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CHANGE OF CONTROL SEVERANCE
AGREEMENT
THIS CHANGE OF CONTROL SEVERANCE
AGREEMENT is entered into this 22nd day of May, 2008, between
JUNIATA VALLEY FINANCIAL CORP., a Pennsylvania business corporation
having its principal place of business in Mifflintown,
Pennsylvania, and THE JUNIATA VALLEY BANK, a state-chartered bank
located in Juniata, Pennsylvania (collectively, the
“Bank”), and MARCIE A. BARBER, an individual residing
at, 708 Electric Avenue, Lewistown, Pennsylvania 17044 (the
“Employee”).
WHEREAS,
the Employee has substantial knowledge, ability and experience
which are beneficial to the successful operation of the Bank;
and
WHEREAS,
the Employee has recently accepted the position of Senior Vice
President and Chief Operating Officer at the Bank
(“COO”); and
WHEREAS,
the Bank desires to secure for itself the benefit of the
Employee’s knowledge, ability and experience and be assured
of the Employee’s active participation in the business
operations of the Bank; and
WHEREAS,
Employee will acquire and use extensive knowledge and information
about the Bank’s operations, much of which is confidential
and proprietary in nature; and
WHEREAS,
the Bank wishes to protect its confidential and proprietary
information as well as its general business interests; and
WHEREAS,
the Employee and the Bank wish to enter into this Agreement in
order to protect the confidential and proprietary interests of the
Bank and to induce the Employee to become actively involved in the
business operations of the Bank by providing the Employee with the
opportunity to receive benefits under this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound, the parties agree as
follows:
1. SEVERANCE BENEFIT. In consideration for agreeing to be
bound hereunder, the Employee will become eligible to receive the
benefit provided in this Agreement. The benefit payable under this
Agreement is triggered upon termination of Employee’s
employment upon the occurrence of any of the events set forth in
Section 2 hereof following a Change of Control as defined in
Section 6(b) of this Agreement. The severance benefit will be equal
to that amount which, when reduced to its present value (determined
by using a discount rate equal to one hundred twenty(120%) percent
of the applicable federal rate, as determined under Section 1274(d)
of the Internal Revenue Code of 1986, as amended, compounded
semiannually), equals 2.95 times Employee’s Average Annual
Compensation. For purposes of this Section, Employee’s
Average Annual Compensation shall be the average of
Employee’s annual compensation payable by the Bank and
includible in Employee’s gross income for the five
(5) most recent taxable years (or such shorter period as
Employee has been employed by Bank, if less than five years) ending
before the date on which Employee’s employment with the Bank
was terminated.
The
benefit shall be in the form of a lump sum payment and shall be
made no later than thirty (30) days following the effective
date of the termination.
1
In the
event Employee should breach Employee’s obligations under
this Agreement at any time, the Bank’s obligation under this
Section shall terminate immediately.
2. TERMINATION OF EMPLOYMENT. If a Change of Control shall
occur and if thereafter, at any time, there shall be:
(a) Any involuntary termination of Employee’s employment
(other than for Cause);
(b) Any termination of Employee’s employment by the
Employee for “Good Reason.” For purposes of this
Agreement, Employee shall have Good Reason to resign if:
(i)
(A) there is a material diminution in Employee’s base
compensation as in effect immediately prior to the Change of
Control; (B) there is a material increase in the
Employee’s commute by automobile from Mifflintown,
Pennsylvania to where she must perform her services; (C) there
is a material diminution in the Employee’s authority, duties
or responsibilities (or those of the Employee’s supervisor)
or the Employee’s budget authority, (D) there is a
material breach of any applicable employment agreement; or
(E) there is a material increase in the Employee’s
travel time away from home in performance of her required duties on
behalf of the Bank than was required of Employee during the year
preceding the year in which the Change of Control occurred;
(ii) the separation occurs no later than two years after the
Good Reason condition occurs; and
(iii) the Employee gives notice of the Good Reason condition
to the Bank or its successor within 90 days of when it comes
into existence and the Bank or its successor fails to remedy or
cure the Good Reason condition within thirty (30) days.
If the Bank fails to cure
the Good Reason condition, then, at the option of Employee,
exercisable by Employee within the time period in (ii) above,
the Employee may resign from employment (or, if involuntarily
terminated, give notice of intention to collect the benefit
hereunder) by delivering a notice in writing (the “Notice of
Termination”) to the Bank. .
3. DURATION OF AGREEMENT. Prior to the occurrence of a Change
of Control, this Agreement shall remain in effect only while the
Employee is the COO or in a higher ranking position (as determined
by the Board of Directors) of the Bank.
4. UNAUTHORIZED DISCLOSURE. During the term of this Agreement
or at any later time, the Employee shall not, without the written
consent of the Bank, disclose to any person (including an employee
of the Bank or a Subsidiary), other than a person to whom
disclosure is reasonably necessary or appropriate or required in
connection with the performance by the Employee of her duties as an
employee of the Bank, any material confidential information
obtained by her while in the employ of the Bank or any Subsidiary
with respect to any of the services, products, improvements,
formulas, designs or styles, processes, customers, methods of
distribution or business practices, the disclosure of which
reasonably would be expected to materially damage the Bank;
provided, however, that for purposes of this Agreement,
confidential information shall not include any information known
generally to the public (other than as a result of unauthorized
disclosure by the Employee) 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 Bank.
5. RESTRICTIVE COVENANTS. Except as otherwise provided below,
upon termination of her employment with the Bank (or a Subsidiary),
regardless of the circumstances or reasons for such termination,
the Employee covenants and agrees as follows:
(a) NONCOMPETITION. Upon any termination of employment of
Employee which results
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