereon, shall be paid by the Trustee to the
Company.
6.6. Enforcement.
(a) In the event that the Company shall fail or refuse to make payment of
any amounts due Executive under Sections 6.3 and 6.4 within the respective time
periods provided therein, the Company shall pay to Executive, in addition to the
payment of any other sums provided in this Agreement, interest, compounded
semi-annually, on any amount remaining unpaid from the date payment is required
under Section 6.3 and 6.4, as appropriate, until paid to Executive, at the rate
from time to time announced by PNC Bank as its "prime rate" plus 2%, each
change in such rate to take effect on the effective date of the change in such
prime rate.
(b) It is the intent of the parties that Executive not be required to incur
any expenses associated with the enforcement of his rights under this Section 6
by arbitration, litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
Executive hereunder. Accordingly, the Company shall pay Executive on demand the
amount necessary to reimburse Executive in full for all expenses (including all
attorneys' fees and legal expenses) incurred by Executive in enforcing any of
the obligations of the Company under this Agreement.
6.7. Certain Reductions in Payments.
(a) If the aggregate payments or benefits to be made or afforded to
Executive pursuant to this Agreement (and any other plans, programs and
arrangements maintained by the Company) (the "Termination Benefits") would
constitute "excess parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor thereto,
and 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 times Executive's "base amount," (determined in accordance with Code
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 Executive thereon by Code Section 4999, then the
Termination Benefits shall be reduced to the Non-Triggering Amount. The
allocation of the reduction required hereby among the Termination Benefits shall
be determined by Executive.
(b) All determinations to be made under this Section 6.7 shall be made by
the Company's independent public accountant immediately prior to the Change of
Control (the
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"Accounting Firm"), which firm shall provide its determinations and any
supporting calculations both to the Company and Executive within 10 days of the
Termination Date. Any such determination by the Accounting Firm shall be binding
upon the Company and Executive. Within five days after the Accounting Firm's
determination, the Company shall pay (or cause to be paid) or distribute (or
cause to be distributed) to or for the benefit of Executive such amounts as are
then due to Executive under this Agreement.
(c) In the event that upon any audit by the Internal Revenue Service, or by
a state or local taxing authority, of the Termination Payment, a change is
finally determined to be required in the amount of taxes paid by Executive,
appropriate adjustments shall be made under this Agreement such that the net
amount which is payable to Executive after taking into account the provisions of
Section 4999 of the Code shall reflect the intent of the parties as expressed in
subsection (a) above, in the manner determined by the Accounting Firm.
(d) All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company.
7. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of Executive's employment to the extent
necessary to the intended preservation of such rights and obligations and shall
be binding on all successors and assigns to the Company which shall obtain the
affirmation of any successor or assign prior to the assignment.
8. Mitigation. Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or
otherwise and there shall be no offset against amounts due Executive under this
Agreement on account of any remuneration attributable to any subsequent
employment that he may obtain.
9. Arbitration; Expenses. In the event of any dispute under the provisions
of this Agreement other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in Harrisburg,
Pennsylvania in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be selected by the
Company and Executive, respectively, and the third of whom shall be selected by
the other two arbitrators. Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct
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of the arbitration (including reasonable attorneys' fees and expenses).
Otherwise, each party shall be responsible for his or its own expenses relating
to the conduct of the arbitration (including reasonable attorneys' fees and
expenses) and shall share the fees of the American Arbitration Association.
10. Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
Xxxxxx Financial MHC
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chairman, Compensation Committee
With a required copy to:
Xxxxx X. Xxxxxx, Esquire
XxXxxx, Xxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to Executive, to:
Xxxxxxx X. Xxxxxxx, Xx.
000 Xxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
With a required copy to:
Xxxxxx X. Xxxxxxxxxxxx, Esquire
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
or to such other names or addresses as the Company or Executive, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section.
11. Contents of Agreement; Amendment and Assignment.
(a) This Agreement sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or
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terminated except upon written amendment approved by the Board and executed on
its behalf by a duly authorized officer and by Executive.
(b) All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive
hereunder are of a personal nature and shall not be assignable or delegatable in
whole or in part by Executive. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business or assets of the Company,
by agreement in form and substance satisfactory to Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the extent
the Company would be required to perform if no such succession had taken place.
12. Severability. If any provision of this Agreement or application thereof
to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
13. Remedies Cumulative; No Waiver. No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity. No delay or
omission by a party in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by such party from time to time and
as often as may be deemed expedient or necessary by such party in its sole
discretion.
14. Beneficiaries/References. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death by giving the Company written notice thereof. In the event of
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
15. Miscellaneous. All section headings used in this Agreement are for
convenience only. This Agreement may be executed in counterparts, each of which
is an original. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.
16. Withholding. The Company may withhold from any payments under this
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation. Executive shall
bear all expense of, and be solely
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responsible for, all federal, state and local taxes due with respect to any
payment received hereunder.
17. Governing Law. This Agreement shall be governed by and interpreted under
the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.
18. Corporate Authority. The Company hereby represents that it has taken all
required corporate action in accordance with the provisions of its bylaw and
certificate of incorporation to enter into and to carry out the terms of this
Agreement.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
XXXXXX FINANCIAL MHC
/s/ Xxxxxxx X. Xxxxxxx, Xx. By:/s/ Xxxxxx X. Xxxxxxx
---------------------------- -----------------------------
Xxxxxxx X. Xxxxxxx, Xx. Name: Xxxxxx X. Xxxxxxx
Title: Chairman of Board
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EXHIBIT A
ADJUSTMENT TO NONQUALIFIED STOCK OPTION
I. The nonqualified stock option referenced in Section 1.8(b) shall be
adjusted, if at all, based upon the movement of the average of the stock prices
of the companies which compose the Xxxx, Xxxx & Co. Mutual Holding Company Index
(the "MHC Index") compared to the average of the stock prices of the companies
which compose the S&P 500 Index (the "Market Index"). On the Effective Date, the
positions of each index shall be established (the "Initial Positions"). The
positions of each index (the "Adjusted Positions") shall be examined on each of
the first five anniversary dates of the Effective Date (the "Anniversary
Dates"). Except as described below, if, on any Anniversary Date, the Adjusted
Position of the MHC Index is lower than the Initial Position of the MHC Index by
twenty percent (20%) or more, an examination of the Market Index will be
required. If, after examining the Adjusted Position of the Market Index on the
Anniversary Date compared to the Initial Position of the Market Index, the
reduction in the MHC Index relative to the movement of the Market Index remains
at twenty percent (20%) or more, an adjustment shall be made to the nonqualified
stock option.
Examinations of MHC Index and the Market Index shall be made only on
Anniversary Dates (or, if an Anniversary Date does not fall on a business day,
the next business day immediately following the Anniversary Date). Movements in
the indices which occur during the one-year periods between Anniversary Dates
shall not require an adjustment to the nonqualified option unless the twenty
percent (20%) threshold was met on an Anniversary Date. If the positions of the
indices on an Anniversary Date necessitate an adjustment to the nonqualified
stock option as described herein, the positions of the indices on that
Anniversary Date shall represent the benchmarks with respect to which any
subsequent movements in the indices shall be measured. No adjustments shall be
made to the nonqualified stock option at any time following the fifth
Anniversary Date (except as may be required by the measurements on the fifth
Anniversary Date).
The following example is illustrative of the operation of this adjustment
methodology:
Assume that on the Effective Date, the MHC Index Initial Position is
100. Assume that on the first Anniversary Date, the MHC Index Adjusted
Position is 80, thereby representing a decline of twenty percent (20%)
in the index. If the Market Index has remained constant or has risen,
an adjustment shall be made to the nonqualified stock option. If,
however, the Market Index has also declined to any extent, no
adjustment to the nonqualified stock option shall be required. If an
adjustment to the nonqualified stock option is required, the positions
of the indices on the Anniversary Date shall be established as the new
benchmarks with respect to which any subsequent movements of the
indices shall be measured. (i.e., the positions of the indices on the
Anniversary Date shall be substituted for the Initial Positions).
II. In the event that an adjustment is required pursuant to the methodology
described above, the original nonqualified stock option shall be canceled and a
new option (the "New Option") shall be issued to Executive representing the
number of shares still available under the option (i.e., the New
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Option shall not include the number of shares represented by any previous
exercise of the original stock option). The New Option will be (and will become)
vested in accordance with the terms of the original nonqualified stock option.
The New Option will be issued on the Anniversary Date with respect to which the
measurements necessitating the adjustment were taken. The exercise price of the
New Option will be equal to the fair market value of the closing price of the
Company Stock on the NASDAQ National Market on the Anniversary Date.
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EXHIBIT B
CONFIDENTIAL SEPARATION AGREEMENT
AND GENERAL RELEASE
THIS AGREEMENT, made and entered into on this _____ day of____________,
____, by and between Xxxxxx Financial MHC, a Pennsylvania corporation (the
"Company"), with its principal office in Harrisburg, Pennsylvania, and Xxxxxxx
X. Xxxxxxx, Xx., a resident of State College, Pennsylvania ("Executive").
WITNESSETH:
WHEREAS, the Company had heretofore employed Executive under an
Employment Agreement originally entered into as of __________, 1997 (the
"Employment Agreement"); and
WHEREAS, Executive has terminated employment and the Employment
Agreement has been terminated as of ___________,_______ [INSERT REASON IF
APPROPRIATE!!!]; and
WHEREAS, the Company and Executive wish to enter into an agreement to
provide for a mutual release as to any claims including, without limitation,
claims that might be asserted by Executive under the Employment Agreement and
the Age Discrimination in Employment Act, as further described herein, and
reaffirm Executive's right to idemnification for actions taken within the scope
of his employment;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. The Company and Executive hereby agree that Executive's termination
of employment shall be effective on ___________, ____ and that the Employment
Agreement, except as otherwise provided therein as to obligations that continue
beyond its term, shall terminate on that date.
2. Notwithstanding Executive's termination of employment and the
termination of the Employment Agreement, in consideration of the release
provided by Executive under paragraph 6 below, the Company shall pay or cause to
be paid or provided to Executive, subject to applicable employment and income
tax withholdings and deductions, all amounts and benefits required under Section
5.4 of the Employment Agreement.
3. Executive agrees and acknowledges that the Company, on a timely
basis, has paid, or agreed to pay, to Executive all other amounts due and owing
based on his prior services in accordance with the terms of the Employment
Agreement and that the Company has no obligation, contractual or otherwise to
Executive, except as provided herein, nor does it have any obligation to hire,
rehire or re-employ Executive in the future.
-19-
4. Executive agrees and reaffirms that Section 2 of the Employment
Agreement, as to Confidential Information shall continue to apply
notwithstanding the termination of Executive's employment and the termination of
the Employment Agreement, and that the Company shall be entitled to all remedies
available under Section 4 of the Employment Agreement in enforcing its rights
hereunder as well as under Section 2 of the Employment Agreement.
5. Executive further agrees and reaffirms that Section 3 of the
Employment Agreement, as to Non-Competition, shall continue to apply
notwithstanding the termination of Executive's employment and the termination of
the Employment Agreement, and that the Company shall be entitled to all remedies
available under Section 4 of the Employment Agreement in enforcing its rights
hereunder as well as under Section 3 of the Employment Agreement.
6. In full and complete settlement of any claims that Executive may
have against the Company, including any possible violations of the Age
Discrimination in Employment Act, 29 U.S.C. ss.621 et seq., ("ADEA") in
connection with his termination of employment, and for and in consideration of
the undertakings of the Company described herein, Executive does hereby REMISE,
RELEASE, AND FOREVER DISCHARGE the Company, and each of its subsidiaries and
affiliates, their officers, directors, shareholders, partners, employees and
agents, and their respective successors and assigns, heirs, executors and
administrators (hereinafter all included within the term "the Company"), of and
from any and all manner of actions and causes of actions, suits, debts, claims
and demands whatsoever in law or in equity, which he ever had, now has, or
hereafter may have, or which Executive's heirs, executors or administrators
hereafter may have, by reason of any matter, cause or thing whatsoever from the
beginning of Executive's employment to the date of this Agreement; and
particularly, but without limitation of the foregoing general terms, any claims
arising from or relating in any way to Executive's employment relationship or
the Employment Agreement and his termination from that employment relationship
and the termination of the Employment Agreement, including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under ADEA, Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. ss.2000e et seq. ("Title VII"), the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), the Rehabilitation Act of 1973, the Americans
with Disabilities Act, the Family and Medical Leave Act, Section 11(c) of the
Occupational Safety and Health Act, and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
nothing herein shall preclude Executive from joining the Company, and the
Company shall defend Executive, in any action brought against and for which he
would have been indemnified pursuant to the bylaws of the Company as of the date
hereof, unless later limited in accordance with applicable law, or under
applicable law, (in which case he shall notify the Company within five business
days after receiving service of process as to the commencement of the action and
give the Company the right to control the defense of any such action).
Notwithstanding the foregoing, nothing contained herein shall prevent Executive
from requiring the Company to fulfill its obligations hereunder, under the
Employment Agreement or under any employee benefit plan, as defined in Section
3(3) of ERISA, maintained by the Company and in which Executive participated.
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7. Executive further agrees and covenants that neither he, nor any
person, organization or other entity on his behalf, will file, charge, claim,
xxx or cause or permit to be filed, charged, or claimed, any action for personal
equitable or monetary or other similar relief against the Company, involving any
matter occurring at any time in the past up to and including the date of this
Agreement, or involving any continuing effects of any actions or practices which
may have arisen or occurred prior to the date of this Agreement, including any
charge of discrimination under ADEA, Title VII, the Workers' Compensation Act or
state or local laws. In the event that Executive breaches his undertakings under
this Agreement, then the Company will be relieved of all further obligations
owed hereunder and he will forfeit all monies paid to him and the value of the
benefits due under Section 5.4 of the Employment Agreement.
8. In full and complete settlement of any claims that the Company may
have against Executive, other than the fulfillment of Executive's obligations
hereunder or his remaining obligations under the Employment Agreement as
provided in Sections 4 and 5 above, and for and in consideration of the
undertakings of Executive described herein, the Company does hereby REMISE,
RELEASE, AND FOREVER DISCHARGE Executive and his heirs, executors and
administrators (hereinafter all included within the term "Executive"), of and
from any and all manner of actions and causes of actions, suits, debts, claims
and demands whatsoever in law or in equity, which the Company ever had, now has,
or hereafter may have, by reason of any matter, cause or thing whatsoever within
the scope of Executive's employment by the Company from the beginning of
Executive's employment with the Company to the date of this Agreement; and
particularly, but without limitation of the foregoing general terms, any claims
arising from or relating in any way to actions taken by Executive within the
scope of his employment relationship or pursuant to the Employment Agreement and
the termination of that employment relationship with the Company and of the
Employment Agreement.
9. The Company further agrees and covenants that neither it, nor any
person, organization or other entity on its behalf, will file, charge, claim,
xxx or cause or permit to be filed, charged, or claimed, any action for damages,
including injunctive, declaratory, monetary or other relief against Executive,
involving any matter occurring at any time in the past up to the date of this
Agreement, or involving any continuing effects of any actions or practices which
may have arisen or occurred prior to the date of this Agreement so long as
Executive meets all of his obligations under this Agreement and the Employment
Agreement. In the event that the Company breaches its undertakings under this
Agreement, then Executive will be relieved of all further obligations owed
hereunder.
10. Executive hereby agrees and acknowledges that under this Agreement,
the Company has agreed to provide him with compensation and benefits that are in
addition to any amounts to which he otherwise would have been entitled under the
Employment Agreement or otherwise in the absence of this Agreement, and that
such additional compensation is sufficient to support the covenants and
agreements by Executive herein.
-21-
11. Executive further agrees and acknowledges that the undertakings of
the Company as provided in this Agreement are made to provide an amicable
conclusion of Executive's employment by the Company and, further, that Executive
will not require the Company to publicize anything to the contrary. Executive
and the Company, its officers and directors, will not, disparage the name,
business reputation or business practices of the other. In addition, by signing
this Agreement, Executive agrees not to pursue any internal grievance with the
Company.
12. Executive hereby certifies that he has read the terms of this
Agreement, that he has been advised by the Company to consult with an attorney
and that he understands its terms and effects. Executive acknowledges, further,
that he is executing this Agreement of his own volition, without any threat,
duress or coercion and with a full understanding of its terms and effects and
with the intention, as expressed in Section 6 hereof, of releasing all claims
recited herein in exchange for the consideration described herein, which he
acknowledges is adequate and satisfactory to him provided the Company meets all
of its obligations under this Agreement. The Company has made no representations
to Executive concerning the terms or effects of this Agreement other than
those contained in this Agreement.
13. Executive hereby acknowledges that he was presented with this
Agreement on _________, ______, and that he was informed that he had the right
to consider this Agreement and the release contained herein for a period of
twenty-one (21) days prior to execution. Executive also understands that he has
the right to revoke this Agreement for a period of seven (7) days following
execution, by giving written notice to the Company at 000 X. Xxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000, Attention: Chairman, Compensation Committee, in which
event the provisions of this Agreement shall be null and void, and the parties
shall have the rights, duties, obligations and remedies afforded by applicable
law.
14. Executive and the Company agree that if any part of this Agreement
is determined to be invalid, illegal or otherwise unenforceable, the remaining
provisions of this Agreement shall not be affected and will remain in full force
and effect.
15. Executive agrees that he will not in any way communicate the terms
of this Agreement to any person other than his immediate family, attorney or
financial advisor unless compelled by law or administrative proceeding to do so.
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16. This Agreement shall be interpreted and enforced under the laws of
the commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
ATTEST: XXXXXX FINANCIAL MHC
__________________________ By:_______________________
Secretary
__________________________ __________________________
Witness XXXXXXX X. XXXXXXX, XX.
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