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 25th day of
April, 2005,
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 Susan B. Bergen-Painter of 69
Bullrush Landing, Elizabethtown, PA 17022 (hereinafter referred to as
"Executive").
BACKGROUND
WHEREAS,
the Bank desires to
employ Executive as
Executive Vice President
of Marketing ("Officer") and to offer Executive
certain benefits in
connection
with such employment;
WHEREAS,
Executive is desirous of securing such employment and such
benefits 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
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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
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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 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
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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.
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 Executive
Vice President
of Marketing;
c) causing or requiring Executive to report to anyone other than the
President;
d) assignment to Executive of duties materially inconsistent with
Executive's position as Executive Vice President of Marketing;
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%
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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 exceeds three times
Executive's average annual compensation from the Bank for the
five years prior
to the Change in Control. If payments are
considered "parachute
payments," then
all such payments to
