EMPLOYMENT AGREEMENT
(herein "Agreement")
AGREEMENT effective January 1, 1998, by and between XXXXXX NATIONAL BANK, a
national banking corporation ("Corporation"), and XXXXXX X. XXXXXXX
("Executive").
Corporation desires to employ Executive to devote full time to the business
of the Corporation, and Executive desires to be so employed.
The parties agree as follows:
1. Employment. Corporation agrees to employ Executive, and Executive
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agrees to be so employed, in the capacity of President and Chief
Executive Officer. Employment shall be for an indefinite term
effective as of January 1, 1998.
2. Time and Efforts; Restrictive Covenant. Executive shall diligently and
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conscientiously devote his full and exclusive time and attention and
best efforts in discharging his duties as the Corporation's President
and Chief Executive Officer. Executive shall not, directly or
indirectly, alone or as a member of a partnership, or as an officer,
director, member or shareholder of any other entity, be engaged in or
concerned with any other commercial duties or pursuits whatsoever that
might conflict with the Corporation's business, or materially affect
Executive's ability to perform his duties or create an appearance of
conflict, except as may be approved in writing by the Chairman of the
Board. Provided, however, that nothing herein shall be interpreted to
preclude Executive from (i) participating as an officer or director
of, or advisor to, any charitable or other tax exempt organization or
otherwise engaging in charitable, fraternal or trade group activities,
(ii) investing his assets as a passive investor in other entities or
business ventures, provided that he performs no management or similar
role with respect to such entities or ventures, or (iii) continuing
his investment in and position as president of Five Mile Point
Development Corporation.
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3. Board of Directors. Executive shall at all times discharge his duties
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in consultation with, and under the supervision of, the Corporation's
Board of Directors. In the performance of his duties, Executive shall
make his principal office in such place as the Corporation's Board of
Directors and Executive may from time to time agree.
4. Compensation and Benefits.
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a. For the Corporation's fiscal year beginning January 1, 1998,
Corporation shall pay to Executive as compensation for his
services an annual salary of $157,600.00 subject to all rules
related to withholding. This amount shall be paid over the year
in the same manner and time intervals as other senior executives
of the Corporation are paid. In addition to the salary Executive
shall be entitled to such incentive bonuses as may from time to
time be awarded by the Board or any Committee thereof acting as a
compensation committee.
b. Later Years. During the subsequent fiscal years, Corporation
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shall pay to Executive as compensation for his services that
amount which is set by the Board or any Committee thereof acting
as a compensation committee but in no event less than the salary
established pursuant to Section 4(a) hereof.
c. Benefits. During Executive's employment the Corporation shall
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provide to Executive such benefits, including medical insurance,
vacation, sick leave, life insurance and the right to participate
in such retirement or pension plans, as are generally available
to senior executive officers and employees of the Corporation
from time to time.
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5. Expenses.
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a. Reimbursement. The Corporation shall reimburse Executive for all
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reasonable and necessary expenses incurred in carrying out his
duties under this Agreement. Executive shall promptly present to
the Corporation an itemized account of such expenses in any form
required by the Corporation.
b. Automobile. The Corporation recognizes the Executive's need for
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an automobile for business purposes. It, therefore, shall provide
the Executive with an automobile, including all related
maintenance, repairs, insurance, and other costs. The automobile
and related costs shall be comparable to those which the
Corporation presently provides the Executive.
c. Oneonta County Club Membership. The Corporation recognizes the
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Executive's need for a place to meet and entertain the community,
customers and constituencies and deems a county club membership
as the most effective way to accomplish that purpose. It
therefore shall pay the dues for Executive's membership in the
Oneonta Country Club and for Executive's expenses incurred for
business purposes and allowable under Corporation's expense
reimbursement policies.
6. Illness and Disability. In the event any injury, illness or accident
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renders Executive permanently totally disabled, Corporation's
obligations under this Agreement shall terminate immediately after the
determination of total disability subject only to obligations assumed
relative to disability.
The Corporation has in existence a bank policy whereby it supplements
a short-term disability insurance policy during 26 weeks of short-term
disability and Corporation covenants that it will continue to maintain
the same or a similar insurance policy and will maintain for Executive
the same bank policy to supplement the insurance policy.
If, during the term of this Agreement, Executive is absent from
employment because of injury, illness, or any other incapacity, for
more than 26 weeks in the aggregate in any 12 month period, the
Corporation shall not be obligated to pay him any compensation for any
period of absence that exceeds 26 weeks in any 12 month period, and
may, upon 3 days notice to Executive, terminate this Agreement. In the
event of such termination, the Corporation shall pay to Executive his
compensation as provided by the aforesaid bank policy up to the date
of termination and Executive shall not be entitled to any other
payment except as may be provided in any policy of insurance providing
for long-term disability.
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7. Termination.
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a. Notwithstanding other provisions herein, Executive serves at the
pleasure of the Board of Directors of the Corporation and the
Corporation may, without cause, terminate this Agreement at any
time by giving not less than 30 days advance written notice to
Executive. In that event, the Corporation shall pay to Executive
his compensation (including benefits) up to the date of
termination and for one (1) year thereafter. Executive shall not
be entitled to any other payment from Corporation except for
amounts of compensation previously deferred or as separately
agreed to in writing.
b. The right of Corporation to terminate Executive is not affected
or diminished by any separate Severance Compensation Agreement
Executive may have with The Xxxxxx Corporation.
c. Executive may terminate this Agreement at any time by giving not
less than 30 days notice to the Corporation. In that event, the
Corporation shall pay Executive his compensation up to the date
of termination. Executive shall not be entitled to any other
payment from Corporation except for amounts of compensation
previously deferred.
d. The Corporation may terminate Executive's employment for cause
which for the purposes of this paragraph is defined as follows:
(i) The willful and continued failure of the Executive to
substantially perform the Executive's duties with
Corporation (other than any such failure resulting from
incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to
the Executive by the Board of Corporation which specifically
identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's
duties;
(ii) The willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably
injurious to the Corporation;
(iii)Personal dishonesty or breach of fiduciary duty to
Corporation that in wither case results or was intended to
result in personal profit to the Executive at the expense of
Corporation; or
(iv) Willful violation of any law, rule or regulation (other than
traffic violations, misdemeanors, or similar offenses) or
cease-and-desist order, court order, judgment or supervisory
Agreement, which violation is materially and demonstrably
injurious to Corporation.
(v) Violation of provisions set forth in Paragraph 2.
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For purposes of the preceding clauses, no act or failure to act, on the
part of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith and without reasonable
belief that the Executive's action or omission was in the best interests of
the Corporation. Any act, or failure to act, based upon prior approval
given by the Board of Corporation or upon the instructions or with the
approval of the Executive's superior or based upon the advice of counsel
for Corporation, shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Corporation.
Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated by Corporation for cause unless and until there shall been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of
Corporation's Board of Directors at a meeting of Corporation's Board called and
held for the purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel, to be
heard before Corporation's Board), finding that in the good faith opinion of
said Board, the Executive had acted or failed to act in a manner set forth in
Section 7(d) and specifying the particulars thereof in detail.
A termination pursuant to this Section 7 is not intended to impair the
payment of benefits to which Executive is then legally entitled under any
retirement or pension plan maintained by the Corporation.
8. Notices. All notices required or permitted to be given under this
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Agreement shall be given by certified mail, return receipt requested,
to the parties at the following addresses or to such other addresses
as either may designate in writing to the other party:
If to Corporation:
Xxxxxx National Bank
000 Xxxx Xx.
Xxxxxxx, XX 00000
If to Executive:
Xxxxxx X. Xxxxxxx
000 Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
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9. Governing law. This Agreement shall be construed and enforced in
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accordance with the laws of the State of New York.
10. Entire contract. This Agreement constitutes the entire understanding
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and Agreement between the Corporation and Executive with regard to all
matters herein. There are no other agreements, conditions or
representations, oral or written, express or implied, with regard
thereto. However, the parties acknowledge that there may be a separate
Severance Compensation Agreement between Executive and The Xxxxxx
Corporation. This Agreement may be amended only in wiring, signed by
both parties.
11. Non-waiver. A delay or failure by either party to exercise a right
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under this Agreement, or a partial or single exercise of that right,
shall not constitute a waiver of that or any other right.
12. Headings. Headings in this Agreement are for convenience only and
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shall not be used to interpret or construe its provisions
13. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same Agreement.
14. Arbitration. Any controversy or claim arising out of, or relating to,
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this Agreement or its breach, shall be settled by arbitration in
accordance with the governing rules of the American Arbitration
Association to be held in Oneonta, New York, with New York law
applying. Judgment upon the award rendered may be entered in any court
of competent jurisdiction.
15. Assignment. This Agreement shall inure to the benefit of, and shall be
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binding upon, the Corporation, its successors, or assigns. This
Agreement may not be assigned by Executive.
16. Anti-Competition Covenant. In the event of termination of his
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employment by Executive pursuant to Paragraph 7(c) or by Corporation,
for cause as defined in Paragraph 7(d), Executive agrees that he will
not work for a competitor of Corporation which has an office that is
located within seventy-five (75) miles of Oneonta, New York, either
directly as an employee or indirectly as an independent contractor or
otherwise, for a period of one (1) year from the effective date of the
termination of his employment.
In witness whereof Corporation has by an appropriate officer signed
and Executive has signed this Agreement as of the above date.
XXXXXX NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Chairman
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx,
Executive
