EXHIBIT 10.3
EAST PENN BANK
EMPLOYMENT AGREEMENT
WITH
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of this 12th day of April, 2001, between EAST
PENN BANK ("Bank"), a Pennsylvania banking institution having a place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Executive"), an individual residing at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, Bank desires to continue to retain Executive to serve in the
capacity of President and Chief Executive Officer of Bank under the terms and
conditions set forth herein;
WHEREAS, Executive desires to continue to serve the Bank in an executive
capacity under the terms and conditions set forth herein;
WHEREAS, Bank and Executive desire to replace the prior employment
agreement into which they entered on December 14, 1990 ("Prior Agreement");
WHEREAS, Bank and Executive have satisfied all of their obligations under
the Prior Agreement; and
WHEREAS, this Agreement supersedes the Prior Agreement and the Prior
Agreement is null and void.
AGREEMENT:
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:
1) Employment. Bank hereby employs Executive and Executive hereby accepts
employment with Bank, under the terms and conditions set forth in this
Agreement.
2) Duties of Employee. Executive shall continue to serve as the President,
Chief Executive Officer and member of the Board of Directors of Bank,
reporting only to the Board of Directors and shall have supervision and
control over, and responsibility for, the general management and operation
of the Bank and/or any of its subsidiaries or affiliates. Executive shall
have such other duties and hold such other titles as may be given to him
from time to time by the Board of Directors of Bank provided that such
duties are consistent with the Executive's position as President and Chief
Executive Officer of Bank.
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3) Engagement in Other Employment. Executive shall devote all his working
time, ability and attention to the business of the Bank and/or any of its
subsidiaries or affiliates, during the term of this Agreement. The
Executive shall notify the Board of Directors of Bank in writing and
receive written approval from Bank (which approval shall not be
unreasonably withheld) before the Executive engages in any other business
or commercial duties or pursuits, including but not limited to,
directorships of other companies. Under no circumstances may the Executive
engage in any business or commercial activities, duties or pursuits which
compete with the business or commercial activities of the Bank and/or any
of its subsidiaries or affiliates, nor may the Executive serve as a
director or officer or in any other capacity in a company which competes
with Bank. Executive shall not be precluded, however, upon written
notification to the Board of Directors, from engaging in voluntary or
philanthropic endeavors, from engaging in activities designed to maintain
and improve his professional skills, or from engaging in activities
incident or necessary to personal investments, so long as they are, in the
Board's reasonable opinion, not in conflict with or detrimental to the
Executive's rendition of services on behalf of the Bank.
4) Term of Agreement.
(a) This Agreement shall be for a three (3) year period (the "Employment
Period") beginning on the first day of January, 2001, and ending
three (3) years later, subject, however, to prior termination of
this Agreement as set forth in 4(b), (c), and (d) and 6 (a) and (b)
below. Furthermore, subject to the subsequent provisions, upon the
expiration of the first twelve (12) full calendar months after the
date first above written, the term hereof shall be extended for
another twelve (12) full calendar months, and upon expiration of
each subsequent twelve (12) full calendar months thereafter, the
term of this Agreement shall be likewise extended for an additional
twelve (12) full calendar months. Such extension of this Agreement's
term shall be automatic unless the Bank provides the Executive, or
the Executive provides the Bank written notice of its or his
intention not to extend this Agreement, which written notice shall
be given by the Bank or the Executive not less than sixty (60) days
before the expiration of the then current twelve (12) months.
(b) Notwithstanding the provisions of Section 4(a) of this Agreement,
this Agreement shall terminate automatically for Cause (as defined
herein) upon written notice from the Board of Directors of Bank to
Executive. As used in this Agreement, "Cause" shall mean any of the
following:
(i) Executive's conviction of or plea of guilty or nolo
contendere to a felony, a crime of falsehood or a crime
involving moral turpitude, or the actual incarceration of
Executive for a period of thirty (30) consecutive days or
more;
(ii) Executive's failure to follow the good faith lawful
instructions of the
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Board of Directors of Bank with respect to its operations,
after written notice from Bank and a failure to cure such
violation within sixty (60) days of said written notice;
(iii) Executive's willful failure to substantially perform
Executive's duties for Bank, other than a failure resulting
from Executive's incapacity because of physical or mental
illness, as provided in subsection (d) of this Section 4,
after written notice from Bank and a failure to cure such
violation within sixty (60) days of said written notice;
(iv) Executive's intentional violation of the provisions of this
Agreement, after written notice from Bank and a failure to
cure such violation within sixty (60) days of said written
notice;
(v) dishonesty of the Executive in the performance of his
duties;
(vi) gross misconduct on the part of the Executive as determined
by an affirmative vote of eighty percent (80%) of the
disinterested members of the Board of Directors which brings
public discredit to Bank;
(vii) Executive's breach of fiduciary duty involving personal
profit; or
(viii) Executive's willful violation of any law, rule or regulation
governing banks or bank officers or any final cease and
desist order issued by a bank regulatory authority, unless
the Executive's conduct that lead to the violation was
authorized by or occurred at the instruction of the Bank's
Board of Directors.
If this Agreement is terminated for Cause, all of Executive's rights
and benefits under this Agreement shall cease as of the effective
date of such termination except for the rights under Paragraph 18
hereof with respect to arbitration.
(c) Notwithstanding the provisions of Section 4(a) of this Agreement,
the term of this Agreement shall end upon Executive's voluntary
termination of employment (other than in accordance with Section 6
of this Agreement) for Good Reason. The term "Good Reason" shall
mean (i) the assignment of duties and responsibilities inconsistent
with Executive's status as President and Chief Executive Officer of
Bank, (ii) a reassignment which requires Executive to move his
principal residence more than twenty (20) miles from the Bank's
principal executive office immediately prior to this Agreement,
(iii) any removal of the Executive from office or any adverse change
in the terms and conditions of the Executive's employment, except
for any termination of the Executive's employment under the
provisions of Section 4(b) hereof, (iv) any reduction in the
Executive's Annual Base Salary as in effect on the date hereof or as
the same may be increased from time to time, except such reductions
that are the result of a national financial depression or national
or bank emergency when such reduction
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has been implemented by the Board of Directors for Bank's senior
management, (v) any failure of Bank to provide the Executive with
benefits at least as favorable as those enjoyed by the Executive
during the Employment Period under any of the pension, life
insurance, medical, health and accident, disability or other
employee plans of Bank, or the taking of any action that would
materially reduce any of such benefits unless such reduction is part
of a reduction applicable to all employees or limited by severe
health reasons which precludes obtaining such insurance coverage at
commercially reasonable rates, or (vi) a final adjudication, by a
court of competent jurisdiction or a regulatory body governing Bank,
that Bank's Board of Directors violated law, rule, regulation
governing banks or bank officers, or any final cease and desist
order issued by a bank regulatory authority when Bank's Board of
Directors instructed or directed Executive to take certain action or
engage in certain activity. If such termination occurs for Good
Reason, then Bank shall pay Executive an amount equal to and no
greater than 2.99 times the Executive's Agreed Compensation as
defined in Section 4(e), payable in thirty-six (36) equal monthly
installments and subject to federal, state, and local tax
withholdings. In addition, for a period of three (3) years from the
date of termination of employment, or until Executive secures
substantially similar benefits through other employment, whichever
shall first occur, Executive shall receive a continuation of all
life, disability, medical insurance and other normal health and
welfare benefits in effect with respect to Executive during the two
(2) years prior to his termination of employment, or, if Bank cannot
provide such benefits because Executive is no longer an employee, a
dollar amount equal to the cost to Executive of obtaining such
benefits (or substantially similar benefits). Additionally, if
permitted under the terms of the plan, Executive shall receive the
additional retirement benefits to which he would have been entitled
had his employment continued through the then remaining term of the
Agreement. However, in the event the payment described herein, when
added to all other amounts or benefits provided to or on behalf of
the Executive in connection with his termination of employment,
would result in the imposition of an excise tax under Code Section
4999, such payments shall be retroactively (if necessary) reduced to
the extent necessary to avoid such excise tax imposition. Upon
written notice to Executive, together with calculations of Bank's
independent auditors, Executive shall remit to Bank the amount of
the reduction plus such interest as may be necessary to avoid the
imposition of such excise tax. Notwithstanding the foregoing or any
other provision of this contract to the contrary, if any portion of
the amount herein payable to the Executive is determined to be
non-deductible pursuant to the regulations promulgated under Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"),
the Bank shall be required only to pay to Executive the amount
determined to be deductible under Section 280G.
At the option of the Executive, exercisable by the Executive within
ninety (90) days after the occurrence of the event constituting
"Good Reason," the Executive may resign from employment under this
Agreement by a notice in writing (the "Notice of Termination")
delivered to Bank and the provisions of this Section 4(c) hereof
shall thereupon apply.
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(d) Notwithstanding the provisions of Section 4(a) of this Agreement,
the term of this Agreement shall end upon Executive's Disability and
Executive's rights under this Agreement shall cease as of the date
of such termination; provided, however, that Executive shall
nevertheless be entitled to receive any benefits that may be
available under any disability plan of Bank, until the earliest of
(i) Executive's return to employment, (ii) his attainment of age 65,
or (iii) his death. In addition, Executive shall receive for such
period, a continuation of all life, disability, medical insurance
and other normal health and welfare benefits in effect or, if Bank
cannot provide such benefits because Executive is no longer an
employee, a dollar amount equal to the cost to Executive of
obtaining such benefits (or substantially similar benefits). For
purposes of this Agreement, the Executive shall have a Disability
if, as a result of physical or mental injury or impairment,
Executive is unable to perform all of the essential job functions of
his position on a full time basis with or without a reasonable
accommodation and without posing a direct threat to himself and
others, for a period of one hundred eighty (180) days. The Executive
shall have no duty to mitigate any payment provided for in this
Section 4(d) by seeking other employment.
(e) The term "Agreed Compensation" shall equal the sum of (A) the
Executive's highest Annual Base Salary under the Agreement, and (B)
the average of the Executive's annual bonuses with respect to the
three (3) calendar years immediately preceding the Executive's
termination.
5. Employment Period Compensation.
(a) Annual Base Salary. For services performed by Executive under this
Agreement, Bank shall pay Executive an Annual Base Salary during the
Employment Period at the rate of $160,000 per year, minus applicable
withholdings and deductions, payable at the same times as salaries
are payable to other executive employees of Bank. Bank shall review
Executive's performance on an annual basis for the purpose of
determining annual salary and/or bonus payments. Bank may, after
conducting said annual review, increase Executive's Annual Base
Salary, and any and all such increases shall be deemed to constitute
amendments to this Section 5(a) to reflect the increased amounts,
effective as of the date established for such increases by the Board
of Directors of Bank or any committee of such Board in the
resolutions authorizing such increases.
(b) Bonus. Bank may, after conducting the annual review identified in
Section 5(a), pay a bonus or bonuses in the form of cash and/or
stock to Executive, if Bank, in its sole discretion, deems
appropriate. The payment of any such bonuses shall not reduce or
otherwise affect any other obligation of Bank to Executive provided
for in this Agreement.
(c) Vacations. During the term of this Agreement, Executive shall be
entitled to six (6) weeks paid annual vacation. Executive shall not
be entitled to receive any
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additional compensation from Bank for failure to take a vacation,
however, Executive shall be able to carry over unused vacation time
from one year to the next up to a maximum of twelve (12) weeks. Bank
shall not reimburse Executive for any unused vacation.
(d) Automobile. During the term of this Agreement, Bank shall provide
Executive with exclusive use of an automobile mutually agreed upon
by Bank and Executive. Bank shall be responsible and shall pay for
all costs of insurance coverage, repairs, maintenance and other
operating and incidental expenses, including license, fuel and oil.
Bank shall provide Executive with a replacement automobile at
approximately the time Executive's automobile reaches three (3)
years of age or sixty thousand (60,000) miles, whichever is first,
and approximately every three (3) years or sixty thousand (60,000)
miles thereafter, upon the same terms and conditions.
(e) Employee Benefit Plans. During the term of this Agreement, Executive
shall be entitled to participate in or receive the benefits of any
employee benefit plan currently in effect at Bank or that comes into
effect at Bank during the term of this Agreement, subject to the
terms of said plan, until such time that the Board of Directors of
Bank authorizes a change in such benefits. Bank shall implement a
deferred compensation plan no later than April 30, 2001 for which
Executive shall be eligible. Bank shall not make any changes in any
employee benefit plans that would adversely affect Executive's
rights or benefits thereunder, unless such change occurs pursuant to
a program applicable to all executive officers of Bank and does not
result in a proportionately greater adverse change in the rights of
or benefits to Executive as compared with any other executive
officer of Bank. Nothing paid to Executive under any plan or
arrangement presently in effect or made available in the future
shall be deemed to be in lieu of the salary payable to Executive
pursuant to Section 5(a) hereof.
(f) Business Expenses. During the term of this Agreement, Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him, which are properly accounted for, in
accordance with the policies and procedures established by the Board
of Directors of Bank for its executive officers. Bank shall
reimburse Executive for any and all dues and reasonable Bank related
business expenses associated with the Executive's membership in a
country club, social club, or service organization, including but
not limited to, The Rotary Club, The Chamber of Commerce and
Brookside Country Club.
6. Termination of Employment Following Change in Control.
(a) If a Change in Control (as defined in Section 6(b) of this
Agreement) shall occur then, at the option of Executive, exercisable
by Executive within one hundred twenty (120) days of the Change in
Control, Executive may resign from employment with Bank (or, if
involuntarily terminated, give notice of intention to collect
benefits under this Agreement) by delivering a notice in writing
(the
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"Notice of Termination") to Bank and the provisions of Section 8 of
this Agreement shall apply.
(b) As used in this Agreement, "Change in Control" shall mean the
occurrence of any of the following:
(i) (A) a merger, consolidation or division involving Bank, (B) a
sale, exchange, transfer or other disposition of substantially
all of the assets of Bank, or (C) a purchase by Bank of
substantially all of the assets of another entity, unless (y)
such merger, consolidation, division, sale, exchange,
transfer, purchase or disposition is approved in advance by
seventy-five percent (75%) or more of the members of the Board
of Directors of Bank who are not interested in the transaction
and (z) a majority of the members of the Board of Directors of
the legal entity resulting from or existing after any such
transaction and of the Board of Directors of such entity's
parent corporation, if any, are former members of the Board of
Directors of Bank; or
(ii) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the "Exchange Act")),
other than Bank or any "person" who on the date hereof is a
director or officer of Bank, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Bank representing
twenty-five (25%) percent or more of the combined voting power
of Bank's then outstanding securities, or
(iii) during any period of two (2) consecutive years during the term
of Executive's employment under this Agreement, individuals
who at the beginning of such period constitute the Board of
Directors of Bank 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
(iv) any other change in control of Bank similar in effect to any
of the foregoing.
7. Definition of Date of Change of Control.
For purposes of this Agreement, the Date of Change of Control shall mean:
(h) 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 Bank's voting
securities, or
(i) the date of the closing of a sale or the date of the transfer or
exchange of substantially all the Bank's assets,
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or
(j) the date on which a merger, consolidation or division is
consummated, as applicable, or
(k) the ending date of a consecutive two (2) year period during which
individuals who formerly constituted a majority of the Board of
Directors of Bank ceased to be a majority thereof.
8. Rights in the Event of Termination of Employment Following Change in
Control.
(a) In the event that Executive delivers a Notice of Termination (as
defined in Section 6(a) of this Agreement) to Bank, Executive shall
be entitled to receive the compensation and benefits set forth
below:
If a "Change in Control" (as defined in Section 6(b) of this
Agreement) has occurred, Bank shall pay Executive a lump sum amount
equal to and no greater than 2.99 times the Executive's Agreed
Compensation as defined in subsection (e) of Section 4, minus
applicable taxes and withholdings. In addition, for a period of
three (3) years from the date of termination of employment, or until
Executive secures substantially similar benefits through other
employment, whichever shall first occur, Executive shall receive a
continuation of all life, disability, medical insurance and other
normal health and welfare benefits in effect with respect to
Executive during the two (2) years prior to his termination of
employment, or, if Bank cannot provide such benefits because
Executive is no longer an employee, a dollar amount equal to the
cost to Executive of obtaining such benefits (or substantially
similar benefits). If permitted under the terms of the plan,
Executive shall receive additional retirement benefits to which he
would have been entitled had his employment continued through the
then remaining term of the Agreement.
(b) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 8 by seeking other employment
or otherwise. Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section 8 shall not be
reduced by any compensation earned by Executive as the result of
employment by another employer or by reason of Executive's receipt
of or right to receive any retirement or other benefits after the
date of termination of employment or otherwise.
9. Rights in the Event of Termination of Employment Absent Change in Control.
(a) In the event that Executive's employment is involuntarily terminated
by Bank without Cause and no Change in Control shall have occurred
at the date of such termination, Bank shall pay Executive an amount
equal to and no greater than 2.99 times the Executive's Agreed
Compensation as defined in subsection (e) of Section 4, payable in
thirty-six (36) equal monthly installments and subject to federal,
state and local tax withholdings. In addition, for a period of three
(3) years from the date of termination of employment, or until
Executive secures substantially similar benefits through other
employment, whichever shall first
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occur, Executive shall receive a continuation of all life,
disability, medical insurance and other normal health and welfare
benefits in effect with respect to Executive during the two (2)
years prior to his termination of employment, or, if Bank cannot
provide such benefits because Executive is no longer an employee, a
dollar amount equal to the cost to Executive of obtaining such
benefits (or substantially similar benefits). In addition, if
permitted pursuant to the terms of the plan, Executive shall receive
additional retirement benefits to which he would have been entitled
had his employment continued through the then remaining term of the
Agreement. However, in the event the payment described herein, when
added to all other amounts or benefits provided to or on behalf of
the Executive in connection with his termination of employment,
would result in the imposition of an excise tax under Code Section
4999, such payments shall be retroactively (if necessary) reduced to
the extent necessary to avoid such excise tax imposition. Upon
written notice to Executive, together with calculations of Bank's
independent auditors, Executive shall remit to Bank the amount of
the reduction plus such interest as may be necessary to avoid the
imposition of such excise tax. Notwithstanding the foregoing or any
other provision of this contract to the contrary, if any portion of
the amount herein payable to the Executive is determined to be
non-deductible pursuant to the regulations promulgated under Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"),
the Corporation shall be required only to pay to Executive the
amount determined to be deductible under Section 280G.
(b) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 9 by seeking other employment
or otherwise. Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section 9 shall not be
reduced by any compensation earned by Executive as the result of
employment by another employer or by reason of Executive's receipt
of or right to receive any retirement or other benefits after the
date of termination of employment or otherwise.
10. Covenant Not to Compete.
(a) Executive hereby acknowledges and recognizes the highly competitive
nature of the business of Bank and accordingly agrees that, during
and for the applicable period set forth in Section 10(c) hereof,
Executive shall not, except as otherwise permitted in writing by the
Bank:
(i) be engaged, directly or indirectly, either for his own account
or as agent, consultant, employee, partner, officer, director,
proprietor, investor (except as an investor owning less than
5% of the stock of a publicly owned company) or otherwise of
any person, firm, corporation or enterprise engaged in (1) the
banking (including bank or financial institution holding
company), insurance or financial services industry, or (2) any
other activity in which Bank is engaged during the Employment
Period, and remain so
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engaged at the end of the Employment Period, in any area in
which, at any time during the Employment Period or at the date
of termination of the Executive's employment, is within twenty
(20) miles of any branch location, office or other facility of
Bank, unless Executive exclusively performs all such activity
outside of said twenty (20) mile area (the "Non-Competition
Area"); or
(ii) provide financial or other assistance to any person, firm,
corporation, or enterprise engaged in (1) the banking
(including bank or financial institution holding company),
insurance or financial services industry, or (2) any other
activity in which Bank is engaged during the Employment
Period, in the Non-Competition Area; or
(iii) if employed in a capacity provided in (i) and (ii), solicit
current customers, during the term of this Agreement, of Bank
in the Non-Competition Area; or
(iv) solicit employees of Bank who are employed during the term of
this Agreement.
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(b) It is expressly understood and agreed that, although Executive and
Bank consider the restrictions contained in Section 10(a) hereof
reasonable for the purpose of preserving for Bank its good will and
other proprietary rights, if a final judicial determination is made
by a court having jurisdiction that the time or territory or any
other restriction contained in Section 10(a) hereof is an
unreasonable or otherwise unenforceable restriction against
Executive, the provisions of Section 10(a) hereof shall not be
rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such other extent as such court
may judicially determine or indicate to be reasonable.
(c) The provisions of this Section 10 shall be applicable commencing on
the date of this Agreement and ending on one of the following dates,
as applicable:
(i) if Executive's employment terminates as a result of nonrenewal
in accordance with the provisions of Section 4(a) or for Cause
in accordance with the provisions of Section 4(b) (ii), (v),
(vi) or (viii) the effective date of termination of
employment; or
(ii) if Executive's employment terminates in accordance with the
provisions of Section 4(b) (i), (iii), (iv) or (vii) of this
Agreement (relating to termination for Cause), the first
anniversary date of the effective date of termination of
employment; or
(iii) if the Executive voluntarily terminates his employment in
accordance with the provisions of Section 6 of this Agreement
(relating to termination of Employment following a change in
control), the first anniversary date of the effective date of
termination of employment; or
(iv) if the Executive's employment is involuntarily terminated in
accordance with the provisions of Section 6 of this Agreement
(relating to Termination of Employment following a change in
control), the first anniversary date of the effective date of
termination of employment; or
(v) if Executive voluntarily terminates his employment and this
Agreement with or without Good Reason (as defined in Section 4
(c)), the first anniversary date of the effective date of
termination of employment.
11. Unauthorized Disclosure. During the term of his employment hereunder, or
at any later time, the Executive shall not, without the written consent of
the Board of Directors of Bank or a person authorized thereby, knowingly
disclose to any person, other than an employee of 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 Bank, any
material confidential information obtained by him while in the employ of
Bank
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with respect to any of 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 damaging to
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 of a business similar to that conducted by Bank or any
information that must be disclosed as required by law.
12. Liability Insurance. Bank shall use its best efforts to obtain insurance
coverage for the Executive under an insurance policy covering officers and
directors of Bank against lawsuits, arbitrations or other legal or
regulatory proceedings.
13. Notices. Except as otherwise provided in this Agreement, any notice
required or permitted to be given under this Agreement shall be deemed
properly given if in writing and if mailed by registered or certified
mail, postage prepaid with return receipt requested, to Executive's
residence, in the case of notices to Executive, and to the principal
executive offices of Bank, in the case of notices to Bank.
14. Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Executive and an executive officer specifically
designated by the Board of Directors of Bank. 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 provisions or conditions at the same or at any prior or
subsequent time.
15. Assignment. This Agreement shall not be assignable by any party, except by
Bank to any successor in interest to its business.
16. Entire Agreement. This Agreement supersedes any and all agreements, either
oral or in writing, between the parties with respect to the employment of
the Executive by the Bank and this Agreement contains all the covenants
and agreements between the parties with respect to employment. This
Agreement specifically releases all parties of any rights and obligations
under the Executive Employment Agreement of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated December
14, 1990, between East Penn Bank and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and said agreement is
hereafter null and void.
17. Successors; Binding Agreement.
(a) Bank will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or
substantially all of the businesses and/or assets of Bank to
expressly assume and agree to perform this Agreement in the
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same manner and to the same extent that Bank would be required to
perform it if no such succession had taken place. Failure by Bank to
obtain such assumption and agreement prior to the effectiveness of
any such succession shall constitute a breach of this Agreement and
the provisions of Section 48 of this Agreement shall apply. As used
in this Agreement, "Bank" shall mean East Penn Bank, as defined
previously and any successor to its respective business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. If
Executive should die after a notice of termination is delivered by
Executive, or following termination of Executive's employment
without Cause, and any amounts would be payable to Executive under
this Agreement if Executive had continued to live, all such amounts
shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee, or other designee, or, if there is no
such designee, to Executive's estate.
18. Arbitration. Bank and Executive recognize that in the event a dispute
should arise between them concerning the interpretation or implementation
of this Agreement, lengthy and expensive litigation will not afford a
practical resolution of the issues within a reasonable period of time.
Consequently, each party agrees that all disputes, disagreements and
questions of interpretation concerning this Agreement are to be submitted
for resolution, in Philadelphia, Pennsylvania, to the American Arbitration
Association (the "Association") in accordance with the Association's
National Rules for the Resolution of Employment Disputes or other
applicable rules then in effect ("Rules"). Bank or Executive may initiate
an arbitration proceeding at any time by giving notice to the other in
accordance with the Rules. Bank and Executive may, as a matter of right,
mutually agree on the appointment of a particular arbitrator from the
Association's pool. The arbitrator shall not be bound by the rules of
evidence and procedure of the courts of the Commonwealth of Pennsylvania
but shall be bound by the substantive law applicable to this Agreement.
The decision of the arbitrator, absent fraud, duress, incompetence or
gross and obvious error of fact, shall be final and binding upon the
parties and shall be enforceable in courts of proper jurisdiction.
Following written notice of a request for arbitration, Bank and Executive
shall be entitled to an injunction restraining all further proceedings in
any pending or subsequently filed litigation concerning this Agreement,
except as otherwise provided herein.
19. Validity. The invalidity or unenforceability of any provision 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.
20. Applicable Law. This Agreement shall be governed by and construed in
accordance
EXECUTION COPY
with the domestic, internal laws of the Commonwealth of Pennsylvania,
without regard to its conflicts of laws principles.
21. Headings. The section headings of this Agreement are for convenience only
and shall not control or affect the meaning or construction or limit the
scope or intent of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EAST PENN BANK
_______________________________ By ________________________________
▇▇▇▇ ▇. ▇▇▇▇▇, Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of theBoard
WITNESS:
_______________________________ ___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive
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