Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is dated as of the 1st day of March, 2010, between COMM BANCORP,
INC., a Pennsylvania business corporation (“Comm Bancorp”), COMMUNITY BANK AND
TRUST COMPANY, a Pennsylvania state-chartered banking institution (the “Bank”)
and William F. Farber, Sr., an adult individual and resident of the Commonwealth
of Pennsylvania (“Executive”).
WITNESSETH
WHEREAS, Comm Bancorp and the Bank each desire to employ the Executive as it’s
President and Chief Executive Officer under the terms and conditions set forth
herein; and
WHEREAS, the Executive desires to serve Comm Bancorp and the Bank in an
executive capacity under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows:
1. TERM OF EMPLOYMENT. Comm Bancorp and the Bank each employ the Executive and
the Executive accepts employment with them for an initial period of three
(3) years beginning on the 1st day of March 2010, and ending on the 28th day of
February, 2013 subject, however, to one-year automatic extensions at the end of
each one (1) year period so that this Agreement “evergreens” so as to have a
constant three (3) year term as of the end of each contract year unless either
Comm Bancorp, the Bank or Executive gives the other written notice at least six
(6) months prior to the expiration of the then current contract year of their
intention not to extend this Agreement (subject to Paragraph 10 hereof), and
also subject to prior termination of this Agreement as set forth below.
2. POSITION AND DUTIES. The Executive shall serve as the President and Chief
Executive Officer of Comm Bancorp and the Bank, reporting only to the respective
Boards of Directors Comm Bancorp and the Bank: shall have supervision and
control over, and responsibility for, the general financial management and
operation and general senior executive oversight of Comm Bancorp and the Bank;
and shall have such other powers and duties as may from time to time be
prescribed by the respective Boards of Directors of Comm Bancorp and the Bank,
provided that such duties are consistent with the Executive’s position as
President and Chief Executive Officer in charge of the general management of
each.

 

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3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote substantially all
his available working time, ability and attention to the business of Comm
Bancorp and the Bank during the term of this agreement. Except with the prior
written approval of the Boards of Directors of each, the Executive shall not
engage in any other business or commercial activities, duties or pursuits,
during the term of this agreement. Under no circumstances may the Executive
engage in any business or commercial activities, duties or pursuits which
compete with the business or commercial activities or either Comm Bancorp or the
Bank nor may the Executive serve as a director or officer or in any other
capacity in a company or financial institution which competes with either Comm
Bancorp or the Bank. Passive investments and personal activities not resulting
in material compensation or a conflict of interest with either Comm Bancorp or
the Bank shall not be deemed a breach of the restrictions of this paragraph.
With the prior approval of the Board of Directors of Comm Bancorp, which
approval shall not be unreasonably withheld, the Executive may participate in
trade associations, charitable, civic or similar not-for-profit, philanthropic
or eleemosynary organizations, including services as an officer or a director.
Such participation shall not be deemed a breach of this Agreement, but the total
amount of time spent by the Executive in such activities during normal working
hours shall be periodically reviewed by the Board of Directors of Comm Bancorp
and the Bank.
4. COMPENSATION.
A. ANNUAL DIRECT SALARY:
1. ANNUAL SALARY: As compensation for services rendered under this Agreement,
the Executive shall be entitled to receive an annual salary of $168,000.00
Dollars per year, payable in substantially equal bi-monthly installments (or
such other more frequent intervals as may be determined by the Board of
Directors as payroll policy for senior executive officers) prorated for any
partial employment period. The annual salary shall be reviewed by the Board of
Directors prior to each calendar year of this Agreement beginning January 1,
2011 and shall be adjusted based on performance. The increase in annual salary
shall be communicated to the Executive on or before April 1st and shall be
effective as of January 1 of each year. In no event shall the annual salary be
decreased.
B. INCENTIVE COMPENSATION. Executive shall receive a yearly bonus as recommended
by the Executive Compensation Committee and Board of Directors.

 

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5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES. It is agreed that
nothing paid to the Executive under any of the below-described benefit plans or
arrangements shall be deemed to be in lieu of compensation otherwise payable to
the Executive hereunder and shall not be deemed to be a part of Annual Direct
Salary. The Executive shall be entitled to:
A. EMPLOYMENT BENEFIT PLANS. The Executive shall be entitled to participate in
and to receive benefits under all employee benefit plans for which he
qualifies(e.g. health care and disability insurance and 401K retirement
plan),provided for other executive level employees of either Comm Bancorp or the
Bank, but it is not the parties intention to create duplicate entitlements. The
Executive may select which plan if more than one plan is available.
B. VACATION AND HOLIDAYS. The Executive shall be entitled to the number of paid
vacation days in each calendar year determined by the Bank from time to time for
its senior executive officers, but no less than twenty (20) days in any calendar
year (pro-rated in any calendar year during which the Executive is employed
hereunder for less than the entire such year in accordance with the number of
days in such calendar year during which he is so employed). The Executive shall
also be entitled to all paid holidays, personal days and sick days given by the
Bank to its senior executive officers.
C. BUSINESS EXPENSES. During the term of his employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by him in performing services hereunder, upon presentation of proper
receipts or other documents in accordance with the then current policy of the
Bank.
D. BANKING INDUSTRY FUNCTIONS. The Executive may devote reasonable time to
attending conventions, seminars and meetings sponsored by the Pennsylvania
Banking Association, American Bankers Association and other banking or
educational organizations at the expense of the Bank or Comm Bancorp, as the
case may be. Such attendance at conventions will be approved by the Board of
Directors of the Bank.
E. CLUB MEMBERSHIP. The Bank shall provide Executive with application fees, bond
costs and annual dues in connection with his membership in such private clubs,
social, civic and community organizations that the Board of Directors of the
Bank may reasonably determine during the term of employment hereunder.

 

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F. AUTOMOBILE. The Executive shall be furnished a new automobile, model to be
set by the Board, every three years, with insurance, maintenance, fuel and all
fees and costs paid by the Bank.
G. OTHER PERQUISITES AND BENEFITS. The Executive shall be entitled to receive
such additional perquisites and fringe benefits as the Boards of Directors of
either Comm Bancorp or the Bank reasonably deem appropriate in their sole
discretion.
6. INDEMNIFICATION. Comm Bancorp and the Bank agree that their By-Laws shall
continue to provide for indemnification of their directors, officers, employees
and agents, to the fullest extent allowed under Pennsylvania law, including the
Executive during the full term of this Agreement, and shall at all times provide
adequate insurance for such purposes.
7. UNAUTHORIZED DISCLOSURE. At no time during the period of his employment
hereunder and thereafter, shall the Executive, without the written consent of
the Boards of Directors of Comm Bancorp or the Bank or a person authorized
thereby, knowingly disclose to any person, other than an employee of either Comm
Bancorp or the Bank, as the case may be, 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, any material confidential information
obtained by him while in the employ of either Comm Bancorp or the Bank with
respect to any of their services, products, improvements, formulas, designs or
styles, processes, customers, methods of distribution or any business practice
the disclosure of which he knows will be materially damaging to either Comm
Bancorp or the 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 information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by Comm Bancorp or the Bank.
8. RESTRICTIVE COVENANTS. The Executive covenants and agrees as follows: the
Executive shall not directly or indirectly, within the marketing area of the
Bank (defined as Lackawanna County, Susquehanna County, Wayne County, Wyoming
County, and Monroe County, Pennsylvania), or any future market area of the Bank
(defined as an area within 20 miles of any branch office located outside of
those counties, and begun during the Executive’s employment under the terms of
this Agreement), enter into or engage generally in competition with the Bank
either as sole proprietor or as partner or joint venturer, or as a director,
officer, shareholder (except as a shareholder of less than five (5.0%)

 

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percent of the outstanding shares of a corporation if Executive is not an
employee, officer or Director of such corporation), employee or agent for any
person, during the term of this Agreement and for a period of five (5) years
after the date of termination of his employment hereunder for any reason
delineated under Sections 9B, C, D and E. The Executive agrees that any breach
of the restriction set forth in this paragraph shall result in irreparable
injury to the Bank for which it shall not have adequate remedy at law and the
Bank shall be entitled to injunctive relief in order to enforce the provisions
hereof. In the event that this paragraph shall be determined by any court of
competent jurisdiction to be unenforceable in part by reason of its being too
great a period of time or covering too great a geographical area, it shall be in
full force and effect as to that period of time or geographical area determined
to be reasonable by the court.
9. TERMINATION.
A. DEATH. The Executive’s employment hereunder by Comm Bancorp or the Bank shall
terminate upon his death.
B. DISABILITY. The Executive’s employment hereunder shall, at Comm Bancorp’s or
the Bank’s option, terminate if he becomes totally and permanently disabled. The
Executive shall be deemed totally or permanently disabled if he becomes unable
to perform a substantial portion of his duties under this Agreement and a
physician mutually selected by Bank and the Executive determines such inability
will continue for a period of one hundred eighty (180) days or more and is
likely to be permanent. The Executive shall be deemed disabled if he receives
total disability benefits under either Comm Bancorp’s or the Bank’s disability
insurance plan. Such termination shall be without prejudice to any right
Executive may have to receive benefits under any disability insurance plan
maintained by either Comm Bancorp or the Bank.
C. CAUSE. Either Comm Bancorp or the Bank may terminate the Executive’s
employment hereunder for Cause. For the purposes of this Agreement, either Comm
Bancorp, or the Bank shall have “Cause” to terminate the Executive’s employment
hereunder upon:
1. The willful failure by the Executive to substantially perform his duties
hereunder after Comm Bancorp or the bank has given the Executive written notice
of his failure to perform and the Executive does not cure such failure within
thirty (30) business days of the receipt of such notice, other than any such
failure resulting from the Executive’s incapacity due to physical or mental
illness; or
2. conviction of a felony; or

 

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3. the willful violation by the Executive of the provisions of Paragraphs 3, 7
or 8 of this Agreement; or
4. the willful violation of state or federal banking, securities, tax or
financial laws or financial regulations in the operation of Comm Bancorp or the
Bank.
The Executive will be notified in writing of the grounds for termination.
Either Comm Bancorp or the Bank may terminate this Agreement without notice upon
receipt of a final, unappealable written directive or order of any governmental
body or entity having jurisdiction over Comm Bancorp or the Bank, as the case
may be, requiring termination, disciplinary action, a fine, or removal of the
Executive, as an officer or Director or both of Comm Bancorp or the Bank. Such
termination shall be deemed to be termination for cause.
Termination for cause by either Comm Bancorp or the Bank shall be deemed also to
be termination for cause by the other.
D. HEALTH AND GOOD REASON. The Executive may terminate his employment hereunder
(1) if his health should become impaired to an extent that it makes continued
performance of his duties hereunder hazardous to his physical or mental health
or (2) for Good Reason. The term “Good Reason” shall mean (i) any assignment to
the Executive, without his consent, of any duties other than those specifically
contemplated by, Section 2 hereof, (ii) any removal of the Executive from or any
failure to re-elect the Executive to any of the positions indicated in Section 2
hereof, except in connection with termination of the Executive’s employment for
Cause, (iii) failure of either Comm Bancorp or the Bank, as the case may be, to
comply with Section 5 hereof, (iv) any other material breach by either Comm
Bancorp or the Bank of this Agreement,(v) executive decides to retire after
giving Comm Bancorp and the Bank at least 6 months advanced notice in writing
or(vi) any Change in Control (as defined herein).
E. VOLUNTARY RETIREMENT. On or after February 28, 2011, the Executive may retire
from his positions indicated in Section 2 hereof after giving Comm Bancorp and
the Bank at least sixty (60) days notice thereof. The Executive shall be
entitled to the post-retirement benefits as set forth under Section 10 hereof.
Should Executive terminate employment for reasons set forth in Section 9D,
notice thereof shall be given to Comm Bancorp or the Bank prior to thereto and
Comm Bancorp or the Bank shall have thirty (30) days to cure such condition, if
applicable, which precipitated Executive’s

 

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desire to terminate. These reasons set forth in said notice to Comm Bancorp or
the Bank shall thereby be established and fixed as “good reason” as the same is
defined within this contract for any future arbitration or court proceeding
following termination.
10. PAYMENTS UPON TERMINATION/NON-EXTENSION.
A. DEATH OR FOR CAUSE. If the Executive’s employment shall be terminated because
of death or for Cause, Comm Bancorp and the Bank shall pay the Executive his
full Annual Direct Salary through the date of termination at the rate in effect
at the time of termination and in the case of termination because of death, any
other amounts owing to Executive at the time of termination (e.g. reimbursements
and the value of his accrued but unused fringe benefits) and death payments
otherwise thereafter coming due pursuant to Paragraph 5A hereof and neither Comm
Bancorp nor the Bank shall have further obligations to the Executive under this
Agreement, except Executive shall receive all other vested employee benefits to
which Executive may be entitled when due and payable.
B. TERMINATION DUE TO NON-EXTENSION, DISABILITY, GOOD REASON OR VOLUNTARY
RETIREMENT. If Comm Bancorp or the Bank terminates this Agreement because of
non-extension or the disability of the Executive, or, if the Executive
terminates this Agreement because of Good Reason or voluntary retirement, then
Comm Bancorp or the Bank, as the case may be, shall pay to Executive, for sixty
(60) consecutive months or until his death, whichever occurs first (the
“Post-Retirement Period”),the sum of $14,000 per month payable on the last bank
business day of each month in a lump sum as a post-retirement benefit and shall
also pay premiums on a commercially-reasonable comprehensible medical insurance
plan with a then commercially-reasonable deductible or retention of risk
provision during the Post-Retirement Period. The Executive shall also be
entitled to the use of his current executive office suite at the main corporate
office of Comm Bancorp and the Bank and the provision of secretarial support for
a period of twelve (12) months after termination of employment.
C. PAYMENT LIMITATION. If the Executive is a “specified employee” (as such
phrase is defined in Treas. Reg. §1.409A-1(i) (“Specified Employee”) on the
termination date of employment, (a) the Executive shall receive payment of any
lump sum amounts described in this Section 10 on the first day of the seventh
month following such termination date, and (b) to the extent an annuity is
payable to Executive under Section 10, or a benefit is scheduled to commence or
be paid pursuant to Section 10, the commencement date of such benefit shall be
deferred until the first day of the seventh month following such termination
date of employment. The payments to which the Executive would otherwise be
entitled during

 

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the first six months following such termination date shall be accumulated and
paid to the Executive on the first business day of such seventh month and such
amount shall be credited with interest or earnings as provided for under the
relevant underlying plan. If there is no underlying plan or if the underlying
plan does not provide for interest or earnings on deferral amounts, then the
amount deferred under this Section 10C shall be credited with interest at the
applicable federal rate determined under Section 1274 of the Internal Revenue
Code, then in effect. If the Executive is not a Specified Employee on such
termination date, (i) the Executive shall receive payment of the lump sum
amounts described in Section 10 on the 60th day following such termination date
and (ii) the annuity payments provided to the Executive under Section 10 shall
commence on the 60th day following such termination date.
11. DEFINITION OF CHANGE OF CONTROL. A Change of Control shall be deemed to have
occurred when (a) substantially all of Comm Bancorp’s or the Bank’s assets
and/or operations are sold or otherwise disposed of; (b) any person becomes the
beneficial owner directly or indirectly, of securities of Comm Bancorp or the
Bank with a combined voting power in sufficient amount to gain majority control
of either Board of Directors; or (c) at any time during any twenty-four (24)
consecutive months (commencing on March 1, 2010) when a majority of the members
of either Comm Bancorp’s and the Bank’s Board of Directors are individuals who
were not members of the respective Board of Directors at the beginning of such
period, unless such changes result from death or voluntary or
historically-consistent retirement. For purposes of this paragraph, “person and
beneficial owner” shall have the meanings ascribed to them pursuant to the
Securities Exchange Act of 1934, as amended and the regulations promulgated
pursuant thereto. This Paragraph shall be liberally construed in favor of the
Executive.
12. WORK MADE FOR HIRE. Any work performed by the Executive under this Agreement
should be considered a “Work Made for Hire”, as the phrase is defined by the
U.S. patent laws and shall be owned by and for the express benefit of Comm
Bancorp, the Bank and their subsidiaries and affiliates. In the event it should
be established that such work does not qualify as a Work Made for Hire, the
Executive agrees to and does hereby assign to Comm Bancorp, the Bank, and their
affiliates and subsidiaries, all of his rights, title, and/or interest in such
work product, including, but not limited to, all copyrights, patents,
trademarks, and propriety rights. Comm Bancorp and the Bank shall be entitled to
seek injunctive action to enforce this Section 12.

 

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13. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:

     
If to the Executive:
  William F. Farber, Sr.
RR 1 Box 1281
Carbondale, PA. 18407
 
   
with a required copy to:
  Paul Mazzoni, Esquire
Mazzoni & Karam P.C.
321 Spruce Street
Scranton, PA. 18503
 
   
If to Comm Bancorp:
  Comm Bancorp, Inc.
125 North State Street
Clarks Summit, PA 18411
 
   
If to Bank:
  Community Bank and Trust Company
125 North State Street
Clarks Summit, PA 18411
 
   
with a required copy to:
  John B. Lampi, Esquire
Saidis, Flower & Lindsey
2109 Market Street
Camp Hill, PA 17011

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
the Executive, Comm Bancorp and the Bank and their respective heirs, personal
representatives, successors and assigns.
15. ARBITRATION. Comm Bancorp, the Bank and the 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 (except for any enforcement sought
with respect to Sections 7, 8, or 12 of this Agreement which may be litigated in
court, including an action for injunction or other relief) are to be submitted
for resolution, in Scranton, Pennsylvania, to the American Arbitration
Association

 

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(the “Association”) in accordance with the Association’s National Rules for the
Resolution of Employment Disputes or other applicable rules then in effect
(“Rules”). Comm Bancorp, the Bank or the Executive may initiate an arbitration
proceeding at any time by giving notice to the other in accordance with the
Rules. Comm Bancorp, the Bank and the Executive may, as a matter of right,
mutually agree on the appointment of a particular arbitrator from the
Associations’ 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, Comm Bancorp, the Bank and the 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
or any enforcement sought with respect to Sections 7, 8 or 12 of this Agreement,
including an action for injunction or other relief. All costs of the arbitration
shall be borne in equal halves — one-half by Comm Bancorp and the Bank and the
other half by the Executive.
16. VALIDITY. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
17. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties relating to the subject matter hereto and may not be waived, changed,
modified, extended or discharged orally but only by agreement in writing,
consented to in a writing signed by the parties.
18. GOVERNING LAW. This Agreement and the rights and obligations hereunder shall
be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania and the United States of America.
19. RIGHTS AND REMEDIES; NO WAIVER. No course of action between Comm Bancorp,
the Bank and the Executive and no delay or omission of Comm Bancorp, the Bank or
the Executive to exercise any right or power given under this Agreement shall;
(A) impair the subsequent exercise of any right or power, or, (B) be construed
to be a waiver of any default or any acquiescence in or consent to the curing of
any default or of any other right or power that shall have arisen. Every power
and remedy granted by law and by this Agreement to any party may be exercised as
may be deemed expedient.

 

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All such rights and powers shall be cumulative to the fullest extent permitted
by law.
IN WITNESS WHEREOF, the parties have signed and sealed this Agreement the day
and the year first above written.

            COMM BANCORP, INC.
      By:   /s/ John P. Kameen         JOHN P. KAMEEN, Secretary of the        
Board of Directors        COMMUNITY BANK AND TRUST COMPANY
      By:   /s/ John P. Kameen         JOHN P. KAMEEN, Secretary of the        
Board of Directors        Executive
      By:   /s/ William F. Farber, Sr.         William F. Farber, Sr.           
 

 

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