Exhibit 10.17
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") entered into this _____ day of
_____________, 2003, by and between WAYPOINT FINANCIAL CORP., a Pennsylvania
corporation (the "Company"), with its principal office in Harrisburg,
Pennsylvania, and Xxxxx X. Xxxxx, a resident of Pennsylvania ("Executive"). Any
reference herein to the "Bank" shall refer to WAYPOINT BANK, a wholly-owned
subsidiary of the Company.
WHEREAS, Company desires to continue to employ Executive in the
capacity of President and Chief Executive Officer of the Company and the Bank;
and
WHEREAS, Executive and Company desire to evidence their agreement as to
the terms and conditions of Executive's continued employment as President and
Chief Executive Officer of the Company and the Bank.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows, replacing and superceding all prior Employment
Agreements of and between the parties:
1. Employment. The Company and Bank hereby agree 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 subject nevertheless to the specific
approval of Company's Board of Directors.
1.1 Employment Term. The term of Executive's employment under this
Agreement will begin on September 15, 2003 (the "Effective
Date") and will continue until September 15, 2006; provided,
however that on September 15 of each calendar year, the term
of this Agreement will automatically extend for an additional
year renewal unless one party notifies the other, in writing
as 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. Not withstanding the above and Section 5.4, the
parties hereto agree that unless extended by the mutual
agreement of the parties this agreement will terminate, and
the termination of Executive will be deemed retirement,
following the Company's annual meeting after Executive
achieves normal retirement age as then defined in the
Company's benefit plans.
The period commencing as of the Effective Date and ending on
the date on which the term of Executive's employment under
this Agreement terminates 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 and the
Bank during the Employment Term and shall be supported by the
Board in such positions with the powers and
authority to set and execute the strategic plans and
initiatives of the Company and the Bank subject to the Board's
supervision and approval. Executive and Company agree that
neither Company nor Bank will be in violation hereof in the
event Executive's title and responsibilities as President of
the Bank or the Company, but not as Chief Executive Officer,
is assigned to another executive in the course of implementing
a succession plan approved by Executive. The Company's Board
shall nominate Executive to continue as a member of its Board
of Directors (the "Board"). The Board shall support such
nomination. Executive agrees to serve as a director during the
Employment Term. The Board shall cause the Company to continue
to elect Executive as a director of the Bank, and Executive
agrees to serve as a director of the Bank. 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 Boards of the Company and the Bank.
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 1.3 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 capacity in which he
is currently involved other than Directorship of other
financial institutions or entities precluded by applicable
statues or regulations or from making investments in other
businesses or enterprises, provided that Executive agrees not
to engage 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. Executive and the Board specifically recognize and
agree to Executive's service as an officer of the Pennsylvania
Banker's Association and the incidental time commitments
associated with American Banker's Association commitments
related thereto as being in the best interests of the Company
and the Bank and agrees that expenses unreimbursed by those
organizations may be submitted for reimbursement by the
Company.
1.4 Base Salary. For all the services rendered by Executive
hereunder, the Company or the Bank shall pay Executive a base
salary ("Base Salary"), commencing on the Effective Date, at
the annual rate of $365,000.00, payable in installments at
such times as the Company or the Bank 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 annually during the Company's regular annual salary
review process 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.
2
1.5 Retirement and Benefit Coverage and Perquisites. During the
Employment Term, Executive shall be entitled to participate in
all (a) employee pensions 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 or the Bank's senior level executives as a group
or to its employees generally, as such Retirement Plans or
Benefits 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
not jeopardize qualification for such Retirement Plan under
the applicable labor and tax laws. Executive also shall be
entitled to a Cadillac Seville or equivalent automobile,
country club initiation fees, dues and assessments and all
other executive perquisites in accordance with the Company's
policy for its most 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 shall be entitled to vacation
(six weeks per calendar year) and holidays in accordance with
the Company's or the Bank'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 or the Bank 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.
1.8 Long-Term Incentive Compensation/Stock Options. Executive
shall also be entitled to participate in all long-term
incentive compensation programs, including but not limited to
stock option plans and stock recognition or awards plans,
established 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.
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
3
"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 any time after the termination of such employment he will
not, directly or indirectly, 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 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, provided,
however, if prior notice is not possible, then as soon
thereafter as reasonably practicable. 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 any extension thereof and for any period
during which Executive's compensation is continued after
termination, 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, insurance,
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.
4
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 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.
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
5
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 this
Agreement 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 provided
that the Company shall continue to pay the Executive his Base
Salary for one year following termination by the Company, and
provided further, that any amounts actually paid to Executive
pursuant to any disability insurance or other similar program
which the Company has provided or may provide on behalf of its
employees shall reduce the compensation to be paid to
Executive pursuant to this paragraph. 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 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(s)
selected by the Board.
5.2 Death. This Agreement 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 Executive's
Base Salary, on a monthly basis, at the rate in effect at the
time of Executive's death, for a period of one (1) year from
the date of Executive's death. 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 stock options in accordance with the terms of any
applicable plans and programs of the Company. Otherwise, the
Company shall have no further liability or obligation under
this Agreement to the executors, legal representatives,
administrators, heirs or assigns or any other person claiming
under or through Executive.
5.3 Cause. The Company may terminate this Agreement and
Executive's employment hereunder at any time for "cause", in
which event all payments under this Agreement shall cease,
except for Base Salary to the extent already accrued, and
Executive's right to exercise the stock options, and/or stock
awards provided by Section 1.8 shall immediately terminate.
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 termination for
"cause" shall include termination due to the Executive's
personal dishonesty,
6
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 breach of any material
provision of this Agreement. For purposes of this Agreement,
an act or omission on the part of Executive shall be deemed
"willful" 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. In the case of
termination or removal of the Executive by an order issued
under section 8(e)(4) of the Federal Deposit Insurance Act (12
U.S.C. 1818 (e)(4)), as amended by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, the Company, if
it deems the reinstatement of the Executive to his former
position to be in the best interest of the Company, shall use
its best efforts to appeal and overturn such order.
5.4. Termination or Non-Renewal Without Cause. The Company may
terminate Executive's employment hereunder at any time without
cause, 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. In addition, Executive shall
be entitled to voluntarily terminate employment with the
Company (and such termination shall be deemed a constructive
termination) upon one or more of the following occurrences:
(a) any failure of the Company to comply with and satisfy
any of the terms of this Agreement, including the
appointment or nomination of Executive to the officer
and director positions specified in Section 1. 2
hereof;
(b) except as described in Section 1.2 hereof any change
resulting in a reduction by the Company of the
authority, duties or responsibilities of Executive;
(c) 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; or
(d) 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.
7
Upon any such termination (whether actual or constructive) or
non-renewal pursuant to this Section 5.4, 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 A, Executive shall be entitled to receive a single
lump sum payment within 30 days (or, at Executive's
discretion, payable over 24 to 36 months) equal to three times
the sum of (i) his annual rate of Base Salary and (ii) his
annual short term incentive compensation 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 shall become fully
vested and all restrictions on shares of stock of the Company
previously granted to Executive shall lapse and shall not be
subject to any further conditions, and such options shall be
exercisable unless in the opinion of counsel such action would
disqualify the affected plan. In such case Company shall offer
Executive alternative means to permit vesting and/or
satisfaction of restrictions. In addition, Executive and his
spouse and dependents at the time of the termination, if any,
shall be eligible, subject to the cost sharing applicable to
Company employees for health coverage under a Company medical
plan or a substitute plan or arrangement providing similar
coverage at the Company's election for a minimum of three
years.
5.5 Required Provisions. If the Executive is suspended and/or
temporarily prohibited from participating in the conduct of
the bank's affairs by a notice served under section 8(e)(3) or
(g)(1) of [the] Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1)) the bank's obligations under the
contract shall be suspended as of the date of service unless
stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may in its discretion (i) pay
the 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 the Executive is removed and/or permanently prohibited from
participating in the conduct of the bank's affairs by an order
issued under section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(e)(4) and (g)(1)), all
obligations of the bank under the contract shall terminate as
of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
If the bank is in default (as defined in section 3(x)(1) of
the Federal Deposit Insurance Act), all obligations under the
contract shall terminate as of the date of default, but this
paragraph 5.5 shall not affect any vested rights of the
contracting parties.
8
All obligations under the contract shall be terminated, except
to the extent determined that continuation of the contract is
necessary [for] the continued operation of the association:
(i) by the Director or his or her designee, at the time
the Federal Deposit Insurance Corporation enters into
an agreement to provide assistance to or on behalf of
the bank 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 bank or when the bank is determined
by the Director to be in an unsafe or unsound
condition.
Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. 1828(k) and any regulations
promulgated thereunder.
5.6 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. A Voluntary Termination
under this Section 5.6 shall not be deemed a breach of this
Agreement.
6. Payments Due on a Change of 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:
(1) "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").
(2) "Base Compensation" shall mean the total cash
remuneration received by Executive in all capacities
as an employee with the Company and its Affiliates,
including current annualized base salary, Short and
Long-Term Cash Compensation Plan payments reported
(or as 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
9
which occurs a Change of Control, or the calendar year in
which occurs a Change of Control, whichever is higher.
(3) "Beneficial Owner" shall have the meaning ascribed to such
term in Section 13(d)(3) of the Exchange Act.
(4) "Change of Control" 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 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. '303.4(a) with
respect to the Bank and the Board of Governors of the Federal
Reserve System (the "FRB") at 12 C.F.R. '225.41(b) with
respect to the Company, as in effect on the Effective Date; or
(iii) 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 20%
or more of the Bank's or the Company's outstanding securities
except for any securities of the Bank purchased by the 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 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 Company or
similar transaction occurs in which the Bank or the Company is
not the resulting entity; or (d) a proxy statement shall be
distributed soliciting proxies from stockholders of the
Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the 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 Company; or (e) a tender offer
is made and completed for 20% or more of the voting securities
of the Bank or Company then outstanding.
10
(5) "Person" shall have the meaning ascribed to such term in
Sections 13(d) and 14(d) of the Exchange Act.
(6) "Termination Date" shall mean the date of receipt of Notice of
Termination as described in Section 6.2 or any later specified
therein, as the case may be.
(7) "Termination of Employment" shall mean the termination of
Executive's actual employment relationship with the Company.
(8) "Termination following a Change of Control" shall mean a
Termination of Employment within two years after a Change of
Control either:
(i) 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
(ii) 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 status of Executive's
authority, duties or responsibilities at the
time of the Change of Control;
(3) any reduction by the Company of Executive's
compensation level or removal from the
officer positions which Executive holds as
of the date of the Change of Control 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) within six months following the Change of
Control, Executive determines, in his sole
discretion, that circumstances have so
changed with respect to the
11
Company that he no longer wishes to continue in
employment.
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 With Termination. 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 either case any payments made pursuant
to Section 5.4 shall reduce the amount due under this Section and vise
versa so that the total payment shall be the greater of either but not
both), the Company shall pay to Executive, within fifteen days after the
Termination Date, 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 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. Executive shall also be entitled to health coverage
described in Section 5.4. No payments shall be due to Executive under the
Company's then severance pay plan for employees. Further, all options to
purchase shares of stock of the Company shall become fully vested and all
restrictions on shares of stock of the Company previously granted to
Executive shall lapse and shall not be subject to any further conditions,
and all such options shall be exercisable unless in the opinion of
counsel such accelerated vesting or restriction lapse will result in plan
disqualification. In such case Company shall offer Executive alternative
means to permit vesting and/or satisfaction of restrictions.
6.5 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 monthly, 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 specified in The Wall
12
Street Journal as the "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.
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 of the
Company. The Company shall obtain the affirmation of any successor or
assignee to the extent necessary to preserve Executive's rights hereunder.
8. Methodology. 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 and 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 of the arbitration
(including reasonable attorneys'
13
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
equally the expenses of the arbitration.
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:
Waypoint Financial Corp.
000 X. Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Chairman, Compensation and Benefits Committee
Fax: (000) 000-0000
With a required copy to:
General Counsel
Waypoint Financial Corp.
000 X. Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
If to Executive, to:
Xxxxx X. Xxxxx
X.X. Xxx 00
Xxxxxxx, XX 00000
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 terminated except
upon written amendment approved by the Board and executed on
its behalf by a duly authorized officer and by Executive.
14
(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 form time to time and as often as may be
deemed expedient or necessary by such party in its sole discretion.
14. Beneficiaries. 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.
15
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 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.
[Remainder of Page Intentionally Left Blank]
16
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
ATTEST: WAYPOINT FINANCIAL CORP.
________________________________ By: _____________________________________
Secretary Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman of the Board
WITNESS: EXECUTIVE
-------------------------------- ----------------------------------------
Xxxxx X. Xxxxx
17
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
ATTEST: WAYPOINT FINANCIAL CORP.
By:
--------------------------- ----------------------------
Secretary Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman of the Board
WITNESS: EXECUTIVE
--------------------------- --------------------------------
Xxxxx X. Xxxxx
