CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (hereinafter "Agreement") is made as of
the 1st day of October, 1997, between PeoplesBank, A Codorus Valley Company, a
Pennsylvania banking institution (the "Bank"), Codorus Valley Bancorp, Inc., a
Pennsylvania business corporation (the "Corporation") and Xxxx X. Xxxxxx, an
adult individual (the "Executive").
WHEREAS, the Corporation employs the Executive as its Assistant Secretary
and Assistant Treasurer, and the Bank employs the Executive as its Senior Vice
President and Chief Financial Officer; and
WHEREAS, the Executive has provided valued service to the Corporation and
the Bank in the past; and
WHEREAS, in recognition of the valued past and present service of the
Executive, the Bank and the Corporation desire to provide incentive for
continued valued service and grants to the Executive the benefits set forth
herein upon the occurrence of a Change of Control (as defined herein); and
WHEREAS, the purpose of this Agreement is to define certain severance
benefits that will be paid by the Bank and the Corporation in the event of a
Change of Control (as defined herein). This Agreement is not intended to affect
the terms of the Executive's employment at will, in the absence of a Change of
Control (as defined herein) of the Bank and the Corporation. Accordingly,
although this Agreement will take effect upon Executive as a binding legal
obligation of the Bank and the Corporation, it will become operative only upon a
Change in Control, as that concept is defined below.
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NOW THEREFORE, in consideration of the Executive's service to the
Corporation and the Bank and of the mutual covenants, undertakings and
agreements set forth herein and intending to be legally bound hereby, the
parties agree as follows:
1. TERM The initial term of this Agreement shall be deemed to have
commenced on October 1, 1997, such that the initial term shall continue for a
period of fifteen (15) months until December 31, 1998. Each term thereafter
shall consist of a twelve (12) month period which shall begin on January 1, of
each year. On the initial renewal date of January 1, 1999, and on each
subsequent renewal date, this Agreement shall be automatically renewed for an
additional twelve (12) month term, unless the Corporation and/or the Bank
provide the Executive with written notice of non-renewal at least sixty (60)
days prior to any such renewal date. For example: (1) if the Corporation and/or
the Bank do not provide written notice of non-renewal at least sixty (60) days
prior to January 1, 1999, the Agreement will automatically renew for an
additional twelve (12) month period terminating on December 31, 1999; or (2) If
the Corporation and/or the Bank provide written notice of non-renewal on
November 1, 1998, which is at least sixty (60) days prior to January 1, 1999,
the Agreement will terminate on December 31, 1998.
2. DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, the
term "Change of Control" shall mean: A change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A and any successor rule or regulation promulgated under the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without
limitation, such a change in control shall be deemed to have occurred if (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Corporation or any "person" who on the date hereof is a director
or officer of the Corporation is or
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becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
twenty-five percent (25%) or more of the combined voting power of the
Corporation's then outstanding securities, or (b) during any period of two
consecutive years during the term of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the Bank or
Corporation cease for any reason to constitute at least a majority thereof,
unless the election of each director who was not a director at the beginning of
such period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the period, or (c) the sale or transfer of all or substantially all of the
Bank or Corporation's assets.
3. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this Agreement,
the date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of
twenty-five percent (25%) or more of the Corporation's voting securities, or
(b) the date of the transfer of all or substantially all of the Bank or
Corporation's assets, or
(c) the date on which a merger, consolidation or combination is
consummated, as applicable, or
(d) the date on which individuals who formerly constituted a majority of
the Board of Directors of the Bank or Corporation, ceased to be a majority.
4. PAYMENTS UPON TERMINATION. If a Change of Control (as defined herein)
occurs, the Executive shall receive a lump sum amount equal to his current
"Annual Direct Salary",
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as of the Date of the Change of Control (as defined herein). Annual Direct
Salary shall be defined herein as the fixed, gross, base annual salary paid to
the Executive in installments at such time as the Bank and Corporation
customarily pays its other senior officers and shall not include any benefits,
bonuses, incentives or other compensation.
5. UNAUTHORIZED DISCLOSURE. During the term of this Agreement, or at any
later time, the Executive shall not, without the written consent of the Board of
Directors of the Corporation or Bank or a person authorized thereby, knowingly
disclose to any person, other than an employee of the Corporation or Bank or a
person to whom disclosure is reasonably necessary or appropriate in connection
with the performance by the Executive of his duties as an executive of the
Corporation or Bank, any material confidential information obtained by him while
in the employ of the Corporation or Bank with respect to any of the Corporation
or Bank's services, products, improvements, formulas, designs or styles,
processes, customers, methods of business or any business practices the
disclosure of which could be or will be materially damaging to the Corporation
or Bank provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by the Executive or any person with the assistance,
consent or direction of the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Corporation or Bank or any information
that must be disclosed as required by law.
6. RESTRICTIVE COVENANT. The Executive covenants and agrees that the
Executive shall not directly or indirectly, within the marketing area of the
Bank (defined as an area within twenty-five (25) of the registered office of the
Bank), enter into or engage generally in direct
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or indirect competition with the Corporation or Bank or any subsidiary of the
Corporation, either as an individual on his own or as a partner or joint
venturer, or as a director, officer, greater than five percent (5%) shareholder,
employee, agent, independent contractor, lessor or creditor of or for any
person, for a period of six (6) months after the date of termination of his
employment if the Executive's employment is terminated as a result of a Change
of Control (as defined herein). The existence of any claim or cause of action of
the Executive against the Corporation or Bank, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Corporation or Bank of this covenant. The Executive agrees that any breach of
the restrictions set forth in this Agreement will result in irreparable injury
to the Corporation or Bank for which it shall have no adequate remedy at law and
the Corporation or Bank shall be entitled to injunctive relief in order to
enforce the provisions hereof. In the event that this paragraph shall be
determined by any court of competent jurisdiction to be unenforceable in part by
reason of it being too great a period of time or covering too great a
geographical area, it shall be in full force and effect as to that period of
time or geographical area determined to be reasonable by the court.
7. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this
Agreement by either the Corporation, Bank or the Executive resulting in damages
to another party to this Agreement, that party may recover from the party
breaching the Agreement only those damages as set forth herein. In no event
shall any party be entitled to the recovery of attorney's fees or costs.
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8. NOTICE. 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 hand-delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Xxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
If to the Bank: Xxxxx X. Xxxxxx, President
PeoplesBank, A Codorus Valley Company
000 Xxxxxx Xxxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx 00000
If to the Corporation: Xxxxx X. Xxxxxx, President
Codorus Valley Bancorp, Inc.
000 Xxxxxx Xxxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx 00000
or to 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.
9. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the Executive, the Corporation and the Bank and any of their successors or
assigns, provided however, that the Executive may not commute, anticipate,
encumber, dispose or assign any payment except as set forth in paragraph 12.
10. SEVERABILITY. If any provision of this Agreement is declared
unenforceable for any reason, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect.
11. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing.
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12. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of Executive's
death, any moneys that may be due him from the Bank under this Agreement as of
the date of death shall be paid to the person designated by him in writing for
this purpose, or in the absence of any such designation to his estate.
13. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
14. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements,
either oral or in writing, between the parties with respect to compensation
resulting from a Change of Control (as defined herein), and this Agreement
contains all the covenants and agreements between the parties with respect to
compensation resulting from a Change of Control (as defined herein).
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed in their respective names
and, in the case of the Corporation and Bank, by its authorized representatives
the day and year above mentioned.
ATTEST: PEOPLESBANK, A CODORUS VALLEY COMPANY
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxx
Secretary Chairman of the Board
ATTEST: CODORUS VALLEY BANCORP, INC.
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx Xx. Xxxxxx X. Xxxxx
Secretary Chairman of the Board
WITNESS:
/s/ Xxxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
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Xxxxx X. Xxxxxx Xxxx X. Xxxxxx
