Employment Agreement between Meridian Bank and Denise Lindsay, effective July 23, 2018, filed as Exhibit 10.2, to Form 8-K with the FDIC on July 23, 2018
This EMPLOYMENT AGREEMENT (“Agreement”) is effective as of the 1st day of July, 2018, between Meridian Bank, a Pennsylvania banking institution, (“Bank”) and Denise Lindsay, an individual residing in Pennsylvania (“Executive”) (Sometimes Bank and Executive are hereafter each referred to as a “Party” and together as the “Parties.”)
WHEREAS, Executive has been and continues to be a valued employee of the Bank; and
WHEREAS, heretofore Executive has not had a written employment contract with Employer; and
WHEREAS, Executive acknowledges that this Agreement gives her substantial rights she previously did not have an as employee of the Bank.
NOW, THEREFORE, in consideration of the forgoing and of the mutual promises and covenants contained herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
|1.||Employment. The Bank hereby employs the Executive and the Executive hereby accepts employment with the Bank, under the terms and conditions set forth in this Agreement.|
|(a)||Executive’s employment, unless terminated as otherwise provided for in this Agreement, shall be for a two (2) year period, beginning on the date first written above (the “Effective Date”), and ending on June 30, 2020 (the “Initial Term”). Her employment shall continue after the Initial Term for successive two-year periods (each a “Renewal Term”), unless either Party notifies the other Party of non- renewal in writing at least three (3) months before the expiration of either the Initial Term or a Renewal Term or unless her employment is terminated as otherwise provided for in this Agreement . (Sometimes hereafter the Initial Term and each Renewal Term are collectively referred to as the “Employment Period.”) It is the intention of the Parties that this Agreement be “evergreen” unless (i) either Party gives written notice to the other Party of her or its intention not to renew this Agreement as provided above or (ii) it is terminated as otherwise permitted in this Agreement.|
|(b)||Notwithstanding any provision to the contrary elsewhere in this Agreement, at the Bank’s discretion, Executive’s employment shall terminate automatically for Cause (as defined herein) upon written notice from the Board of Directors to Executive.As used in this Agreement, “Cause” shall mean any of the following:|
If Executive is terminated for Cause, all of Executive’s rights under this Agreement shall cease as of the effective date of such termination except as may be expressly provided for otherwise in this Agreement or as required by law.
Executive shall within ninety (90) days of the initial existence of any of the foregoing events, provide notice to Bank of the existence of the condition and provide Bank forty five (45) days in which to cure such condition. In the event that Bank does not cure the condition to the
reasonable satisfaction of Executive within forty five (45) days of such notice, Executive may resign from employment with the Bank for Good Reason. If such termination occurs for Good Reason, then Executive shall be entitled to receive a lump sum payment equal to two (2) times Executive’s Agreed Compensation minus applicable withholdings and taxes and a lump sum contribution equal to two (2) times the annual contribution into the Executive’s supplemental retirement plan within thirty (30) days of such termination. In addition, for a period of one (1) year from the date of termination of employment, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the year prior to her termination of employment, or, if Bank cannot provide such benefits because Executive is no longer an employee, the Bank shall reimburse Executive in an amount equal to the monthly premium paid by her to obtain substantially similar employee benefits which she enjoyed prior to termination for one year from the date of termination. Subject to Section 12(a), in the event that the Bank or its successor terminates a benefit plan in which the Executive participates and as a result the Executive is subject to accelerated taxation or taxation at a higher rate than she would have been had the plan not been accelerated, Bank or its successor shall pay Executive an additional cash payment in an amount such that the after-tax proceeds of such payment will be equal to the additional taxes imposed upon the Executive as a result of the termination of the plan.
during the year prior to her D isability, or, if Bank cannot provide such benefits because Executive is no longer an employee, Bank shall reimburse Executive in an amount equal to the monthly premium paid by her to obtain substantially similar employee benefits which she enjoyed prior to termination. Executive shall also receive the benefits described in Section 5(e), 5(h) and 5(i) of this Agreement for such same period to the extent permissible under the applicable plan. Executive’s bonus under Section 5(b) shall be pro-rated at target for the portion of the year for which Executive did not suffer from a disability. For purposes of this Agreement, the Executive shall have a Disability if 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 twelve (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 twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the Bank provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence. Upon the request of the Bank, the Executive must submit proof to the Bank of the Social Security Administration’s or the provider’s determination. The Executive shall have no duty to mitigate any payment provided for in this Section 4(e) by seeking other employment.
|(f)||The term “Agreed Compensation” shall equal the sum of (A) the Executive’s Annual Base Salary immediately preceding Executive’s termination and (B) the average value of Executive’s annual bonuses (cash and stock) when received within the two (2) calendar years immediately preceding Executive’s termination.|
prior contract year. Any and all such increases shall be deemed to constitute amendments to this Section 5(a).
|(b)||Bonus. Executive shall be entitled to a target bonus equal to thirty percent (30%) of her Annual Base Salary based on annual performance objectives as are established by the CEO in consultation with the Executive. The amount of the bonus and the level of the annual performance objectives shall be determined by the CEO, based upon recommendation of the Bank’s compensation committee using peer group performance measures. T h e a c t u a l b o n u s p a i d m a y b e i n e x c e s s o f t a r g e t b a s e d u p o n E x e c u t i v e ’ s a t t a i n m e n t o f g o a l s a n d o b j e c t i v e s . In addition, the CEO may also grant Executive additional bonuses at the CEO’s discretion.|
|(c)||Paid Vacation. Executive shall be entitled to at least four (4) weeks paid vacation in accordance with the manner and amount provided under the paid vacation plan then in effect and approved by the Board of Directors.|
|(d)||Professional Memberships and Education. The Bank shall pay Executive’s annual professional memberships and continuing education requirements for licensing/certifications that are consistent with the Executive’s position as Chief Financial Officer.|
|(e)||Employee Benefit Plans. Executive shall be entitled to participate in or receive the benefits of any employee benefit plan currently in effect at the Bank in the same manner and contribution level as established for other executive officers of the Bank, subject to the terms of said plan, until such time that the Board of Directors of the Bank authorizes a change in such benefits. The Bank shall not make any changes in such plans or benefits which would adversely affect Executive’s benefits, unless such change occurs pursuant to a program applicable to all executive officers of the Bank and does not result in a proportionately greater adverse change in the rights of or benefits to Executive as compared with any other executive officer of the Bank. Nothing paid to 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 Executive pursuant to Section 5(a) hereof.|
documentation and in accordance with the expense reimbursement policy of the Bank, up to the amount of $5,000.
|(h)||Supplemental Executive Retirement Deferred Compensation Plan. The Bank agrees to provide Executive with the Supplemental Executive Retirement Deferred Compensation Plan, adopted by the Bank effective January 1, 2009, at a target of 25% of final three (3) years annual salary, while such Plan is in effect.|
|(i)||Supplemental Life Insurance. The Bank agrees to provide Executive with the Supplemental Life Insurance adopted by the Bank in 2014 while such benefit is in effect.|
|(j)||Equity Incentive Plan. Executive shall be entitled to participate in any equity incentive plan of the Bank in which she is eligible to participate and at least to the same extent as other similarly-situated C-level executives of the Bank.|
|6.||Termination of Employment Following Change in Control.|
|(a)||If a Change in Control (as defined in Section 6(b) of the Agreement) shall occur and Executive’s employment is terminated by the Bank without Cause or by the Executive for Good Reason within two years of the Change in Control, Executive shall be entitled to the benefits provided in Section 7 of this Agreement.|
|(b)||As used in this Agreement, “Change in Control” shall mean:|
409A of the Code), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Bank possessing thirty-five percent (35%) or more of the total voting power of the stock of the Bank; or
provided, however, that the reorganization of the Bank into a bank holding company structure shall not, by itself, constitute a Change in Control
|9.||Rights in the Event of Non-Renewal. In the event that this Agreement is not renewed by the Bank and Executive terminates employment within thirty (30) days of receipt of written notice of non-renewal pursuant to Section 4(a) of this Agreement, Executive shall be entitled to a lump sum payment of one (1) times her Agreed Compensation within thirty (30) days of termination of employment. This payment shall be in addition to any other payment or benefits due to the Executive under this Agreement. In addition, for a period of one year from the date of termination of employment, or until Executive is covered under a new Employer’s benefit plans offering a comparable level of benefits, whichever is shorter, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the year prior to her termination of employment, or, if Bank cannot provide such benefits because Executive is no longer an employee, the Bank shall reimburse Executive in an amount equal to the monthly premium paid by her to obtain substantially similar employee benefits which she enjoyed prior to termination for one (1) year from the date of termination.|
(i) directors’ and officers’ liability insurance tail coverage (hereinafter referred to
as “D&O Tail Coverage”), for liability coverage for all acts, omissions, events and occurrences, taking place while the Executive was employed by the Bank, and such D&O Tail Coverage shall remain in effect until the statutes of limitations for all possible claims against the Executive, have expired; and (ii) outplacement services which cost the Bank not more than Fifteen Thousand Dollars ($15,000).
§1.409A-2(b)(2) made upon an involuntary termination from service and payable pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision. In no event may the Executive, directly or indirectly, designate the calendar year of any payment under this Agreement.
|(c)||If when Executive’s employment terminates, Executive is a “specified employee,” as defined in Code Section 409A(a)(2)(B)(i), then despite any provision of this Agreement or other plan or agreement to the contrary, Executive will not be entitled to the payments until the earliest of: (a) the date that is at least six months after Executive’s Separation from Service (as defined in Code section 409A) for reasons other than Executive’s death, (b) the date of Executive’s death, or (c) any earlier date that does not result in additional tax or interest to Executive under Code Section 409A. As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to Executive in a single lump sum with any remaining payments to commence in accordance with the terms of this Agreement or other applicable plan or agreement.|
|(d)||Notwithstanding the foregoing, no payment shall be made pursuant to this Agreement unless such termination of employment is a “Separation from Service” as defined in Code Section 409A.|
|(e)||To the extent required to avoid accelerated taxation and/or tax penalties|
|under Code Section 409A, amounts reimbursable to Executive under this|
Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during one year may not affects amount reimbursable or provided in any subsequent year.
|(f)||It is the intent of the Bank and Executive that this Agreement and|
all of its provisions shall legally comply with Internal Revenue Code Section 409A and all applicable regulations. If this Agreement does not comply with Internal Revenue Code Section 409A and all applicable regulations, then this Agreement shall be automatically amended, but only to the extent reasonably necessary, to legally comply with Code Section 409A and all applicable regulations in making any payments to Executive hereunder.Other than as set forth in the previous sentence, Executive understands and agrees that Executive shall be solely responsible for the payment of any taxes, penalties, interest or other expenses incurred by Executive on account of non-compliance with Code Section 409A.
the result of employment by another employer or by reason of Executive’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.
|(b)||It is expressly understood and agreed that, although Executive and the Bank consider the restrictions contained inSection 14(a) hereof reasonable for the purpose of preserving for the Bank its goodwill and other proprietary rights, if a final judicial determination is made by a court having jurisdiction that the time or territory or any other restriction contained inSection 14(a) hereof is an unreasonable or otherwise unenforceable restriction against Executive, the provisions of S e c t i o n 14(a) hereof shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such other extent as such court may judicially determine or indicate to be reasonable. Furthermore, Executive agrees that the promises of the Bank set forth in this Agreement constitute good, valid and sufficient consideration for her promises contained in this Section 14 (entitled “Covenant Not to Compete”).|
|(c)||Notwithstanding anything to the contrary elsewhere in this Agreement, should Bank simply not renew Executive’s Employment Agreement, or should Bank terminate Executive’s employment without Cause or should Executive terminate her employment for Good Reason, then the post- employment length of her above non-compete period shall be reduced from one year to 6 months from the date her employment ends.|
other documents or property (including reproductions of any of the same in any form or format.)
|21.||Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and an executive officer specifically designated by the Board of Directors of the Bank. No waiver by either party hereto at any time of any breach by the 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.|
|22.||Assignment. This Agreement shall not be assignable by any party, except by the Bank to any successor in interest to its respective business.|
|23.||Entire Agreement. This Agreement supersedes any and all agreements, either oral or in writing, between the parties with respect to the employment of Executive by the Bank, and this Agreement contains all the covenants and agreements between the parties with respect to her employment. Signatures to this Agreement delivery electronically shall be valid as original signatures. (However, nothing in this Agreement replaces any change in control rights under any separate retirement plan(s) of the Bank (such as any Supplemental Executive Retirement Deferred Compensation Plan), which plan(s) shall not be effected by this Agreement).|
|25.||Arbitration. The Bank and 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 14, 15 or|
17 which may be litigated in court notwithstanding anything to the contrary elsewhere herein,, including an action for injunction or other relief) are to be submitted for resolution to the American Arbitration Association (the “Association”) at its offices nearest to Malvern, Pennsylvania, in accordance with the Association’s National Rules for the Resolution of Employment Disputes or other applicable rules then in effect (“Rules”). The Bank or Executive may initiate an arbitration proceeding at any time by giving notice to the other in accordance with the Rules. The Bank and Executive may, as a matter of right, mutually agree on the appointment of a particular arbitrator from the Association’s pool. The Bank shall pa y all costs of the arbitrator. 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, the Bank and 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.
|28.||Headings. The section headings of this Agreement are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.|
|29.||Review by Counsel. Employee represents that he/she has reviewed this Agreement in full with her own legal counsel as may have been desired before signing it. No provision hereof shall be construed against a party because such party or its representative drafted it.|
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.