Exhibit 10.15
CHANGE OF CONTROL, NON-COMPETE
AND
NON-DISCLOSURE
AGREEMENT
THIS CHANGE OF CONTROL, NON-COMPETE
AND NON-DISCLOSURE AGREEMENT (the “Agreement”) is made
as of this 19 day of June, 2006, by and between FIRST NATIONAL BANK
OF CHESTER COUNTY, a wholly-owned subsidiary of First Chester
County Corporation and a national banking association with its
principal offices located at 9 North High Street, West Chester,
Pennsylvania (hereinafter individually referred to as the
“Bank”) and Andrew H. Stump of 811 Peter Christopher
Drive, West Chester, PA 19382 (hereinafter referred to as
“Executive”).
BACKGROUND
WHEREAS, the Bank desires to ensure
the continued employment of Executive with the Bank by providing
certain benefits to Executive in connection with a Change of
Control (as defined below) and the compensation increase effective
on the date of the signing of this Agreement;
WHEREAS, Executive is desirous of
securing such benefits on the terms and conditions set forth
herein; and
WHEREAS, in consideration of the
receipt of such benefits, Executive is willing to be bound by
certain non-compete and non-disclosure obligations as set forth
herein;
NOW, THEREFORE, in consideration of
the premises and mutual covenants and agreements hereinafter set
forth, the parties, intending to be legally bound hereby agree as
follows:
1.
TERM OF AGREEMENT
.
This Agreement is effective as of
the latest to occur of the following dates: (a) the date
this Agreement is executed and delivered by both Executive and the
Bank, (b) the date on which Executive’s employment as
Officer commences, or (c) the date set forth above. This
Agreement will continue in effect as long as Executive is actively
employed by the Bank, unless Executive and the Bank agree in
writing to termination of this Agreement.
2.
TERMINATION
COMPENSATION .
If Executive’s employment with
the Bank is terminated without “Cause” (as defined in
Section 6) at any time within two years following a
“Change of Control” (as defined in Section 4),
Executive will receive the “Termination Benefits” (as
defined in Section 3). Executive will also receive the
Termination Benefits if Executive terminates his or her employment
for “Good Reason” (as defined in Section 5) at any
time within two years following a Change of Control.
Executive is not entitled to receive
the Termination Benefits if Executive’s employment is
terminated by Executive or the Bank for any or no reason before a
Change of Control occurs or more than two years after a Change of
Control has occurred.
In order to receive the Termination
Benefits, Executive must execute any release of claims that
Executive may have pursuant to this Agreement (but not any other
claims) that may be requested by the Bank.
The Termination Benefits will be
paid to Executive under the terms and conditions hereof, without
regard to whether Executive looks for or obtains alternative
employment following Executive’s termination of employment
with the Bank.
3.
TERMINATION BENEFITS
DEFINED .
For purposes of this Agreement, the
term “Termination Benefits” will mean and include the
following:
(a)
For a period
of one
year from
Executive’s termination (the “Benefit Period”),
payment of Executive’s base salary on the same basis that
Executive was paid immediately prior to Executive’s
termination; Payment of any bonus Executive would otherwise be
eligible to receive for the year in which Executive’s
termination occurs and for that portion of the following
year which
is included in the Benefit Period, such bonus to be calculated and
paid as provided below; and
(b)
Continuation
during the Benefit Period of all fringe benefits that Executive was
receiving immediately prior to Executive’s termination,
including, without limitation, life, disability, accident and group
health insurance benefits coverage for Executive and
Executive’s immediate family (“Fringe Benefits”),
such Fringe Benefits to be provided on substantially the same terms
and conditions as they were provided immediately prior to
Executive’s termination.
(c)
The bonus
component of Executive’s Termination Benefits will equal the
sum of (i) the bonus to which Executive would have been
entitled for the year during which Executive’s termination
occurs (calculated after annualizing the Bank’s consolidated
financial results through the date of termination if such bonus is
based upon a percentage of profits) (the “Annual
Amount”), and (ii) an amount equal to the product of
(x) the Annual Amount times (y) a fraction the numerator
of which is the number of days in the year following termination
which is included in the Benefit Period and the denominator of
which is 365 (the “Prorated Amount”). Both the
Annual Amount and the Prorated Amount will be paid to Executive not
later than March 31st of the year following Executive’s
termination.
Notwithstanding the foregoing, if
Executive terminates his or her employment for Good Reason,
Executive’s Termination Benefits will be based upon the
greater of (i) Executive’s salary, bonus and benefits
immediately prior to Executive’s termination or
(ii) Executive’s salary, bonus and benefits immediately
prior to the Change of Control which gives rise to
Executive’s right to receive Termination Benefits under this
Agreement.
The Bank does not intend to provide
duplicative Fringe Benefits. Consequently, Fringe Benefits
otherwise receivable pursuant to this Section will be reduced
or eliminated if and
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to the extent that Executive receives comparable
Fringe Benefits from any other source (for example, another
employer); provided, however, that Executive will have no
obligation to seek, solicit or accept employment from another
employer in order to receive such benefits.
4.
CHANGE OF CONTROL
DEFINED .
For purposes of this Agreement, a
“Change of Control” will be deemed to have occurred
upon the earliest to occur of the following events:
(a)
the date the
shareholders of the Bank (or the Board of Directors, if shareholder
action is not required) approve a plan or other arrangement
pursuant to which the Bank will be dissolved or
liquidated;
(b)
the date the
shareholders of the Bank (or the Board of Directors, if shareholder
action is not required) approve a definitive agreement to sell or
otherwise dispose of all or substantially all of the assets of the
Bank;
(c)
the date the
shareholders of the Bank (or the Board of Directors, if shareholder
action is not required) and the shareholders of the other
constituent corporation (or its board of directors if shareholder
action is not required) have approved a definitive agreement to
merge or consolidate the Bank with or into such other corporation,
other than, in either case, a merger or consolidation of the Bank
in which holders of shares of the common stock of the Bank (the
“Common Stock”) immediately prior to the merger or
consolidation will hold at least a majority of the ownership of
common stock of the surviving corporation (and, if one class of
common stock is not the only class of voting securities entitled to
vote on the election of directors of the surviving corporation, a
majority of the voting power of the surviving corporation’s
voting securities) immediately after the merger or consolidation,
which common stock (and, if applicable, voting securities) is to be
held in the same proportion as such holders’ ownership of
Common Stock immediately before the merger or
consolidation;
(d)
the date any
entity, person or group, (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the
Securities and Exchange Act of 1934, as amended (the
“Exchange Act”)), other than the Bank or any of its
subsidiaries or any employee benefit plan (or related trust)
sponsored or maintained by the Bank or any of its subsidiaries,
shall have become the beneficial owner of, or shall have obtained
voting control over, more than fifty percent (50%) of the
outstanding shares of the Common Stock; or
(e)
the first day
after the date this Plan is adopted when directors are elected so
that a majority of the Board of Directors shall have been members
of the Board of Directors for less than twenty-four (24) months,
unless the nomination for election of each new director who was not
a director at the beginning of such twenty-four (24) month period
was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such
period.
Notwithstanding any provision herein
to the contrary, the filing of a proceeding for the reorganization
of the Bank under Chapter 11 of the Federal Bankruptcy Code or any
successor or other statute of similar import will not be deemed to
be a Change of Control for purpose of this Agreement.
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5.
GOOD REASON DEFINED
.
For purposes of this Agreement, the
term “Good Reason” will mean and include the following
situations:
(a)
any material
adverse change in Executive’s status, responsibilities or
Fringe Benefits;
(b)
any failure to
nominate or elect Executive as Senior Vice President - Senior
Commercial Loan Officer;
(c)
causing or
requiring Executive to report to anyone other than the Executive
Vice President - Business Banking;
(d)
assignment to
Executive of duties materially inconsistent with Executive’s
position as Senior Vice President - Senior Commercial Loan
Officer;
(e)
any reduction of
Executive’s annual base salary or annual bonus (or, if
applicable, a change in the formula for determining
Executive’s annual bonus which would have the effect of
reducing by more than 10% Executive’s annual bonus as it
would otherwise have been calculated immediately prior to the
Change of Control that gives rise to Executive’s right to
receive Termination Benefits as provided in this Agreement) or
other reduction in compensation or benefits, or
(f)
requiring
Executive to be principally based at any office or location more
than 50
miles from the
current offices of the Bank in West Chester,
Pennsylvania.
6.
CAUSE DEFINED
.
For purposes of this Agreement, the
term “Cause” will mean and include the following
situations:
(a)
Executive’s
conviction by a court of competent jurisdiction of any criminal
offense involving dishonesty or breach of trust or any felony or
crime involving moral turpitude;
(b)
Executive’s
failure to perform the duties reasonably assigned to Executive by
the Board of Directors of the Bank fail without reasonable cause or
excuse, which failure or breach continues for more than ten days
after written notice thereof is given to Executive.
7.
CEILING ON BENEFITS
.
Under the “golden
parachute” rules in the Internal Revenue Code (the
“Code”) Executive will be subject to a 20% excise tax
(over and above regular income tax) on any “excess parachute
payment” that Executive receives following a Change in
Control, and the Bank will not be permitted to deduct any such
excess parachute payment. Very generally, compensation paid
to Executive that is contingent upon a Change in Control will be
considered a “parachute payment” if the present value
of such consideration equals or exce
