EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of the 1st day of April, 1997, by and
between COMMUNITY BANK, a federally chartered savings bank, (the "Corporation"),
and XXXXXX X. XXXXXXX(the "Executive").
WITNESSETH:
WHEREAS, the Corporation is a wholly-owned subsidiary of Community
Financial Corporation, a Virginia corporation ("CFC");
WHEREAS, the Corporation desires to retain the services of Executive on the
terms and conditions set forth herein and, for purpose of effecting the same,
the Boards of Directors of the Corporation and CFC each has approved this
Employment Agreement and authorized its execution and delivery on the
Corporation's behalf to the Executive; and
WHEREAS, the Executive is presently the duly elected and acting President
and Chief Executive Officer of the Corporation and, as such, is a key executive
officer of the Corporation whose continued dedication, availability, advice and
counsel to the Corporation is deemed important to the Board of Directors of the
Corporation, the Corporation and its stockholders;
WHEREAS, the services of the Executive, his experience and knowledge of the
affairs of the Corporation, and his reputation and contacts in the industry are
valuable to the Corporation; and
WHEREAS, the Corporation wishes to attract and retain such well-qualified
executives and it is in the best interests of the Corporation and of the
Executive to secure the continued services of the Executive; and
WHEREAS, the Corporation considers the establishment and maintenance of a
sound management to be part of its overall corporate strategy and to be
essential to protecting and enhancing the best interests of the Corporation and
its stockholders; and
NOW, THEREFORE, to assure the Corporation of the Executive's continued
dedication, the availability of his advice and counsel to the Board of Directors
of the Corporation, and to induce the Executive to remain and continue in the
employ of the Corporation and for other good and valuable consideration, the
receipt and adequacy whereof each party hereby acknowledges, the Corporation and
the Executive hereby agree as follows:
1. EMPLOYMENT: The Corporation agrees to, and does hereby, employ
Executive, and Executive agrees to, and does hereby, accept such employment, for
the period beginning as of the date hereof and ending on March 31, 2000, which
period of employment may be extended or terminated only upon the terms and
conditions hereinafter set forth.
2. ANNUAL REVIEWS-EXTENTIONS OF TERM:
The Corporation's fiscal year begins on April 1 and ends on March 31.
Within thirty days after the end of each fiscal year, beginning with the year
that ends March 31, 1997, the Board of Directors of the Corporation shall review
the Executive's performance for the immediately preceding fiscal year. After
each such review, this Agreement may be extended for successive terms of twelve
(12) months each by an appropriate written instrument executed by the Executive
and on behalf of the Corporation. Any decision by the Corporation to extend this
Agreement shall not bind the Corporation unless such decision is reviewed and
approved by the Board of Directors of the Corporation. If this Agreement is not
extended in writing before the end of its term (as such term may have been
extended) nor expressly terminated, it shall automatically terminate at the end
of its term (as such term may have been extended).
3. EXECUTIVE DUTIES: Executive agrees that, during the term of his
employment under this Agreement and in his capacity as President and Chief
Executive Officer, he will devote his full business time and energy to the
business, affairs and interests of the Corporation and serve it diligently and
to the best of his ability. The services and duties to be performed by Executive
shall be those appropriate to his office and title as currently and from time to
time hereafter specified in the Corporation's By-laws or otherwise specified by
its Board of Directors.
4. COMPENSATION: The Corporation agrees to pay Executive, and Executive
agrees to accept, as compensation for all services rendered by him to the
Corporation during the period of his employment under this Agreement, base
salary at the annual rate of One Hundred Fifteen Thousand Dollars ($115,000.00),
which shall be payable in monthly, semi-monthly or bi-weekly installments in
conformity with Corporation's policy relating to salaried employees. Such salary
may be increased in the sole and absolute discretion of the Corporation's Board
of Directors or Committee thereof duly authorized by the Board to so act. The
Board of Directors, in its discretion, may cause the Corporation
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to pay bonuses to the Executive from time to time.
5. PARTICIPATION IN BENEFIT PLANS, REIMBURSEMENT OF BUSINESS EXPENSES AND
OTHER BENEFITS: (i) During the term of employment under this Agreement,
Executive shall be entitled to participate in any pension, group insurance,
hospitalization, deferred compensation or other benefit, bonus or incentive
plans of the Corporation and CFC presently in effect (including, without
limitation, CFC's stock option plans) or hereafter adopted by the Corporation or
CFC and generally available to any employees of senior executive status, and,
additionally, Executive shall be entitled to have the use of Corporation's
facilities and executive benefits as are customarily made available by the
Corporation to its executive officers.
(ii) During the term of this Agreement, to the extent that such
expenditures are substantiated by the Executive as required by the Internal
Revenue Service and policies of the Corporation, the Corporation shall reimburse
the Executive promptly for all expenditures (including travel, entertainment,
parking, business meetings, and the monthly costs, including dues, of
maintaining memberships at appropriate clubs) made in accordance with rules and
policies established from time to time by the Board of Directors of the
Corporation in pursuance and furtherance of the Corporation's business and good
will.
(iii) The Corporation shall provide an automobile for the Executive's
personal and business use (for which Executive will pay $100.00 per month) and
pay the Executive's dues for membership at the Staunton Country Club.
6. ILLNESS: In the event Executive is unable to perform his duties under
this Agreement on a full-time basis for a period of six (6) consecutive months
by reason of illness or other physical or mental disability, and at or before
the end of such period he does not return to work on a full-time basis, the
Corporation may terminate this Agreement without further or additional
compensation payment being due the Executive from the Corporation pursuant to
this Agreement, except benefits accrued through the date of such termination
under employee benefit plans of the Corporation. These benefits shall include
long-term disability and other insurance or other benefits then regularly
provided by the Corporation to disabled employees, as well as any other
insurance benefits so provided.
7. DEATH: In the event of Executive's death during the
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term of this Agreement, this Agreement shall terminate as of the end of the
month in which Executive dies. This Section 7 shall not affect the rights of any
person under other contract between the Executive and either the Corporation or
CFC or under any life insurance policy.
8. TERMINATION WITHOUT CAUSE/RESIGNATION FOR GOOD REASON:
(a) Notwithstanding the provisions of Section 1 hereof, the Board of
Directors of the Corporation may, without Cause (as hereafter defined),
terminate the Executive's employment under this Agreement at any time in any
lawful manner by giving not less than thirty (30) days written notice to the
Executive. The Executive may resign for Good Reason (as hereafter defined) at
any time by giving not less than thirty (30) days written notice to the
Corporation. If the Corporation terminates the Executive's employment without
Cause or the Executive resigns for Good Reason, then in either event:
(i) The Executive shall be paid for the remainder of the then current
term of this Agreement, at such times as payment was theretofore made, the
salary required under Section 4 that the Executive would have been entitled
to receive during the remainder of the then current term of this Agreement
had such termination not occurred; and
(ii) The Corporation shall maintain in full force and effect for the
continued benefit of the Executive for the remainder of the then current
term of this Agreement, all employee benefit plans and programs or
arrangements in which the Executive was entitled to participate immediately
prior to such termination, provided that continued participation is
possible under the general terms and provisions of such plans and programs.
In the event that Executive's participation in any such plan or program is
barred, the Corporation shall arrange to provide the Executive with
benefits substantially similar to those which the Executive was entitled to
receive under such plans and program.
(b) For purposes of this Agreement, "Good Reason" shall mean:
(i) The assignment of duties to the Executive by the Corporation which
(A) are materially different from the Executive's duties on the date
hereof, or (B) result in the Executive having significantly less authority
and/or responsibility than he has on the date hereof, without his
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express written consent;
(ii) The removal of the Executive from or any failure to re-elect him
to the position of President and Chief Executive Officer of the
Corporation, except in connection with a termination of his employment by
the Corporation for Cause or by reason of the Executive's disability;
(iii) A reduction by the Corporation of the Executive's base salary to
less than One Hundred Fifteen Thousand Dollars ($115,000.00) per year;
(iv) The failure of the Corporation to provide the Executive with
substantially the same fringe benefits (including paid vacations) that were
provided to him immediately prior to the date hereof; or
(v) The failure of the Corporation to obtain the assumption of and
agreement to perform this Agreement by any successor as contemplated in
Section 11(c) hereof.
(c) Resignation by the Executive for Good Reason shall be communicated by a
written Notice of Resignation to the Corporation. A "Notice of Resignation"
shall mean a notice which shall indicate the specific provision(s) in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for a resignation for Good Reason.
(d) If within thirty (30) days after any Notice of Resignation is given the
Corporation notifies the Executive that a dispute exists concerning the
resignation for Good Reason and that it is requesting arbitration pursuant to
Section 18, the Corporation shall continue to pay the Executive his full salary
and benefits as described in Sections 4 and 5, as and when due and payable, at
least until such time as a final decision is reached by the panel of
arbitrators. If Good Reason for resignation by the Executive is ultimately
determined not to exist, then all sums paid by the Corporation to the Executive,
including but not limited to the cost to the Corporation of providing the
Executive such fringe benefits, from the date of such resignation to the date of
the resolution of such dispute shall be promptly repaid by the Executive to the
Corporation with interest at the rate charged from time to time by the
Corporation to its most substantial customers for unsecured extensions of
credit.
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A failure by the Corporation to notify the Executive that a dispute exists
concerning the resignation for Good Reason within thirty (30) days after any
Notice of Resignation is given shall constitute a final waiver by the
Corporation of its right to contest either that such resignation was for Good
Reason or its obligations to the Executive under Section 8(a) hereof.
(e) If the Executive's employment terminates after a Change of Control (as
defined in Section 10 hereof), the payments to which he is entitled pursuant to
Section 10 shall be in lieu of any payment to which he might otherwise be
entitled under the terms of Section 8(a)(i). The benefits to which the Executive
is entitled under Section 8(a)(ii) shall be payable whether or not his
employment terminates after a Change of Control.
9. RESIGNATION - TERMINATION FOR CAUSE - REGULATORY TERMINATION:
(a) Notwithstanding the provisions of Section 1 of this Agreement, the
Board of Directors of the Corporation may, in its sole discretion, terminate the
Executive's employment for Cause. For the purposes of this Agreement, "Cause"
shall mean personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement.
No act or omission to act by the Executive in reliance upon an opinion of
counsel to the Corporation shall be deemed to be willful.
(b) Termination of the Executive's employment by the Corporation for Cause
pursuant to Section 9(a) shall be communicated by written Notice of Termination
to the Executive. A "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision(s) in this Agreement relied upon and
shall set forth with particularity the facts and circumstances claimed to
provide a basis for termination of employment for Cause under the provision so
indicated.
If within ninety (90) days after any Notice of Termination is given the
Executive notifies the Corporation that a dispute exists concerning the
termination for Cause and that he is
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requesting arbitration pursuant to Section 18, the Corporation shall continue to
pay the Executive his full salary and benefits as described in Sections 4 and 5,
as and when due and payable, at least until such time as a final decision is
reached by the panel of arbitrators. If a termination for Cause by the
Corporation is challenged by the Executive and the termination is ultimately
determined to be justified, then all sums paid by the Corporation to the
Executive pursuant to this Section 9(b), plus the cost to the Corporation of
providing the Executive such fringe benefits from the date of such termination
to the date of the resolution of such dispute, shall be promptly repaid by the
Executive to the Corporation with interest at the rate charged from time to time
by the Corporation, to its most substantial customers for unsecured lines of
credit. Should it ultimately be determined that a termination by the Corporation
pursuant Section 9(a) was not justified, then the Executive shall be entitled to
retain all sums paid to him pending the resolution of such dispute and he shall
be entitled to receive, in addition, the payments and other benefits provided
for in Section 8(a).
A failure by the Executive to notify the Corporation that a dispute exists
concerning the termination for Cause within ninety (90) days after the Notice of
Termination is given shall constitute a final waiver by the Executive of his
right to contest that such termination was for Cause.
(c) In the event that Executive resigns from or otherwise voluntarily
terminates his employment by the Corporation at any time (except a termination
for Good Reason pursuant to Section 8 hereof), or if the Corporation rightfully
terminates the Executive's employment for Cause, this Agreement shall terminate
upon the date of such resignation or termination of employment for Cause, and
(subject to Section 9(b) the Corporation thereafter shall have no obligation to
make any further payments under this Agreement, provided that the Executive
shall be entitled to receive any benefits, insured or otherwise, that he would
otherwise be eligible to receive under any benefit plans of the Corporation or
CFC or any affiliate of the Corporation or CFC.
(d) If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Corporation's affairs by a notice served
under Sections 8(e)(3) or 8(g)(1) [12 U.S.C. xx.xx. 1818(e)(3) and 1818(g)(1)]
of the Federal Deposit Insurance Act, 12 U.S.C. ss.1811 et seq. (the "Federal
Deposit
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Insurance Act"), the Corporation's obligations under this Agreement shall be
suspended as of the date of service unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, the Corporation may in its discretion
(i) pay Executive all or part of the compensation withheld while its contract
obligations were suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
If Executive is removed and/or permanently prohibited from participating in
the conduct of the Corporation's affairs by an order issued under Sections
8(e)(4)or 8(g)(1) of the Federal Deposit Insurance Act [12 U.S.C. xx.xx.
1818(e)(4) or 1818(g)(1)], all obligations of the Corporation under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
If the Corporation is in default [as default is defined in Section 3(x)(1)
of the Federal Deposit Insurance Act], all obligations under this Agreement
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.
Except to the extent it is determined that continuation of this Agreement
is necessary for the continued operation of the Corporation, all obligations
under this Agreement shall be terminated:
(i) by the Director (as Director is defined in the Federal Deposit
Insurance Act) or his or her designee, at the time the Federal Deposit
Insurance enters into an agreement to provide assistance to or on behalf of
the Corporation under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act; or
(ii) by the Director or his or her designee, at the time the Director
or his or her designee approves a supervisory merger to resolve problems
related to operation of the Corporation or when the Corporation is
determined by the Director to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not be
affected by such action.
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10. CHANGE OF CONTROL:
(a) If the Executive's employment terminates for any reason other than for
Cause during the term of this Agreement and any renewal term following a Change
of Control of CFC, on or before the Executive's last day of employment with the
Corporation (in addition to all other payments and benefits to which the
Executive is entitled under any other contract) the Corporation shall pay to the
Executive as compensation for services rendered to it a cash amount (subject to
any applicable payroll or other taxes required to be withheld) equal to 2.99
times the Executive's salary and bonus received during the twelve (12) months
ending with the termination of the Executive's employment, provided that, at the
option of the Executive, the cash amount required to be paid hereby shall be
paid by the Corporation in equal monthly installments over the thirty-six (36)
months succeeding the date of termination, payable on the first day of each such
month.
(b) For purposes of this Agreement, a Change of Control of CFC occurs in
any of the following events: (i) The acquisition by any "person" or "group" (as
defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than CFC, any subsidiary of CFC or any CFC or
subsidiary's employee benefit plan, directly or indirectly, as "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of securities of CFC
representing twenty percent (20%) or more of either the then outstanding shares
or the combined voting power of the then outstanding securities of CFC; (ii)
Either a majority of the directors of CFC elected at CFC's annual stockholders
meeting shall have been nominated for election other than by or at the direction
of the "incumbent directors" of CFC, or the "incumbent directors" shall cease to
constitute a majority of the directors of CFC. The term "incumbent director"
shall mean any director who was a director of CFC on April 1, 1997 and any
individual who becomes a director of CFC subsequent to April 1, 1997 and who is
elected or nominated by or at the direction of at least two-thirds of the then
incumbent directors; (iii) The shareholders of CFC approve (x) a merger,
consolidation or other business combination of CFC with any other "person" or
"group" (as defined in Sections 13(d) and 14(d) of the Exchange Act) or
affiliate thereof, other than a merger or consolidation that would result in the
outstanding common stock of CFC immediately prior thereto continuing to
represent either by remaining outstanding or by being converted into common
stock of the
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surviving entity or a parent or affiliate therof) at least fifty percent (50%)
of the outstanding common stock of CFC or such surviving entity or a parent or
affiliate therof outstanding immediately after such merger, consolidation or
other business combination, or (y) a plan of complete liquidation of CFC or an
agreement for the sale or disposition by CFC of all or substantially all of
CFC's assets; or (iv) Any other event or circumstance which is not covered by
the foregoing subsections but which the Board of Directors of CFC determines to
affect control of CFC and with respect to which the Board of Directors adopts a
resolution that the event or circumstance constitutes a Change of Control for
purposes of the Agreement.
The Control Change Date is the date on which an event described in (i),
(ii), (iii) or (iv) occurs.
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11. LITIGATION - OBLIGATIONS - SUCCESSORS:
(a) If litigation shall be brought or arbitration commenced to challenge,
enforce or interpret any provision of this Agreement, and such litigation or
arbitration does not end with judgment in favor of the Corporation, the
Corporation hereby agrees to indemnify the Executive for his reasonable
attorney's fees and disbursements incurred in such litigation or arbitration.
(b) The Corporation's obligation to pay the Executive the compensation and
benefits and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation may have against him or anyone else. All amounts payable by the
Corporation hereunder shall be paid without notice or demand. Except as
expressly provided in Sections 8(d) and 9(b), each and every payment made
hereunder by the Corporation shall be final and the Corporation will not seek to
recover all or any part of such payment from the Executive or from whosoever may
be entitled thereto, for any reason whatsoever. The Executive shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise; provided, if Executive secures other full
time employment after a termination without Cause or a resignation for Good
Reason (other than self employment or employment by an entity he owns or
controls), the obligations of the Corporation under Section 8(a) shall be
reduced dollar for dollar by the cash compensation received by the Executive
from such other employment. This Section 11(b) shall not be interpreted to
require or permit any reduction of benefits to which the Executive may be
entitled under Section 10.
(c) The Corporation will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Corporation, or either one of them, by
agreement in form and substance satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in its entirety. Failure of the
Corporation to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to the compensation described in Section 8(a) or Section 10, as appropriate. As
used in this Agreement, "Corporation" shall mean Community Federal Savings Bank
and any successor to its
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business and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 11(c) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
12. LIMITATION OF BENEFITS:
It is the intention of the parties that no payment be made or benefit
provided to the Executive that would constitute an ""excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the Code) and any regulations thereunder, thereby resulting in a loss
of an income tax deduction by the Corporation or the imposition of an excise tax
on Executive under Section 4999 of the Code. If the independent accountants
serving as auditors for the Corporation immediately prior to the date of a
Change of Control determine that some or all of the payments or benefits
scheduled under this Agreement, when combined with any other payments or
benefits provided to the Executive on a Change of Control by CFC, the
Corporation and any affiliate of CFC or the Corporation required to be
aggregated with CFC or the Corporation under Section 280G of the Code, would
constitute nondeductible excess parachute payments by the Corporation under
Section 280G of the Code, then the payments or benefits scheduled under this
Agreement will be reduced to one dollar less than the maximum amount which may
be paid or provided without causing any such payments or benefits scheduled
under this Agreement or otherwise provided on a Change of Control to be
nondeductible. The determination made as to the reduction of benefits or
payments required hereunder by the independent accountants shall be binding on
the parties. The Executive shall have the right to designate within a reasonable
period which payments or benefits scheduled under this Agreement will be
reduced; provided, however, that if no direction is received from the Executive,
the Corporation shall implement the reductions under this Agreement in its
discretion.
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13. NOTICES: For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Xxxxxx X. Xxxxxxx
#0 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Corporation: Community Federal Savings Bank
00 X. Xxxxxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxx, XX 00000-0000
or at such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. MODIFICATION - WAIVERS - APPLICABLE LAW: No provisions of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing, signed by the Executive and on behalf of
the Corporation by such officer as may be specifically designated by the Board
of Directors of the Corporation. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provision or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Virginia.
15. INVALIDITY - ENFORCEABILITY: The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or
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unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
16. SUCCESSOR RIGHTS: This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amounts would still be payable to him hereunder,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to his executor or, if there is no such
executor, to his estate.
17. HEADINGS: Descriptive headings contained in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any provision hereof.
18. ARBITRATION: Any dispute, controversy or claim arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators, in Staunton, Virginia in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The Corporation shall pay all administrative fees
associated with such arbitration. Judgment may be entered on the arbitrator's
award in any court having jurisdiction. Subject to Section 11(a), unless
otherwise provided in the rules of the American Arbitration Association, the
arbitrators shall, in their award, allocate between the parties the costs of
arbitration, which shall include reasonable attorneys' fees and expenses of the
parties, as well as the arbitrator's fees and expenses, in such proportions as
the arbitrators deem just.
19. CONFIDENTIALITY-NONSOLICITATION:
(a) The Executive acknowledges that the Corporation may disclose certain
confidential information to the Executive during the term of this Agreement to
enable him to perform his duties hereunder. The Executive hereby covenants and
agrees that he will not, without the prior written consent of the Corporation,
during the term of this Agreement or at any time thereafter, disclose or permit
to be disclosed to any third party by any method whatsoever any of the
confidential information of the Corporation. For purposes of this Agreement,
"confidential
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information" shall include, but not be limited to, any and all records, notes,
memoranda, data, ideas, processes, methods, techniques, systems, formulas,
patents, models, devices, programs, computer software, writings, research,
personnel information, customer information, the Corporation's financial
information, plans, or any other information of whatever nature in the
possession or control of the Corporation which has not been published or
disclosed to the general public, or which gives to the Corporation an
opportunity to obtain an advantage over competitors who do not know of or use
it. The Executive further agrees that if his employment hereunder is terminated
for any reason, he will leave with the Corporation and will not take originals
or copies of any and all records, papers, programs, computer software and
documents and all matter of whatever nature which bears secret or confidential
information of the Corporation.
The foregoing paragraph shall not be applicable if and to the extent the
Executive is required to testify in a judicial or regulatory proceeding pursuant
to an order of a judge or administrative law judge issued after the Executive
and his legal counsel urge that the aforementioned confidentiality be preserved.
The foregoing covenants will not prohibit the Executive from disclosing
confidential or other information to other employees of the Corporation or any
third parties to the extent that such disclosure is necessary to the performance
of his duties under this Agreement.
(b) Subject to Section 19(c), during the term of this Agreement and
throughout any further period that he is an officer or employee of the
Corporation, and for a period of twelve (12) months from and after the
termination of the last such position held by the Executive, or for a period of
twelve (12) months from the date of entry by a court of competent jurisdiction
of a final judgment enforcing this covenant in the event of a breach by
Executive, whichever is later, Employee covenants and agrees that he will not,
without the prior written consent of the Corporation, solicit any existing or
former customer or employee of the Corporation for any competing business
regardless of its location.
(c) If the Corporation terminates the employment of the Executive without
Cause or this Agreement terminates pursuant to Section 9(d), the covenant set
forth in Section 19(b) shall not apply.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
"EXECUTIVE"
ATTEST: ____________________ /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
COMMUNITY BANK ("CORPORATION")
ATTEST: ____________________ By:
------------------------------
AUTHORIZED OFFICER
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