Document:

exv10w27

 

Exhibit 10.27

August 23, 2007

Mr. Lawrence Molloy

5260 Harvest Glen Drive

Glen Allen, VA 23059

Dear Chip,

          PetSmart is always looking to hire the best people, and we believe you would be a great fit
for our Senior Vice President and Chief Financial Officer position. We also know it is our people
who make the difference and ensure the continuing success of our company. That is why we are
excited to officially offer this position to you.

          If you decide to accept our offer, your tentative start date will be Monday, September 24,
2007. Once you accept, your appointment would require action by the company Board of Directors
which we would seek through a unanimous written consent. We will advise you when that is obtained.

          At that point, you should plan to report to the receptionist in our lobby at 8:30 a.m. on
Monday, September 24, 2007.

	 	1.	 	As Senior Vice President and Chief Financial Officer, you will work at 19601 N.
27th Avenue, Phoenix, AZ 85027, and perform the duties customarily associated
with this position, including but not limited to such duties as may be assigned to you by
Philip Francis, Chief Executive Officer and others as appropriate. Of course, the Company
may change your position, duties, and work location from time to time, as it deems
necessary.
	 
	 	2.	 	This is a grade level 62 position, and your initial base salary will be $350,000.00
per year, less standard deductions and withholdings, paid biweekly.
	 
	 	3.	 	You are eligible to participate in the Executive Short Term Incentive Plan (“ESTIP”).
Your target incentive is 50% of your actual earned salary for the Fiscal Year. For
Fiscal Year 2007, you will be paid the greater of your prorated actual earned bonus or
$100,000.00. In order to be eligible for this bonus, we require you still be employed
with PetSmart at the end of the fiscal year or as designated by the ESTIP document.
PetSmart may modify compensation and benefits from time to time, as it deems necessary and
Board approval is necessary prior to any bonus award.
	 
	 	4.	 	After commencement of your employment with PetSmart, Inc. and subject to your
appointment by the Board, you will be eligible to receive an equity grant with a value
equal to approximately $646,500.00 for 2007. This value is equal to a full year 2007
grant. This grant will be composed of a mix of stock options and restricted stock. The
number of shares you receive will be based on the closing market value of PetSmart stock
on the date of grant and the current binomial value utilized by the company. The strike
price of the stock option portion of the grant is not determined by the hire date but by
the grant date approved by the Board or its delegee. For you, that date will be September
1, 2007, or your first day of employment, whichever is later. This grant will vest and be
otherwise governed by the terms of the Company’s Equity Incentive Plan. In accordance
with the Equity Incentive

 

 

	 	 	 	Plan, you may receive annual equity grants subject to Board approval. The Company reserves
the right to modify, amend, or withdraw the Plan.
	 
	 	5.	 	You will receive relocation benefits for your move from Glen Allen, Virginia, to the
Phoenix, Arizona, metropolitan area, under the terms of the PetSmart Officer Relocation
Policy. You understand and agree that if you voluntarily terminate employment or are
terminated for cause prior to the expiration of the two-year period, you must repay 100%
of all relocation expenses previously reimbursed or paid by PetSmart if you leave during
the first year, and all incurred costs on a prorated basis during the second year. Any
sums you owe under this agreement may be deducted from your final paycheck or from any
other sums otherwise payable to you by PetSmart.
	 
	 	6.	 	In addition to your salary and incentive compensation, you will be eligible for the
following Company benefits consistent with Company policy: 160 hours of vacation per year
as well as health, life and disability insurance pursuant to the PetSmart, Inc.
SmartChoices Benefits Plan. You are eligible for these benefits on the first day of the
month following your hire date. Details about these benefits are provided in the
Associate Handbook and Summary Plan Descriptions. You will also be eligible to
participate in the Company’s 401(k), Employee Stock Purchase Plan, Deferred Compensation
Plan and Executive Choice Program, as may be modified from time to time with the approval
of the Company’s Board of Directors. The Executive Choice Program offers benefits up to
an annual value of $20,000, which includes reimbursement for expenses related to financial
and estate planning, tax preparation and insurance supplements. This benefit is prorated
in the first year of employment. In addition, you are eligible for the annual Executive
Physical Program. Details and eligibility on these plans are attached. The Company
reserves the right to modify your compensation and benefits from time to time, as it deems
necessary.
	 
	 	7.	 	You will be expected to abide by all of the Company’s policies and procedures. As a
further condition of your employment, you agree to refrain from any unauthorized use or
disclosure of the Company’s proprietary or confidential information or materials. You
also agree to sign and comply with the Company’s Confidentiality Agreement, Non-Compete
Agreement, and Code of Business and Ethics and Policies. By accepting this offer, you are
representing that you are not a party to any agreement (e.g., a non-compete) with any
third party or prior employer, which would conflict with or inhibit your performance of
your duties with PetSmart.
	 
	 	8.	 	In the event of a dissolution, liquidation or sale of substantially all of the assets
of the Company or a merger or consolidation in which the Company is not the surviving
corporation and where your employment is terminated as a result of this change of control
all of your non-vested equity will become vested pursuant to the Amended and Restated
Executive Change in Control and Severance Benefit Plan (“ECC Plan”). Further details
regarding this change will be included in your stock option grant, which will be issued to
you after your employment begins. Upon your acceptance of this offer of employment and
your appointment by the Board of Directors, this will serve as your official notice that
you will be a Participant in the ECC Plan upon your first date of employment with the
company.
	 
	 	9.	 	Either you or the Company may terminate your employment relationship at any time for
any reason whatsoever, with or without cause or advance notice. If the Company terminates
your employment without cause at any time after the first year of employment, the Company
will pay you, as the only severance compensation, a cash payment in the amount of 18
months of your base salary, subject to standard payroll deductions and withholdings, or as
otherwise provided in the ECC Plan. If a termination without cause take place during the
first year that benefit is reduced by 50%. If you resign or your employment is terminated
for cause, all compensation and benefits will cease immediately and you will receive no
severance benefits.

 

 

	 	10.	 	This letter constitutes the complete, final and exclusive embodiment of the entire
agreement between you and PetSmart with respect to the terms and conditions of your
employment. In entering this agreement, neither party is relying on any promise or
representation, written or oral, other than those expressly contained herein, and this
agreement supersedes any other such promises, representations or agreements.
	 
	 	 	 	The terms set forth in this letter may not be amended or modified except in a written
agreement signed by you and a duly authorized Company officer. As required by law, this
offer of employment is subject to proof of your right to work in the United States. This
offer is also subject to your submitting to a mandatory drug test, the completion of a
background check, the results of which must be satisfactory to the Company, in its sole
discretion, and your appointment by the company Board of Directors. The results of the drug
test or the background check may, at the Company’s sole discretion, disqualify you from
employment with the Company.
	 
	 	11.	 	To ensure rapid and economical resolution of any disputes which may arise under this
agreement and any disputes relating to your employment, you and the Company agree that any
and all disputes or controversies of any nature whatsoever, regarding the interpretation,
performance, enforcement or breach of the Agreement, or your employment with PetSmart
shall be resolved in Phoenix, Arizona, by confidential, final and binding arbitration
(rather than trial by jury or court or resolution in some other forum) under the then
existing rules of the American Arbitration Association.

          We are looking forward to you accepting our offer as described above. Please sign below and
at your earliest convenience return this letter to: Francesca Spinelli, SVP People 19601 N.
27th Avenue, Phoenix, Arizona 85027. If you prefer to fax a copy prior to sending the
hard copy, you may fax it to 623-580-6164. I look forward to our being able to recommend that our
Board appoint you to this position and to you joining the PetSmart team. I am confident you will
find challenge, satisfaction, and opportunity at PetSmart.

	 	 	 	 	 	 	 
	 

	 	 	 	Very truly yours,
	 	 
	 
	 

	 	 	 	PetSmart, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Francesca Spinelli	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Francesca Spinelli	 	 
	 

	 	 	 	Senior Vice President, People	 	 
	 
	 	 	 	 	 	 
	Agreed and Accepted:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Lawrence P Molloy
	 	 	 	 	 	 
	 

Lawrence Molloy

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	8/24/07
	 	 	 	 	 	 
	 

Dateex10-1.htm

    
      EXHIBIT
        10.1

       

      FIRST
        AMENDMENT TO

      AMENDED
        AND RESTATED EMPLOYMENT AGREEMENT

       

      This
        First Amendment to Amended and
        Restated Employment Agreement (this “Amendment”) is entered into on
        September 6, 2007, but is made effective as set forth in Section 7 below,
        by and
        among Keystone Nazareth Bank & Trust Company (“KNBT Bank”), KNBT
        Bancorp, Inc. (“KNBT”), National Penn Bank (“NPBank”), National
        Penn Bancshares, Inc. (“NPB” and together with NPBank, the
“Employer”), and Scott V. Fainor (the “Executive”).

       

      BACKGROUND

      

      1.  KNBT
        is a Pennsylvania
        business corporation, and KNBT Bank is a Pennsylvania chartered savings bank
        and
        wholly-owned subsidiary of KNBT.

      

      2.  The
        Executive is
        presently employed by each of KNBT and KNBT Bank as its President and Chief
        Executive Officer pursuant to an Amended and Restated Employment Agreement,
        dated December 28, 2006 (the “Employment Agreement”).

      

      3.  On
        September 6, 2007, NPB
        and KNBT entered into an Agreement (the “Merger Agreement”) providing,
        among other things, for the merger of KNBT with and into NPB (the
“Merger”), to be followed by the Bank Merger (as defined in the Merger
        Agreement).

      

      4.  It
        is the desire of the
        boards of directors of NPB and NPBank that the Executive continue the
        Executive’s employment from and after the Effective Time (as defined in the
        Merger Agreement), on the terms and conditions set forth in the Employment
        Agreement, as amended by this Amendment, in order that the experience the
        Executive has gained throughout the Executive’s career and the management
        ability the Executive has demonstrated will continue to be available to NPB
        and
        NPBank.  The Executive is willing to continue such employment on the
        terms and conditions set forth in the Employment Agreement, as amended by
        this
        Amendment.

       

      AGREEMENT

       

      NOW
        THEREFORE, for good and valuable consideration the receipt and sufficiency
        of
        which are hereby acknowledged, and intending to be legally bound hereby,
        the
        parties agree as follows:

       

      
        	
                1.  

              	
                Definitions.

              

      

       

      
        	
                 

              	
                a.

              	
                All
                  references to the “Bank,” the “Company” and the “Employer” in the
                  Employment Agreement shall be amended as
                  follows:

              

      

       

      
        	
                 

              	
                i.

              	
                “Bank”
                  shall mean NPBank;

              

      

       

      
        	
                 

              	
                ii.

              	
                “Company”
                  shall mean NPB; and

              

      

       

      
        	
                 

              	
                iii.

              	
                “Employer”
                  shall mean collectively NPBank and
                  NPB;

              

      

       

      in
        each
        case, as defined in the introductory paragraph of this Amendment.  All
        references to the “Effective Time” in this Amendment shall mean the Effective
        Time as defined in the Merger Agreement.

       

      
        	
                 

              	
                b.

              	
                All
                  references to “the Agreement” or “this Agreement” contained in the
                  Employment Agreement shall be deemed, for all purposes, to mean
                  the
                  Employment Agreement, as amended by this
                  Amendment.

              

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                c.

              	
                Capitalized
                  terms used, but not otherwise defined, in this Amendment shall
                  have the
                  meanings ascribed to such terms in the Employment Agreement, as
                  amended by
                  this Amendment.

              

      

       

      
        	
                2.  

              	
                Duties.  The
                  first sentence of Section 3(a) of the Employment Agreement shall
                  be
                  deleted in its entirety and replaced as
                  follows:

              

      

       

      Throughout
        the Employment Period, the Executive shall serve as President and Chief
        Executive Officer of the Bank and Senior Executive Vice President and Chief
        Operating Officer of the Company, having such power, authority and
        responsibility and performing such duties as are prescribed by or under the
        Bylaws of each of the Bank and the Company and as are customarily associated
        with such positions.

       

      
        	
                3.  

              	
                Election
                  to Bank’s Board of Directors.  Section 3(b) of the
                  Employment Agreement shall be deleted in its entirety and replaced
                  as
                  follows:

              

      

       

      During
        the period of the Executive’s employment hereunder, the board of directors of
        the Company will cause the Company, as sole shareholder of the Bank, to elect
        and annually re-elect the Executive to the board of directors of the Bank
        (unless it believes such action would violate its fiduciary duties). Upon
        any
        termination of the Executive’s employment hereunder for any reason, including,
        without limitation, a termination without cause, the Executive will concurrently
        resign from the board of directors of the Bank and, should the Executive
        then be
        serving as a director of the Company or any direct or indirect subsidiary
        or
        affiliate of the Company or Bank, from all such boards as well.

       

      
        	
                4.  

              	
                Cash
                  and Other Compensation.  Section 4(a) of the Employment
                  Agreement shall be amended by adding the following sentence at
                  the end
                  thereof:

              

      

       

      Notwithstanding
        the foregoing, the parties acknowledge and agree that Executive’s Base Salary
        for the fiscal year beginning January 1, 2008 shall be determined by the
        Compensation Committee of KBNT’s board of directors, but in no event shall such
        Base Salary be less than $422,300 nor more than $443,415.

       

      
        	
                5.  

              	
                Working
                  Facilities and Expenses.

              

      

       

      
        	
                a.  

              	
                The
                  first sentence of Section 8 of the Employment Agreement shall be
                  deleted
                  in its entirety and replaced as
                  follows:

              

      

       

      It
        is
        understood by the parties that the Executive’s principal place of employment
        shall be at the Employer’s office located at Reading and Philadelphia Avenues in
        Boyertown, Pennsylvania, or at such other location within a 25-mile radius
        of
        such office, or at such other location as the Employer and the Executive
        may
        mutually agree upon.

       

      
        	
                b.  

              	
                The
                  last sentence of Section 8 of the Employment Agreement shall be
                  deleted in
                  its entirety and replaced as
                  follows:

              

      

       

      The
        Employer shall reimburse the Executive for his ordinary and necessary business
        expenses attributable to the Employer’s business, including, without limitation,
        the Executive’s travel and entertainment expenses incurred in connection with
        the performance of his duties for the Employer under this Agreement, in each
        case upon presentation to the Employer of an itemized account of such expenses
        in such form as the Employer may reasonably require, with such reimbursement
        to
        be paid promptly by the Employer and in any event no later than March 15
        of the
        year immediately following the year in which such expenses were
        incurred.  For the avoidance of doubt, except for (a) the automobile
        allowance payable to the Executive under Section 5(b) hereof and (b) tolls
        and
        parking expenses incurred in the ordinary course of business, the Executive
        shall not be entitled to reimbursement under the immediately preceding sentence
        for any expenses incurred for automobile travel, including, without limitation,
        mileage expense.

       

       

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      
        	
                6.  

              	
                Termination
                  of Employment With Benefits.  Section 9(a)(i)(D) of the
                  Employment Agreement shall be deleted in its entirety and replaced
                  as
                  follows:

              

      

       

      (D)  a
        change in the Executive’s principal place of employment by a distance in excess
        of 25 miles from the Employer’s office located at Reading and Philadelphia
        Avenues in Boyertown, Pennsylvania;

       

      
        	
                7.  

              	
                Payments
                  Upon a Change of Control. Section 11(c) of the Employment Agreement
                  shall be deleted in its entirety and replaced as
                  follows:

              

      

       

      Upon
        the
        occurrence of the events specified in this Section 11(c), the Executive shall
        be
        entitled to receive certain payments at the times and in the amounts as
        follows:

       

      (i)           As
        a result of the change in control of KNBT Bancorp, Inc. (“KNBT”) and Keystone
        Nazareth Bank & Trust Company (“KNBT Bank”) resulting from the merger of
        KNBT with and into the Company, the Executive shall receive a lump sum payment
        as of the Effective Time in an amount equal to $740,503 (the “KNBT CIC
        Payment”) from KNBT or KNBT Bank.

       

      (ii)           The
        Executive shall receive a Severance Payment (defined below) from the Employer
        within ten (10) business days of the earliest to occur of the following events,
        if any:  (A) the termination of the Executive’s employment during the
        two-year period immediately following the Effective Time by the Employer
        other
        than for cause; (B) the termination of the Executive’s employment during the
        two-year period immediately following the Effective Time by the Executive
        pursuant to Section 9(a)(i) above; or (C) a Change in Control during the
        period
        of the Executive’s employment hereunder (each, a “Triggering
        Event”).  “Severance Payment” means a lump sum payment
        determined as follows:  (x) if the Triggering Event occurs during the
        one-year period immediately following the Effective Time, then the Severance
        Payment shall equal the KNBT CIC Payment; or (y) if the Triggering Event
        occurs
        after the one-year anniversary of the Effective Time, then the Severance
        Payment
        shall equal 1.5 times the Executive’s Base Amount (defined below);
provided, however, that in calculating the
        Executive’s Base Amount for purposes of this clause (y), any income related to
        the KNBT CIC Payment shall be excluded from such
        calculation.  “Base Amount” shall be equal to the Executive’s
        average annualized income from the Employer, KNBT, KNBT Bank and their
        predecessors includible in the Executive’s gross income (excluding any income
        resulting from the vesting of restricted stock or the exercise of non-qualified
        options on or prior to December 31, 2004) for the most recent five taxable
        years
        ending before the Triggering Event.

       

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

       

       

      (iii)           The
        Executive shall not be entitled to receive any payments or benefits under
        Section 9 of this Agreement if he receives payments pursuant to Section
        11(c)(ii).

       

      
        	
                8.  

              	
                Effectiveness.  Sections
                  1 through 3 and Sections 5 through 7 of this Amendment shall become
                  effective as of the Effective Time.  The remainder of this
                  Amendment shall become effective upon execution by the parties
                  hereto as
                  set forth herein.

              

      

       

      
        	
                9.  

              	
                Counterparts;
                  Facsimiles.  This Amendment may be executed in any number of
                  separate counterparts, all of which, when delivered, shall together
                  constitute one and the same Amendment.  Facsimile signatures
                  shall be considered original
                  signatures.

              

      

       

      
        	
                10.  

              	
                Governing
                  Law.  This Amendment shall be governed by and construed and
                  enforced in accordance with the laws of the Commonwealth of Pennsylvania
                  applicable to contracts entered into and to be performed entirely
                  within
                  the Commonwealth of Pennsylvania.

              

      

       

      
        	
                11.  

              	
                Conflicts;
                  No Other Amendments.  To the extent that any term or
                  provision of this Amendment is or may be deemed expressly inconsistent
                  with any term or provision in the Employment Agreement, the terms
                  and
                  provisions hereof shall control.  Except as expressly amended by
                  this Amendment, all of the terms, conditions and provisions of
                  the
                  Employment Agreement are hereby ratified and continue unchanged
                  and remain
                  in full force and effect.  Neither this Amendment nor the
                  Employment Agreement shall be amended or otherwise changed except
                  by
                  another agreement signed by each party to this
                  Amendment.

              

      

       

      

       

      [Remainder
        of Page Intentionally Left Blank]

       

      

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have executed this Amendment on the date and
        year
        first above written, to be effective as set forth above.

       

      
        	
                KNBT
                  BANCORP, INC.

                 

                 

                By:
                  /s/ Jeffrey P. Feather

                Name:  Jeffrey
                  P.
                  Feather

                Its:  Chairman
                  of the
                  Board

              	
                NATIONAL
                  PENN BANCSHARES, INC.

                 

                 

                By:
                  /s/ Glenn E. Moyer

                Name:  Glenn
                  E.
                  Moyer

                Its:  President
                  and
                  CEO

                 

                 

              
	
                KEYSTONE
                  NAZARETH

                BANK
                  & TRUST COMPANY

                 

                 

                By:
                  /s/ Jeffrey P. Feather

                Name:  Jeffrey
                  P.
                  Feather

                Its:  Chairman
                  of the
                  Board

              	
                NATIONAL
                  PENN BANK

                 

                 

                 

                By:
                  /s/ Glenn E. Moyer

                Name:  Glenn
                  E.
                  Moyer

                Its:  President
                  and
                  CEO

              
	
                EXECUTIVE:

                 

                 

                 

                /s/
                  Scott V. Fainor

                Scott
                  V. Fainor

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