exh101.htm


     

    
      

      

    

    Exhibit
      10.1

     

     

    
      AMENDED
        AND RESTATED EMPLOYMENT AGREEMENT

      


      


      THIS
        AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of
        December 20, 2007 (the “Effective Date’) and is by and between Parkvale
        Financial Corporation (the “Corporation”), a Pennsylvania-chartered corporation,
        Parkvale Savings Bank (the “Bank”), a Pennsylvania-chartered savings bank and a
        wholly owned subsidiary of the Corporation, and Robert J. McCarthy, Jr. (the
        “Executive”).

      


      


      WITNESSETH

      


      WHEREAS,
        the Corporation and the Bank (collectively, the “Employers”) desire to retain
        the services of the Executive on the terms and conditions set forth herein
        and,
        for purpose of effecting the same, the Board of Directors of each of the
        Employers has approved this Agreement and authorized its execution and delivery
        on behalf of the Employers to the Executive;

      


      WHEREAS,
        the Executive has been with the Bank since December 1, 1984 and with the
        Corporation since its formation; is currently employed as the President and
        Chief Executive Officer and member of the Board of Directors of each of the
        Employers; is a highly experienced and knowledgeable executive officer of
        the
        Employers; and is important and essential to the operation and development
        of
        the Employers;

      


      WHEREAS,
        the Bank and the Executive
        have previously entered into an employment agreement originally dated November
        12, 1984 (with the Corporation becoming a party to it in January 1989) and
        amended and restated as of December 15, 2005 (the “Prior
        Agreement”);

      


      WHEREAS,
        the Employers desire to amend
        and restate the Prior Agreement in order to make changes to comply with Section
        409A of the Internal Revenue Code of 1986, as amended, as well as certain
        other
        changes;

      


      WHEREAS,
        the Employers consider the establishment and maintenance of knowledgeable
        and
        vital management to be part of their overall corporate strategy and to be
        essential to protecting and enhancing the best interest of the Employers
        and
        their stockholders; and

      


      WHEREAS,
        the Employers consider the continued services of the Executive to be in the
        best
        interests of the Employers and they desire to induce the Executive to remain
        in
        their employ on an impartial and objective basis and without distraction
        or
        conflict of interest in the event of any attempt to obtain control of the
        Employers.

      


      AGREEMENT:

      


      NOW,
        THEREFORE, intending to be legally bound hereby and in consideration of the
        mutual covenants and agreements herein contained, the parties agree and contract
        as follows:

      


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      1.           
        Employment.  The
        Employers hereby employ the Executive, and the Executive hereby accepts such
        employment, on the terms and conditions set forth in this
        Agreement.

      


      2.           
        Definitions.  The
        following words and terms shall have the meanings set forth below for the
        purposes of this Agreement:

      


      (a)           
        Base
        Salary.  “Base Salary” shall have the meaning set forth in
        Section 5(a) hereof.

      


      (b)           
        Cause. Termination of
        the Executive’s employment for “Cause” shall mean termination because (i) the
        Executive intentionally engages in dishonest conduct in connection with his
        performance of services for the Corporation or the Bank resulting in his
        conviction of a felony; (ii) the Executive is convicted of, or pleads guilty
        or
nolo contendere to, a
        felony or any crime involving moral turpitude; (iii) the Executive willfully
        fails or refuses to perform his duties under this Agreement and fails to
        cure
        such breach within fifteen (15) days following written notice thereof from
        the
        Corporation or the Bank; (iv) the Executive breaches his fiduciary duties
        to the
        Corporation or the Bank for personal profit; or (v) the Executive willfully
        breaches or violates any law, rule or regulation (other than traffic violations
        or similar offenses), or final cease and desist order in connection with
        his
        performance of services for the Corporation or the Bank, and fails to cure
        such
        breach or violation within fifteen (15) days following written notice thereof
        from the Corporation or the Bank.  For purposes of this section, no
        act or failure to act on the part of the Executive shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in bad faith or
        without reasonable belief that the Executive=s
        action or
        omission was in the best interests of the Corporation or the
        Bank.  Any act, or failure to act, based upon authority given pursuant
        to a resolution duly adopted by the Boards or based upon the written advice
        of
        counsel for the Corporation or the Bank shall be conclusively presumed to
        be
        done, or omitted to be done, by the Executive in good faith and in the best
        interests of the Corporation or the Bank.  Notwithstanding the
        foregoing, the Executive shall not be deemed to have been terminated for
        Cause
        without (i) reasonable written notice to the Executive setting forth the
        reasons
        for the Employers’ intention to terminate for Cause, (ii) an opportunity for the
        Executive, together with his counsel, to be heard before the Boards of
        Directors  of the Employers, and (iii) thereafter delivery to the
        Executive of a Notice of Termination from the Boards of Directors of the
        Employers finding that, in the good faith opinion of such Boards upon vote
        of at
        least 75% of the members of each Board, the Executive was guilty of conduct
        set
        forth above.

      


      (c)           
        Change in
        Control.  “Change in Control” shall mean a change in the
        ownership of the Corporation or the Bank, a change in the effective control
        of
        the Corporation or the Bank or a change in the ownership of a substantial
        portion of the assets of the Corporation or the Bank, in each case as provided
        under Section 409A of the Code and the regulations thereunder.

      


      (d)           
        Code.  “Code”
shall mean the Internal
        Revenue Code of 1986, as amended.

      


      (e)           
        Date of
        Termination.  “Date of Termination” shall mean (i) if the
        Executive’s employment is terminated for Cause, the date on which the Notice of
        Termination is given, and (ii) if the Executive’s employment is terminated for
        any other reason, the date specified in the Notice of Termination.

      


      
        
          
          

        

        
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      (f)           
        Disability.  “Disability”
shall mean the Executive:
        (i) is unable to engage in any substantial gainful
        activity by reason of any medically determinable physical or mental impairment
        which can be expected to result in death or can be expected to last for a
        continuous period of not less than 12 months, or (ii) is, by reason of any
        medically determinable physical or mental impairment which can be expected
        to
        result in death or can be expected to last for a continuous period of not
        less
        than 12 months, receiving income replacement benefits for a period of not
        less
        than three months under an accident and health plan covering employees of
        the
        Employers.

      


      (g)           
        FDIC.  “FDIC”
shall mean the Federal
        Deposit Insurance Corporation.

      


      (h)           
        Good
        Reason.  Termination by the Executive of the Executive’s
        employment for “Good Reason” shall mean termination by the Executive based upon
        the occurrence of any of the following events:

      


      (i)
        any
        material breach of this Agreement by the Employers, including without limitation
        any of the following: (A) a material diminution in the Executive’s base
        compensation, (B) a material diminution in the Executive’s authority, duties or
        responsibilities as prescribed in Section 2, or (C) any requirement that
        the
        Executive report to a corporate officer or employee of the Employers instead
        of
        reporting directly to the Boards of Directors of the Employers, or

      


      (ii)
        any
        material change in the geographic location at which the Executive must perform
        his services under this Agreement;

      


      provided,
        however, that prior to any termination of employment for Good Reason, the
        Executive must first provide written notice to the Employers within ninety
        (90)
        days of the initial existence of the condition, describing the existence
        of such
        condition, and the Employers shall thereafter have the right to remedy the
        condition within thirty (30) days of the date the Employers received the
        written
        notice from the Executive.  If the Employers remedy the condition
        within such thirty (30) day cure period, then no Good Reason shall be deemed
        to
        exist with respect to such condition.  If the Employers do not remedy
        the condition within such thirty (30) day cure period, then the Executive
        may
        deliver a Notice of Termination for Good Reason at any time within sixty
        (60)
        days following the expiration of such cure period.

      


      (i)           
        IRS.  “IRS”
shall mean the Internal
        Revenue Service.

      


      (j)           
        Notice of
        Termination.  Any purported termination of the Executive’s
        employment by the Employers for any reason, including without limitation
        for
        Cause, Disability or Retirement, or by the Executive for any reason, including
        without limitation for Good Reason, shall be communicated by a written “Notice
        of Termination” to the other party hereto.  For purposes of this
        Agreement, a “Notice of Termination” shall mean a dated notice which (i)
        indicates the specific termination provision in this Agreement relied upon,
        (ii)
        sets forth in reasonable detail the facts and circumstances claimed to provide
        a
        basis for termination of the Executive’s employment under the provision so
        indicated, (iii) specifies a Date of Termination, which shall be not less
        than
        thirty (30) nor more than ninety (90) days after such Notice of Termination
        is
        given, except in the case of the Employers’ termination of Executive’s
        employment for Cause, which shall be effective immediately; and (iv) is given
        in
        the manner specified in Section 13 hereof.

      


      
        
          
          

        

        
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      (k)           
        Parachute Payment. The
        term “Parachute Payment” has the meaning set forth in Section 280G of the Code
        and applicable Treasury regulations.

      


      (l)           
        Retirement.  “Retirement”
shall mean voluntary
        termination by the Executive in accordance with the
        Employers’ retirement policies, including early retirement, generally applicable
        to their salaried employees.

      


      3.           
        Position and
        Duties.  During the term of this Agreement, the Executive
        agrees to serve as the President and Chief Executive Officer and a member
        of the
        Board of Directors of each of the Employers and shall perform such managerial
        duties and responsibilities for the Employers as the Boards of Directors
        of the
        Employers may direct in accordance with the respective bylaws of the Employers,
        which duties and responsibilities shall be of substantially the same character
        as or equivalent character to those required by the Executive’s position on the
        Effective Date.  Throughout the term of this Agreement, and except for
        illness, vacation periods and leaves of absence granted by the Employers
        (if
        any), the Executive shall devote all his business time, attention, skill
        and
        efforts to the faithful performance of his duties hereunder.

      


      4.           
        Term of Employment.
Unless extended
        as provided in this Section 4, this Agreement shall
        terminate five years after January 1, 2008.  Prior to January 1, 2009
        and each January 1st thereafter, the Boards of Directors of the Employers
        shall
        consider, review (with appropriate corporate documentation thereof, and taking
        into account all relevant factors, including the Executive’s performance) and,
        if appropriate, explicitly approve a one-year extension of the remaining
        term of
        this Agreement.  The term of this Agreement shall continue to extend
        each January 1st if the Boards of Directors so approve such extension unless
        the
        Executive gives written notice to the Employers of the Executive’s election not
        to extend the term, with such notice to be given not less than 30 days prior
        to
        any such January 1st.  If any party gives timely notice that the term
        will not be extended as of any January 1st, then this Agreement shall terminate
        at the conclusion of its remaining term.  References herein to the
        term of this Agreement shall refer both to the initial term and successive
        terms.  The last day of the term of this Agreement, as from time to
        time extended, is hereinafter referred to as the “Expiration Date.”

      


      5.           
        Compensation and Benefits.

      


      (a)           
        The Employers shall compensate and pay the Executive for his services during
        the
        term of this Agreement a minimum salary of $375,000 per year as of the date
        of
        restatement of this Agreement, which may be increased from time to time in
        such
        amounts as may be determined by the Boards of Directors of the Employers
        and may
        not be decreased without the Executive’s express written consent (hereinafter
        referred to as the Executive’s “Base Salary”).  Such salary shall be
        payable in semi-monthly installments or in such other manner as determined
        in
        accordance with the Employers’ policies.  In addition, the Executive
        may receive bonus payments when, as and if determined by the Boards of Directors
        of the Employers.

      


      
        
          
          

        

        
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      (b)           
        During the term of this Agreement, the Executive shall be entitled to
        participate in and receive the benefits of all of the Employers’ normal employee
        benefit plans and arrangements in effect from time to time, including without
        limitation the following: any pension or other retirement benefit plan; profit
        sharing plan; stock option plans; employee stock ownership plan; medical,
        dental
        (if any) and hospitalization coverage (family coverage); travel accident
        insurance; long-term disability income insurance; group life insurance; and
        thrift plans.  The Employers shall not make any changes in such plans,
        benefits or privileges which would adversely affect the Executive’s rights or
        benefits thereunder, unless such change does not result in an overall reduction
        in the level of benefits to the Executive below the level of benefits provided
        to the Executive as of the Effective Date.  Nothing paid to the
        Executive under any plan or arrangement presently in effect or made available
        in
        the future shall be deemed to be in lieu of the salary payable to the Executive
        pursuant to Section 5(a) hereof.

      


      (c)           
        During the term of this Agreement, the Executive shall be entitled to paid
        annual vacation in accordance with the policies as established from time
        to time
        by the Board of Directors of the Employers, provided, however, that in no
        event
        shall the amount of annual vacation be less than six weeks per annum. The
        paid
        vacation time shall be taken at such times as the Executive elects in his
        discretion, and the Executive may accumulate unused vacation time from one
        year
        to the next, unless otherwise limited by the Boards of Directors of the
        Employers. The Executive shall also be entitled to all paid holidays provided
        by
        the Employers.

      


      (d)           
        During the term of this Agreement, in keeping with past practices, the Employers
        shall continue to provide the Executive with an automobile leased or purchased
        by the Employers for the Executive. The Employers shall be responsible and
        shall
        pay for all costs of insurance coverage, repairs, maintenance and other
        incidental expenses, including license, fuel and oil. The Employers shall
        provide the Executive with a replacement automobile of a similar type as
        selected by the Executive at approximately the time that his present automobile
        reaches three years of age and approximately every three years thereafter,
        upon
        the same terms and conditions.

      


      (e)           
        During the term of this Agreement, in keeping with past practices, the Employers
        shall pay the Executive’s dues for membership in a country club located in the
        Pittsburgh metropolitan area, which country club the Executive has the right
        to
        choose.  If the costs of the club memberships are paid in the first
        instance by the Executive, the Employers shall reimburse the Executive
        therefor.  Such reimbursement shall be paid promptly by the Employers
        and in any event no later than March 15 of the year immediately following
        the
        year in which such costs were paid by the Executive.

      


      (f)           
        In the event of the Executive’s death during the term of this Agreement, the
        Employers shall pay to the Executive’s spouse, estate, legal representative or
        other named beneficiaries (as directed by the Executive in writing) on a
        semi-monthly basis the Executive’s Base Salary at the rate in effect at the
        time of the Executive’s death for a period of one year from the date of death
        and, in addition, the Employers shall continue to provide medical, dental
        (if
        any) and hospitalization coverage (family coverage if there are dependents)
        until the semi-monthly payments cease.

      


      
        
          
          

        

        
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      (g)           
        In the event of termination by the Employers of the Executive’s employment based
        on Disability (as defined herein), the Employers shall pay the Executive
        a
        disability benefit which is equal to the Base Salary and benefits provided
        in
        Sections 5(a), (b), (d) and (e) hereof, as the same may have been increased
        from
        time to time, to the Executive at the commencement of the Executive’s total
        disability, reduced by the sum of (i) the amount of any benefits to which
        the
        Executive may be entitled with respect to the same period under any disability
        plan and (ii) the disability benefits payable under any government regulated
        plan, including workers’ compensation benefits.  Payment of such
        disability benefit shall commence with the week coincident with the termination
        of the Executive’s employment under this Agreement and shall continue until the
        earlier of the Expiration Date or the Executive’s death.  During any
        period the Executive shall be entitled to receive disability payments from
        the
        Employers, to the extent that he is physically and mentally able to do so,
        he
        shall furnish information and assistance to the Employers and, in addition,
        upon
        reasonable request in writing from time to time, he shall make himself available
        to the Employers to undertake reasonable assignments with the dignity,
        importance, and scope of his prior position and his physical and mental
        health.

      


      6.           
        Expenses.  The
        Employers shall reimburse the Executive or otherwise provide for or pay for
        all
        reasonable expenses incurred by the Executive in furtherance of or in connection
        with the business of the Employers, including, but not by way of limitation,
        automobile and traveling expenses, and all reasonable entertainment expenses
        (whether incurred at the Executive’s residence, while traveling or otherwise),
        subject to such reasonable documentation and other limitations as may be
        established by the Boards of Directors of the Employers.  If such
        expenses are paid in the first instance by the Executive, the Employers shall
        reimburse the Executive therefor.  Such reimbursement shall be paid
        promptly by the Employers and in any event no later than March 15 of the
        year
        immediately following the year in which such expenses were
        incurred.

      


      7.           
        Termination.

      


      (a)           
        The Employers shall have the right, at any time upon prior Notice of
        Termination, to terminate the Executive’s employment hereunder for any reason,
        including without limitation termination for Cause, Disability or Retirement,
        and the Executive shall have the right, upon prior Notice of Termination,
        to
        terminate his employment hereunder for any reason.

      


      (b)           
        In the event that (i) the Executive’s employment is terminated by the Employers
        for Cause, Disability or Retirement or in the event of the Executive’s death, or
        (ii) the Executive terminates his employment hereunder other than for Good
        Reason, the Executive shall have no right pursuant to this Agreement to
        compensation or other benefits for any period after the applicable Date of
        Termination other than as enumerated in Sections 5(f) and 5(g) of this
        Agreement.

      


      
        
          
          

        

        
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      (c)           
        In the event that (i) the Executive’s employment is terminated by the Employers
        for other than Cause, Disability, Retirement or the Executive’s death or (ii)
        such employment is terminated by the Executive for Good Reason, then the
        Employers shall:

      


      (A)           
        pay to the Executive, in a lump sum cash payment within five business days
        following the Date of Termination, a cash severance amount equal to 2.99
        multiplied by the sum of the following: (i) the Executive=s
        then
        current Base Salary per annum, (ii) the highest incentive compensation or
        bonus
        paid to the Executive during the three calendar years preceding the year
        in
        which the termination of employment occurs, including any amounts deferred
        by
        the Executive, (iii) the average of the Employers=
        contributions to the Executive=s
        accounts
        under the Employers=
        401(k)
        Plan, Executive Deferred Compensation Plan (excluding any elective deferrals
        by
        the Executive), Employee Stock Ownership Plan and Supplemental Executive
        Benefit
        Plan for the three calendar years preceding the year in which the termination
        of
        employment occurs, and (iv) the average of all other components of the
        Executive=s
        taxable
        income reported in Box 1 of Form W-2 from the Employers for the three calendar
        years preceding the year in which the termination of employment occurs, except
        that any items of income which are deferred in one year and subsequently
        taken
        into income in a subsequent year shall be excluded in the year taken into
        income
        for purposes of determining the Executive=s
        taxable
        income for such year;

      


      (B)           
        maintain and provide for a period ending on the Expiration Date in effect
        prior
        to the Notice of Termination, at no cost to the Executive, the Executive’s
        continued participation in all life, disability and medical insurance plans
        in
        which the Executive was participating immediately prior to the Date of
        Termination; provided that any insurance premiums payable by the Employers
        or
        any successors pursuant to this Section 7(c)(B) shall be payable at such
        times
        and in such amounts (except that the Employers shall also pay any employee
        portion of the premiums) as if the Executive was still an employee of the
        Employers, subject to any increases in such amounts imposed by the insurance
        company or COBRA, and the amount of insurance premiums required to be paid
        by
        the Employers in any taxable year shall not affect the amount of insurance
        premiums required to be paid by the Employers in any other taxable year;
        and
        provided further that if the Executive’s participation in any group insurance
        plan is barred, the Employers shall either arrange to provide the Executive
        with
        insurance benefits substantially similar to those which the Executive was
        entitled to receive under such group insurance plan or, if such coverage
        cannot
        be obtained, pay a lump sum cash equivalency amount within thirty (30) days
        following the Date of Termination based on the annualized rate of premiums
        being
        paid by the Employers as of the Date of Termination; and

      


      (C)           
        pay to the Executive, in a lump sum within thirty (30) days following the
        Date
        of Termination, a cash amount equal to the projected cost to the Employers
        of
        providing benefits to the Executive until the Expiration Date in effect prior
        to
        the Notice of Termination pursuant to any other employee benefit plans, programs
        or arrangements offered by the Employers in which the Executive was entitled
        to
        participate immediately prior to the Date of Termination (including the use
        of
        an automobile and club dues but excluding benefits covered by subsection
        (A)
        above and excluding stock benefit plans of the Employers), with the projected
        cost to the Employers to be based on the costs incurred for the calendar
        year
        immediately preceding the year in which the Date of Termination occurs and
        with
        any automobile-related costs to exclude any depreciation on Bank-owned
        automobiles.

      


      
        
          
          

        

        
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      8.           
        Certain Supplemental Payments
        by the Corporation.

      


      (a)           
        In the event it is determined that part or all of the compensation and benefits
        to be paid to the Executive in connection with or following a Change in Control,
        whether or not payable hereunder, (i) constitute AParachute
        Payments@
        under
        Section 280G of the Code (the “Payments”), and (ii) exceed one hundred and five
        percent (105%) of three times the Executive=s
        Base
        Amount, then the Corporation, on or before the date for payment of such excise
        tax, shall pay to or on behalf of the Executive, in a lump sum, an amount
        (the
“Gross-Up Amount”) such that, after payment of all federal, state and local
        income or employment-related tax (including Social Security and Medicare
        taxes,
        and reflecting the phase-out of deductions and the Executive=s
        ability to
        deduct certain of such taxes) and any additional excise tax under Section
        4999
        of the Code in respect of the Gross-Up Amount payment, the Executive will
        be
        fully reimbursed for the amount of such excise tax. If the Payments equal
        three
        times the Executive=s
        Base
        Amount or exceed three times the Executive=s
        Base
        Amount, but by an amount less than five percent (5%) of three times the Base
        Amount, then the cash payments shall be reduced by the least amount necessary
        to
        bring such Payments below three times the Executive=s
        Base
        Amount. As used in this Agreement, ABase
        Amount@
        means an amount equal to the Executive=s
        Annualized
        Includable Compensation for the Base Period as such terms are defined in
        Sections 280G(d)(1) and (2) of the Code.

       

      (b)           
        The determination of the Parachute Payments, the Base Amount and the Gross-Up
        Amount, as well as any other calculations necessary to implement this
        Section 8, shall be made by Elias, Matz, Tiernan & Herrick L.L.P.,
        unless the Executive and the Corporation agree otherwise. Such firm=s
        fee shall
        be paid by the Corporation.

      


      (c)           
        As promptly as practicable following the determinations under Sections 8(a)
        and
        8(b) above, and in no event more than thirty (30) days after the Date of
        Termination, the Corporation shall pay to or distribute to or for the benefit
        of
        the Executive such amounts as are then due to the Executive under this Agreement
        and shall promptly pay to or distribute for the benefit of the Executive
        in the
        future such amounts as become due to the Executive under this
        Agreement.

       

      (d)           
        As a result of the uncertainty in the application of Section 280G of the
        Code at
        the time of an initial determination hereunder, it is possible that payments
        will not have been made by the Corporation which should have been made under
        clause (a) of this Section 8 (“Underpayment”).  In the event that
        there is a final determination by the Internal Revenue Service (the “IRS”), or a
        final determination by a court of competent jurisdiction, that an Underpayment
        has been made and the Executive thereafter is required to make any payment
        of an
        excise tax, income tax, any interest or penalty, then the firm selected under
        clause (b) above shall determine the amount of the Underpayment that has
        occurred and any such Underpayment shall be promptly paid by the Corporation
        (and in no event more than sixty (60) days after the date of the IRS or court
        determination) to or for the benefit of the Executive.  If and to the
        extent that the Executive receives any tax refund from the Internal Revenue
        Service that is attributable to payments by the Corporation pursuant to this
        Section 8 of amounts in excess of the actual Gross-Up Amount as finally
        determined by the IRS or a court of competent jurisdiction (“Overpayment”), then
        the Executive shall promptly pay (and in no event more than sixty (60) days
        after the date of the IRS or court determination) to the Corporation the
        amount
        of such refund that is attributable to the Overpayment (together with any
        interest paid or credited thereon after taxes applicable thereto); provided,
        however, the Executive shall not have any obligation to pay the Corporation
        any
        amount pursuant to this Section 8(d) if and to the extent that any such
        obligation would cause the arrangement to be treated as a loan or extension
        of
        credit prohibited by applicable law.

       

      
        
          
          

        

        
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      9.           
        Mitigation; Exclusivity of Benefits.

      


      (a)           
        The Executive shall not be required to mitigate the amount of any benefits
        hereunder by seeking other employment or otherwise, nor shall the amount
        of any
        such benefits be reduced by any compensation earned by the Executive as a
        result
        of employment by another employer after the Date of Termination or
        otherwise.

      


      (b)           
        The specific arrangements referred to herein are not intended to exclude
        any
        other benefits which may be available to the Executive upon a termination
        of
        employment with the Employers pursuant to employee benefit plans of the
        Employers or otherwise.

      


      10.           
        Withholding.  All
        payments required to be made by the Employers hereunder to the Executive
        shall
        be subject to the withholding of such amounts, if any, relating to tax and
        other
        payroll deductions as the Employers may reasonably determine should be withheld
        pursuant to any applicable law or regulation.

      


      11.           
        Restrictive
        Covenant.  During the Executive’s employment hereunder, the
        Employers, in addition to all other remedies provided herein, shall be entitled
        to an injunction restraining the Executive from owning, managing, operating
        and
        controlling, being employed by or participating in or being in any way so
        connected with any business similar to the business of the Employers within
        the
        Employers’ market areas.  Market areas shall include the Pennsylvania
        counties of Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and
        Westmoreland, together with any other counties within Pennsylvania, Ohio
        or West
        Virginia in which the Bank has an office. The business of the Employers shall
        mean any business in which depositors are covered by FDIC
        insurance.  In the event of any actual or threatened breach by the
        Executive of the provisions of this paragraph, the Employers shall be entitled
        to an injunction restraining the Executive from owning, managing, operating
        and
        controlling, being employed by or participating in or being in any way connected
        with any business similar to the business of the Employers covered by FDIC
        insurance.  For purposes of this Agreement, “owning” shall not include
        the ownership of 1% or less of the stock of a public
        corporation.  Nothing herein stated shall be construed as prohibiting
        the Employers from pursuing any other remedies available to them for such
        breach
        or threatened breach, including the recovery of damages.  This Section
        11 shall terminate and be of no force and effect upon a Change in
        Control.

      


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      12.           
        Successors; Binding Agreement.

      


      (a)           
        The Employers will require any successor (whether direct or indirect, by
        purchase, merger, consolidation or otherwise) to all or substantially all
        of the
        business and/or assets of the Employers to expressly assume and agree (by
        agreement in form and substance satisfactory to the Executive) to perform
        this
        Agreement in the same manner and to the same extent that the Employers would
        be
        required to perform it if no such succession had taken place. Failure of
        the
        Employers to obtain such agreement prior to the effectiveness of any such
        succession shall be a breach of this Agreement and shall entitle the Executive
        to compensation from the Employers in the same amount and on the same terms
        as
        he would be entitled to hereunder if he terminated his employment for Good
        Reason, except that for purposes of implementing the foregoing, the date
        on
        which any such succession becomes effective shall be deemed, without further
        notice, the Date of Termination.

      


      (b)           
        This Agreement and all rights of the Executive hereunder shall inure to the
        benefit of and be enforceable by the Executive’s personal or legal
        representatives, executors, administrators, successors, heirs, distributees,
        devisees and legatees.  If the Executive dies during the term of this
        Agreement, the benefits specified in Section 5(f) of this Agreement shall
        be
        paid to the Executive’s designated beneficiaries.

      


      13.           
        Notice.  For
        the purposes of this Agreement, notices and all other communications provided
        for in this Agreement shall be in writing and shall be deemed to have been
        duly
        given when delivered or mailed by certified or registered mail, return receipt
        requested, postage prepaid, addressed to the respective addresses set forth
        below, or to such other address as any party may have furnished to the other
        in
        writing in accordance herewith, except that notices of change of address
        shall
        be effective only upon receipt.

      


      
        	
                To
                  the Employers:

              	
                Parkvale
                  Financial Corporation

              
	 	
                Parkvale
                  Savings Bank

              
	 	
                4220
                  William Penn Highway

              
	 	
                Monroeville,
                  Pennsylvania  15146

              
	 	 
	
                To
                  the Executive:

              	
                Robert
                  J. McCarthy, Jr.

              
	 	
                At
                  the address last appearing on the

              
	 	
                personnel
                  records of the Employers

              


      

      


      14.           
        Amendment;
        Waiver.  No provisions of this Agreement may be modified,
        waived or discharged unless such waiver, modification or discharge is agreed
        to
        in writing signed by the Executive and such officer or officers as may be
        specifically designated by the Board of Directors of the Employers to sign
        on
        its behalf; provided, however, that if the Employers determine, after a review
        of the final regulations issued under Section 409A of the Code and all
        applicable Internal Revenue Service guidance, that this Agreement should
        be
        further amended to avoid triggering the tax and interest penalties imposed
        by
        Section 409A of the Code, the Employers may amend this Agreement to the extent
        necessary to avoid triggering the tax and interest penalties imposed by Section
        409A of the Code.   No waiver by any party hereto at any time of
        any breach by any other party hereto of, or compliance with, any condition
        or
        provision of this Agreement to be performed by such other party shall be
        deemed
        a waiver of similar or dissimilar provisions or conditions at the same or
        at any
        prior or subsequent time.

      


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      15.           
        Governing Law. This
        Agreement has been executed and delivered in the Commonwealth of Pennsylvania
        and  its validity, interpretation,  performance
        and  enforcement  shall be governed by and construed in
        accordance with the laws thereof applicable to contracts executed and to
        be
        wholly performed in Pennsylvania, except to the extent that federal law
        controls.

      


      16.           
        Nature of
        Obligations.  Nothing contained herein shall create or require
        the Employers to create a trust of any kind to fund any benefits which may
        be
        payable hereunder, and to the extent that the Executive acquires a right
        to
        receive benefits from the Employers hereunder, such right shall be no greater
        than the right of any unsecured general creditor of the Employers.

      


      17.           
        Interpretation.  If
        any provision of this Agreement shall be the subject of a dispute between
        the
        Employers and the Executive and a court or arbitrator to which such dispute
        has
        been brought shall be unable to resolve which of two reasonable interpretations
        of such provision is the proper interpretation thereof, then the interpretation
        most favorable to the Executive shall control.

      


      18.           
        Changes in Statutes or
        Regulations. If any statutory or regulatory provision referenced herein
        is subsequently changed or re-numbered, or is replaced by a separate provision,
        then the references in this Agreement to such statutory or regulatory provision
        shall be deemed to be a reference to such section as amended, re-numbered
        or
        replaced.

      


      19.           
        Headings.  The
        section headings contained in this Agreement are for reference purposes only
        and
        shall not affect in any way the meaning or interpretation of the terms of
        this
        Agreement.

      


      20.           
        Validity.  The
        invalidity or unenforceability of any provision or 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.

      


      21.           
        Prior
        Agreements.  This Agreement constitutes the entire agreement
        and understanding between the parties with respect to the subject matter
        hereof
        and supersedes all prior and contemporaneous agreements and understandings
        and
        any and all prior employment agreements between the Employers and the Executive,
        including but not limited to the Prior Agreement.

      


      22.           
        Counterparts.  This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original but all of which together will constitute one and
        the
        same instrument.

      


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      23.           
        Regulatory
        Prohibition.  Notwithstanding any other provision of this
        Agreement to the contrary, any payments made to the Executive pursuant to
        this
        Agreement, or otherwise, are subject to and conditioned upon their compliance
        with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. §1828(k)) and
        the regulations promulgated thereunder, including 12 C.F.R. Part
        359.

      


      IN
        WITNESS WHEREOF, this Agreement has been executed as of the date first written
        above.

      


      
        	
                Attest:

              	 	
                PARKVALE
                  FINANCIAL CORPORATION

              
	 	 	 
	
                /s/
                  Deborah M. Cardillo

              	 	By: 	
                /s/
                  Robert D. Pfishner

              
	
                Deborah
                  M. Cardillo, Corporate Secretary

              	 	 	
                Robert
                  D. Pfischner

              
	 	 	 	
                Chairman
                  of the Board

              
	 	 	 
	
                Attest:

              	 	
                PARKVALE
                  SAVINGS BANK

              
	 	 	 
	
                /s/
                  Deborah M. Cardillo

              	 	By: 	
                /s/
                  Robert D. Pfischner

              
	
                Deborah
                  M. Cardillo, Corporate Secretary

              	 	 	
                Robert
                  D. Pfischner

              
	 	 	 	
                Chairman
                  of the Board

              
	 	 	 
	
                Witness:

              	 	
                ROBERT
                  J. MCCARTHY, JR.

              
	 	 	 
	
                /s/
                  Deborah M. Cardillo

              	 	By: 	
                /s/
                  Robert J. McCathy, Jr.

              
	
                Deborah
                  M. Cardillo, Corporate Secretary

              	 	 	
                Robert
                  J. McCarthy, Jr.,
                  Individually

              


      

    

     

     

    
      
        
        

      

      
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