Exhibit 99.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made as of this 9th day of
November, 2007 among ACNB Corporation, (“ACNB”),
Russell Insurance Group, Inc. (“RIG”), and Frank C.
Russell Jr. (“Executive”), an adult individual residing
in Maryland.
WHEREAS , ACNB
Acquisition LLC and Frank C. Russell, Jr. entered into an
Employment Agreement dated November 19, 2004;
WHEREAS, RIG and
Frank C. Russell, Jr. wish to update and modify the November 19,
2004 Employment Agreement;
WHEREAS, this
Agreement supersedes the November 19, 2004 Employment Agreement
between ACNB Acquisition LLC and Frank C. Russell, Jr.;
NOW, THEREFORE, the
parties hereto, intending to be legally bound, agree as
follows:
1.
Employment . RIG
hereby, offers to employ Executive and Executive, hereby, accepts
employment with RIG, under the terms and conditions set forth in
this Agreement.
2.
Duties of Employee .
Executive shall perform and discharge well and faithfully such
duties as an executive officer of RIG as may be assigned to
Executive from time to time by the Board of Directors of RIG, so
long as the assignment is consistent with Executive’s office
and duties. Executive shall be employed as President and Chief
Executive Officer of RIG, and shall hold such titles that may be
given to him from time to time by the Board of Directors of RIG.
Executive shall devote his full time, attention, and energies to
the business of RIG during the Employment Period (as defined in
Section 3 of this Agreement). Executive shall not engage in any
business or commercial activities, duties, or pursuits that compete
with the business or commercial activities of ACNB or RIG, or any
of their subsidiaries or affiliates. Executive shall not serve as a
director, officer, or in any other capacity in a company which
competes with ACNB or RIG or any of their subsidiaries or
affiliates.
3.
Term of Agreement
.
(a)
The initial term of this Agreement shall be for a three (3) year
period (the “Employment Period”), beginning on January
1, 2008 (the “Effective Date”), and if not previously
terminated pursuant to the terms of this Agreement ending three (3)
years later. This Agreement shall be subject to automatic renewal
for successive one (1) year periods beginning on the third
anniversary date of the Effective Date, subject to the terms and
conditions set forth in this Agreement, unless either party
notifies the other in writing at least ninety (90) days prior to
termination of the then current term of the party’s desire to
terminate this Agreement.
(b)
Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically for
“Cause” (as defined herein) upon written notice from
the Board of Directors of RIG to Executive. As used in this
Agreement, “Cause” shall mean any of the following:
(i)
the willful failure by Executive to substantially perform his
duties under this Agreement (other than a failure resulting from
Executive’s incapacity because of physical or mental illness,
as provided in this Agreement) which failure results in monetary or
other injury to ACNB or RIG and Executive fails to cure such
failure within fifteen (15) days following written notice thereof
by the Board of Directors of RIG;
(ii)
the willful engaging by Executive in misconduct injurious to ACNB
or RIG or any of their subsidiaries or affiliates, after notice
from RIG;
(iii)
the willful violation by Executive of the provisions of this
Agreement;
(iv)
the dishonesty of Executive in the performance of his duties;
(v)
the breach of Executive’s fiduciary duty involving personal
profit;
(vi)
the violation of any material law, rule or regulation applicable to
ACNB or RIG, or any final cease and desist order issued by an
applicable regulatory agency;
(vii)
conduct on the part of Executive that brings public discredit to
ACNB, RIG, or any of their subsidiaries or affiliates or that is
clearly contrary to the best interests of ACNB, RIG, or any of
their subsidiaries or affiliates, as determined by a vote of
two-thirds of the directors of the Board of Directors of RIG;
(viii)
unlawful discrimination by Executive, including harassment against
ACNB’s or RIG’s employees, customers, business
associates, contractors, or vendors that could result in liability
to ACNB or RIG;
(ix)
theft or material abuse by Executive of ACNB’s or RIG’s
property or the property of ACNB’s or RIG’s customers,
employees, contractors, vendors, or business associates;
(x)
willful failure of Executive to follow the good faith lawful
instructions of the Board of Directors of RIG with respect to its
operations;
(xi)
the written direction or recommendation of an applicable regulatory
agency to remove Executive from his position with RIG, as
identified herein;
(xii)
any final removal or prohibition order that is issued by an
applicable regulatory agency, of which Executive is subject;
(xiii)
Executive’s conviction of or plea of guilty or nolo
contendere to a felony, crime of falsehood or a crime involving
moral turpitude; or the actual incarceration of Executive;
(xiv)
any act of fraud or misappropriation;
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(xv)
intentional misrepresentation of a material fact, or intentional
omission of information necessary to make the information supplied
not materially misleading, in an application or other information
provided by Executive to ACNB, RIG or any representative of ACNB or
RIG in connection with Executive’s employment with RIG;
or
(xvi)
the existence of any material conflict between the interests of
ACNB, RIG and Executive that is not disclosed in writing by
Executive to ACNB and RIG and approved in writing by the Board of
Directors of RIG and, after notice from RIG, a failure to cure such
conflict within ten (10) days of said notice.
The
Executive shall not be deemed to have been terminated, demoted or
had his salary or benefits reduced for Cause unless and until he
shall have received a written notice of such from the Board,
accompanied by a resolution duly adopted by the affirmative vote of
a majority of the entire Board at a meeting called and held for
such purpose (after reasonable notice to the Executive and a
reasonable opportunity for the Executive to make oral and written
presentations to the members of the Board, on his own behalf or
through a representative who may be his legal counsel, to refute
the grounds for the proposed determination) finding that in the
good faith opinion of the Board grounds exist for such action.
Provided however, that (i) at the discretion of the Board, the
effective date of termination, demotion or reduction of salary or
benefits may relate back to the date of the written notice; and
(ii) the Board may during the period of time beginning with the
written notice contemplated in this section, until affirmative vote
of a majority or the entire Board, place the Executive on
suspension with pay without such action being deemed to be a
termination, demotion or reduction of salary or
benefits.
(c)
Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement and all of ACNB’s and RIG’s compensation
and employment obligations under this Agreement shall terminate
automatically upon Executive’s voluntary termination of
employment other than for Good Reason (as defined in Section 3(d)
of this Agreement) or upon nonrenewal of this Agreement.
(d)
Notwithstanding the provisions of Section 3(a) of this Agreement,
Executive may terminate his employment under this Agreement for
Good Reason. The term “Good Reason” shall mean any of
the following: (1) a material negative change in the duties to be
performed, except as a result of his regulatory removal or in
connection with termination of Executive’s employment for
Cause; (2) any reduction in Executive’s Annual Base Salary as
set forth in Section 4(a) of this Agreement 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 or when a reduction has been implemented by the Board of
Directors of RIG for RIG’s management; (3) a requirement that
Executive relocate his residence more than fifty (50) miles from
the location of his primary residence at the time that this
Agreement is executed; or (4) any material breach of this Agreement
by RIG.
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Executive shall within ninety (90) days of the
occurrence of any of the foregoing events provide notice to RIG of
the existence of the condition, specifically referencing this
section of the Agreement, and provide RIG thirty (30) days in which
to cure the condition. In the event that RIG does not cure the
condition within thirty (30) days of such notice, Executive may
resign from employment with RIG (or, if involuntarily terminated
give notice of intention to collect benefits under this Agreement)
by delivering written notice (the “Notice of
Termination”) to RIG and the provisions of Section 5 of this
Agreement shall apply. In the event that RIG does cure the
condition within thirty (30) days of such notice, Executive is not
entitled to the benefits provided in Section 5 of this
Agreement.
(e)
Notwithstanding the provisions of Section 3(a) of this Agreement,
if, as a result of a physical or mental injury or impairment,
Executive is unable to perform all of the essential job functions
of his position, taking into account any reasonable accommodation
required by law, without posing a direct threat to himself or
others, for a period up to ninety (90) days, then after notice to
Executive, RIG’s obligations to pay Executive an Annual Base
Salary as set forth in Section 4(a) of this Agreement shall be
suspended. Any paid time off, sick leave, or short term disability
pay that Executive may be entitled to receive, pursuant to an
established disability plan or program of RIG shall be considered
part of the compensation Executive shall receive while disabled and
shall not be in addition to the compensation received by Executive
under this Agreement.
Notwithstanding any other provisions of this
Agreement, Executive agrees that should he remain unable to perform
all of the essential functions of his position, taking into account
any reasonable accommodation required by law, without posing a
direct threat to himself or others, for a period greater than
ninety (90) days, RIG will suffer an undue hardship by continuing
Executive in his position. Upon this event, all compensation and
employment obligations of ACNB and RIG under this Agreement shall
cease (with the exception of Executive’s rights under
RIG’s then existing short term and/or long term disability
plans, if any), and this Agreement shall terminate.
(f)
Executive agrees that in the event his employment under this
Agreement is terminated, regardless of the reason for termination,
Executive shall resign as a director of RIG and any parent,
affiliate or subsidiary thereof, if he is then serving as a
director of any such entities.
4.
Employment Period
Compensation .
(a)
Annual Base Salary . For services performed by Executive
under this Agreement, RIG shall pay Executive an “Annual Base
Salary” during the Employment Period at the rate of Three
Hundred Thousand Dollars ($300,000) per year (subject to applicable
withholdings and deductions), payable at the same times as salaries
are payable to other executive employees of RIG. RIG may increase
Executive’s Annual Base Salary, from time to time, and any
and all such increases shall be deemed to constitute amendments to
this Section 4(a) to reflect the increased amounts, effective as of
the date established for such increases by the Board of Directors
of RIG or any committee of such Board in the resolutions
authorizing such increases.
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(b)
Bonus . Executive shall receive an annual incentive
compensation bonus for each year that this Agreement is in effect
as provided on Schedule A attached hereto. The annual bonus will be
paid no later than March 15 of each respective year. The Executive
and RIG agree that ACNB’s management fees do not reduce the
bonus provided in this Section 4(b).
(c)
Paid Time Off and/or Vacations . During the term of this
Agreement, Executive shall be entitled to paid time off and/or
vacation in accordance with the policies as established from time
to time by the Board of Directors of RIG for RIG’s senior
management. Executive shall not be entitled to receive any
additional compensation from RIG for failure to take paid time off
and/or vacation, nor shall Executive be able to accumulate unused
paid time off and/or vacation time from one year to the next,
except to the extent authorized by the Boards of Directors of
RIG.
(d)
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 a
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