EXHIBIT 10.10 EXECUTION COPY
02/28/02
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 28th day of February, 2002, among
STERLING FINANCIAL CORPORATION ("Corporation"), a Pennsylvania business
corporation having a place of business at 000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000, Bank of Lancaster County ("Bank") a national chartered bank
having a place of business at 000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000, and J. XXXXXXX XXXXXXX ("Executive"), an individual residing
at 000 XxXxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, the Corporation is a registered financial holding company;
WHEREAS, Bank is a subsidiary of the Corporation;
WHEREAS, Corporation and Bank desire to employ Executive to serve in the
capacity of Senior Executive Vice President of Corporation and Chief Financial
Officer of Corporation and Bank under the terms and conditions set forth herein;
WHEREAS, Executive desires to accept employment with Corporation and
Bank on the terms and conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:
1. EMPLOYMENT. Corporation and Bank hereby employ Executive and Executive
hereby accepts employment with Corporation and Bank, under the terms and
conditions set forth in this Agreement. As consideration for this
Agreement, Executive hereby agrees to release Corporation and Bank of
Hanover and Trust Company of any obligations, duties or
responsibilities, and Executive agrees to relinquish any and all rights,
including but not limited to, any payments, compensation or sums of
money to which he may otherwise be entitled, or he may have, under the
Employment Agreement dated January 25, 2000 and entered between
Executive, Corporation and Bank of Hanover and Trust Company.
2. DUTIES OF EMPLOYEE. Executive shall perform and discharge well and
faithfully such duties as an executive officer of Corporation and Bank
as may be assigned to Executive from time to time by the Board of
Directors of Corporation and Bank and the Chairman, Chief Executive
Officer and President of the Corporation, so long as the assignment is
consistent with the Executive's office and duties. Executive shall be
employed as Senior Executive Vice President of Corporation and Chief
Financial Officer of Corporation and Bank, and shall hold such other
titles as may be given to him from time to time by the Boards of
Directors of Corporation and Bank. Executive shall devote his full time,
attention and energies to the business of Corporation and Bank during
the Employment Period (as defined in Section 3 of this Agreement);
provided, however, that this Section 2 shall not be construed as
preventing Executive from (a) engaging in activities incident or
necessary to personal
EXHIBIT 10.10 EXECUTION COPY
02/28/02
investments, so long as such investment does not exceed 5% of the
outstanding shares of any publicly held company, (b) acting as a member
of the Board of Directors of any other corporation or as a member of the
Board of Trustees of any other organization, with the prior approval of
the Boards of Directors of Corporation and Bank, or (c) being involved
in any other activity with the prior approval of the Boards of Directors
of Corporation and Bank. The Executive shall not engage in any business
or commercial activities, duties or pursuits which compete with the
business or commercial activities of Corporation, Bank or their
subsidiaries, nor may the Executive serve as a director or officer or in
any other capacity in a company which competes with Corporation, Bank or
their subsidiaries.
3. TERM OF AGREEMENT.
(a) This Agreement shall be for a three (3) year period (the
"Employment Period"), beginning on the date first written above
and, if not previously terminated pursuant to the terms of this
Agreement, the Employment Period shall end three (3) years later;
provided however, that this Agreement will be automatically
renewed on the first anniversary date of the date first written
above (the "Renewal Date") for the three-year period commencing
on such date and ending three years later, unless either party
gives written notice of nonrenewal to the other party at least
sixty (60) days prior to the Renewal Date (in which case this
Agreement will continue in effect for a term ending two years
from the Renewal Date). If this Agreement is renewed on the
Renewal Date, it will be automatically renewed on the first
anniversary date of the Renewal Date and each subsequent year
(the "Annual Renewal Date") for a period ending three years from
each Annual Renewal Date, unless either party gives written
notice of non renewal to the other party at least sixty (60) days
prior to an Annual Renewal (in which case this Agreement will
continue in effect for a term ending two years from the Annual
Renewal Date immediately following such notice).
(b) Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically for Cause (as
defined herein) upon written notice from the Board of Directors
of Corporation or Bank to Executive. As used in this Agreement,
"Cause" shall mean any of the following:
(i) Executive's conviction of or plea of guilty or nolo
contendere to a felony, a crime of falsehood or a crime
involving moral turpitude, or the actual incarceration of
Executive for a period of forty-five (45) consecutive days
or more;
(ii) Executive's failure to follow the good faith lawful
instructions of the Board of Directors of Corporation or
Bank with respect to its operations, after written notice
from Corporation or Bank and a failure to cure such
violation within thirty (30) days of said written notice;
(iii) Executive's willful failure to substantially perform
Executive's duties to Corporation or Bank, other than a
failure resulting from Executive's incapacity because of
physical or mental illness, as provided in Section 3(d)
2
EXHIBIT 10.10 EXECUTION COPY
02/28/02
of this Agreement, after written notice from Corporation
or Bank and a failure to cure such violation within thirty
(30) days of said written notice;
(iv) Executive's intentional violation of the provisions of
this Agreement, after written notice from Corporation or
Bank and a failure to cure such violation within thirty
(30) days of said written notice;
(v) Dishonesty of the Executive in the performance of his
duties;
(vi) Executive's removal or prohibition from being an
institutional-affiliated party by a final order of an
appropriate federal banking agency pursuant to Section
8(e) of the Federal Deposit Insurance Act or by the Office
of the Comptroller of the Currency pursuant to national
law;
(vii) Conduct on the part of the Executive which brings public
discredit to Corporation, Bank or their subsidiaries, as
determined by an affirmative vote of seventy percent (70%)
of the disinterested members of the Boards of Directors of
Corporation and Bank; or
(viii) Executive's breach of fiduciary duty involving personal
profit;
(ix) Unlawful discrimination by the Executive, including
harassment against employees, customers, business
associates, contractors, or vendors of Corporation, Bank
or their subsidiaries, which could result in liability to
Corporation, Bank or one of their subsidiaries; or
(x) Theft or material abuse by executive of the property of
Corporation, Bank or their subsidiaries or the property of
customers, employees, subsidiaries, contractors, vendors,
or business associates of Corporation, Bank or their
subsidiaries.
If this Agreement is terminated for Cause, all of Executive's
rights under this Agreement shall cease as of the effective date
of such termination.
(c) Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically upon Executive's
voluntary termination of employment (other than in accordance
with Section 5 of this Agreement) for Good Reason. The term "Good
Reason" shall mean (i) the assignment of duties and
responsibilities inconsistent with Executive's status as Chief
Financial Officer of Corporation and Bank, (ii) a reassignment
which requires Executive to move his principal residence and/or a
requirement that Executive move his office more than fifty (50)
miles from the Corporation's or Bank's principal executive office
immediately prior to this Agreement, (iii) any removal of the
Executive from office or any adverse change in the terms and
conditions of the Executive's employment, except for any
termination of the Executive's employment under the provisions of
Section 3(b) of this Agreement, (iv) any reduction in the
Executive's Annual Base Salary as in effect on
3
EXHIBIT 10.10 EXECUTION COPY
02/28/02
the date on the date of this Agreement, or as the same may be
increased from time to time, except such reductions that are the
result of a national financial depression, or national or bank
emergency, or (v) any failure of Corporation or Bank to provide
the Executive with benefits at least as favorable as those
enjoyed by the Executive during the Employment Period under any
of the pension, or other qualified retirement, life insurance,
medical, health and accident, disability or other employee plans
of Corporation or Bank, or the taking of any action that would
materially reduce any of such benefits unless such reduction is
part of a reduction applicable to all employees.
At the option of the Executive, exercisable by the Executive
within ninety (90) days after the occurrence of the event
constituting "Good Reason," the Executive may resign from
employment under this Agreement by a notice in writing (the
"Notice of Termination") delivered to Corporation and Bank and
the provisions of this Section 3(c) hereof shall thereupon apply.
If such termination occurs for Good Reason, then Corporation or
Bank shall pay Executive an amount equal to the remaining balance
of the Agreed Compensation otherwise due to the Executive for the
remainder of the then existing Employment Period, which amount
shall be payable in equal monthly installments and shall be
subject to federal, state and local tax withholdings. In
addition, for the remainder of the then existing Employment
Period, 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 two (2) years prior to his
termination of employment, or, if Corporation and Bank cannot
provide such benefits because Executive is no longer an employee,
a dollar amount equal to the cost to Executive of obtaining such
benefits (or substantially similar benefits). If permitted under
the terms of the plan, Executive may continue to participate in
all qualified and non-qualified retirement benefit plans as if
his employment had continued through the remaining term of the
Agreement. If Executive is not eligible to continue to
participate in qualified or non-qualified retirement plans,
Executive will receive a lump sum cash payment equal to 25% of
the payments to be received for termination of this Agreement
under this provision. However, in the event that the payment
described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his
termination of employment, would result in the imposition of an
excise tax under Code Section 4999, such payments shall be
retroactively (if necessary) reduced to the extent necessary to
avoid such excise tax imposition. Upon written notice to
Executive, together with calculations of Corporation's
independent auditors, Executive shall remit to Corporation the
amount of the reduction plus such interest as may be necessary to
avoid the imposition of such excise tax. Notwithstanding the
foregoing or any other provision of this contract to the
contrary, if any portion of the amount herein payable to the
Executive is determined to be non-deductible, pursuant to the
regulations promulgated under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), the Corporation
shall be required only to pay to Executive the amount determined
to be deductible under Section 280G.
4
EXHIBIT 10.10 EXECUTION COPY
02/28/02
(d) Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically upon Executive's
Disability and Executive's rights under this Agreement shall
cease as of the date of such termination; provided, however, that
Executive shall nevertheless be entitled to receive any benefits
that may be available under any disability plan of Corporation
and Bank, until the earliest of (i) Executive's return to
employment, (ii) his attainment of age 65, or (iii) his death. In
addition, Executive shall receive for such period a continuation
of all life, disability, medical insurance and other normal
health and welfare benefits in effect with respect to Executive
during the two (2) years prior to his disability, or, if
Corporation and Bank cannot provide such benefits because
Executive is no longer an employee, a dollar amount equal to the
cost to Executive of obtaining such benefits (or substantially
similar benefits). For purposes of this Agreement, the Executive
shall have a Disability if, as a result of physical or mental
injury or impairment, Executive is unable to perform all of the
essential job functions of his position on a full time basis,
taking into account any reasonable accommodation required by law,
and without posing a direct threat to himself and others, for a
period of one hundred eighty (180) days or more. The Executive
shall have no duty to mitigate any payment provided for in this
Section 3(d) by seeking other employment.
(e) Executive agrees that in the event his employment under this
Agreement is terminated, regardless of the reason for
termination, Executive shall resign as a director of Corporation
and Bank, or any affiliate or subsidiary thereof, if he is then
serving as a director of any of such entities.
(f) The term "Agreed Compensation" shall equal the sum of (A) the
Executive's highest Annual Base Salary under the Agreement, and
(B) the average of the Executive's annual bonuses with respect to
the three (3) calendar years immediately preceding the
Executive's termination; provided, however, that if the Executive
is terminated after January 1, 2003, but before January 1, 2004,
then Agreed Compensation shall equal the sum of (A) the
Executive's highest Annual Base Salary under the Agreement and
(B) the Executive's annual bonus for 2002. If the Executive is
terminated after January 1, 2004, but before January 1, 2005,
then Agreed Compensation shall equal the sum of (A) the
Executive's highest Annual Base Salary under the Agreement and
(B) the average of the Executive's annual bonuses for 2002 and
2003.
4. EMPLOYMENT PERIOD COMPENSATION.
(a) Annual Base Salary. For services performed by Executive under
this Agreement, Corporation or Bank shall pay Executive an Annual
Base Salary during the Employment Period at the rate of Two
Hundred Twenty-Five Thousand Dollars ($225,000) per year (subject
to applicable withholdings and deductions) payable at the same
times as salaries are payable to other executive employees of
Corporation or Bank. Corporation or Bank may, from time to time,
increase Executive's Annual Base Salary, and any and all such
increases shall be deemed to constitute amendments to this
Section 4(a) to reflect the increased amounts, effective as of
the
5
EXHIBIT 10.10 EXECUTION COPY
02/28/02
date established for such increases by the Board of Directors of
Corporation or Bank or any committee of such Board in the
resolutions authorizing such increases.
(b) Bonus. For services performed by Executive under this Agreement,
Corporation or Bank may, from time to time, pay a bonus or
bonuses to Executive as Corporation or Bank, in its sole
discretion, deems appropriate. The payment of any such bonuses
shall not reduce or otherwise affect any other obligation of
Corporation or Bank to Executive provided for in this Agreement.
Executive is entitled to participate in the bonus programs
available to senior executives.
(c) Paid Time Off and/or Vacations. During the term of this
Agreement, Executive shall be entitled to paid time off in
accordance with the policies as established from time to time by
the Boards of Directors of Corporation and Bank for the
Corporation's and Bank's senior management.
(d) Automobile. During the term of this Agreement, Corporation and
Bank shall provide Executive with exclusive use of an automobile
mutually agreed upon by Corporation and Bank and reasonably
consistent with Executive's position. Corporation and Bank shall
be responsible and shall pay for all costs of insurance coverage,
repairs, maintenance and other operating and incidental expenses,
including license, fuel and oil. Corporation and Bank shall
provide Executive with a replacement automobile at approximately
the time Executive's automobile reaches three (3) years of age or
50,000 miles, whichever is first, and approximately every three
(3) years or 50,000 miles thereafter, upon the same terms and
conditions.
(e) Employee Benefit Plans. During the term of this Agreement,
Executive shall be entitled to participate in or receive the
benefits of any employee benefit plan currently in effect at
Corporation and Bank, subject to the terms of said plan, until
such time that the Boards of Directors of Corporation and Bank
authorize a change in such benefits. Corporation and Bank shall
not make any changes in such plans or benefits that would
adversely affect Executive's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all
executive officers of Corporation and 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 Corporation and 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 4(a) of this Agreement.
(f) Business Expenses. During the term of this Agreement, Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him, which are properly accounted
for, in accordance with the policies and procedures established
by the Boards of Directors of Corporation and Bank for their
executive officers. Corporation and Bank shall reimburse
Executive for any and all dues and reasonable related business
expenses associated with the Executive's membership in a mutually
agreeable country club.
6
EXHIBIT 10.10 EXECUTION COPY
02/28/02
(g) Stock Options. Executive shall be entitled to participate in the
Corporation's stock option plans consistent with his position as
a member of Corporation's and Bank's senior management. Upon a
Change in Control (as defined in Section 5(b) of this Agreement),
all options theretofore granted to the Executive by the
Corporation and not previously exercisable shall become fully
exercisable to the same extent and in the same manner as if they
had become exercisable by passage of time or by virtue of the
Corporation achieving certain performance objectives in
accordance with the relevant provisions of any plan and any
agreement.
5. TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL.
(a) If a Change in Control (as defined in Section 5(b) of this
Agreement) shall occur, then, at the option of Executive,
exercisable by Executive within three hundred sixty five (365)
days of the Change in Control, Executive may resign from
employment with Corporation and Bank (or, if involuntarily
terminated, give notice of intention to collect benefits under
this Agreement) by delivering a notice in writing (the "Notice of
Termination") to Corporation and Bank and the provisions of
Section 6 of this Agreement shall apply.
(b) As used in this Agreement, "Change in Control" shall mean the
occurrence of any of the following:
(i) (A) a merger, consolidation or division involving
Corporation or Bank, (B) a sale, exchange, transfer or
other disposition of substantially all of the assets of
Corporation or Bank, or (C) a purchase by Corporation or
Bank of substantially all of the assets of another entity,
unless (y) such merger, consolidation, division, sale,
exchange, transfer, purchase or disposition is approved in
advance by seventy percent (70%) or more of the members of
the Board of Directors of Corporation or Bank (or the
entity affected by the transaction) who are not interested
in the transaction and (z) a majority of the members of
the Board of Directors of the legal entity resulting from
or existing after any such transaction and of the Board of
Directors of such entity's parent corporation, if any, are
former members of the Board of Directors of Corporation or
Bank (or the entity affected by the transaction); or
(ii) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")), other than Corporation or Bank or any
"person" who on the date hereof is a director or officer
of Corporation or Bank is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Corporation or
Bank representing twenty-five (25%) percent or more of the
combined voting power of Corporation's or Bank's then
outstanding securities, or
7
EXHIBIT 10.10 EXECUTION COPY
02/28/02
(iii) during any period of two (2) consecutive years during the
term of Executive's employment under this Agreement,
individuals who at the beginning of such period constitute
the Board of Directors of Corporation or Bank cease for
any reason to constitute at least a majority thereof,
unless the election of each director who was not a
director at the beginning of such period has been approved
in advance by directors representing at least two-thirds
of the directors then in office who were directors at the
beginning of the period; or
(iv) any other change in control of Corporation and Bank
similar in effect to any of the foregoing.
6. RIGHTS IN EVENT OF TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN
CONTROL.
(a) In the event that Executive delivers a Notice of Termination (as
defined in Section 5(a) of this Agreement) to Corporation and
Bank, Executive shall be entitled to receive the compensation and
benefits set forth below:
If, at the time of termination of Executive's employment, a
"Change in Control" (as defined in Section 5(b) of this
Agreement) has also occurred, Corporation and Bank shall pay
Executive a lump sum amount equal to and no greater than 2.99
times the Executive's Agreed Compensation as defined in Section 3
of this Agreement (the payment of which shall be subject to
applicable taxes and withholdings). In addition, for a period of
three (3) years 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 two (2) years prior to his
termination of employment, or, if Corporation and Bank cannot
provide such benefits because Executive is no longer an employee,
a dollar amount equal to the cost to Executive of obtaining such
benefits (or substantially similar benefits). If permitted under
the terms of the plan, Executive may continue to participate in
all qualified and non-qualified retirement plans as if his
employment had continued through the then remaining term of the
Agreement. If Executive is not eligible to participate in non-
qualified or qualified retirement plans, Executive will receive a
lump sum cash payment equal to 25% of the payments to be received
for termination of the Agreement under this provision. However,
in the event the payment described herein, when added to all
other amounts or benefits provided to or on behalf of the
Executive in connection with his termination of employment, would
result in the imposition of an excise tax under Code Section
4999, such payments shall be retroactively (if necessary) reduced
to the extent necessary to avoid such excise tax imposition. Upon
written notice to Executive, together with calculations of
Corporation's independent auditors, Executive shall remit to
Corporation the amount of the reduction plus such interest as may
be necessary to avoid the imposition of such excise tax.
Notwithstanding the foregoing or any other provision of this
contract to the contrary, if any portion of the amount herein
payable to the Executive is determined to be non-deductible
pursuant to the regulations promulgated under Section 280G of the
8
EXHIBIT 10.10 EXECUTION COPY
02/28/02
Internal Revenue Code of 1986, as amended (the "Code"), the
Corporation shall be required only to pay to Executive the amount
determined to be deductible under Section 280G.
(b) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 6 by seeking other
employment or otherwise. Unless otherwise agreed to in writing,
the amount of payment or the benefit provided for in this Section
6 shall not be reduced by any compensation earned by Executive as
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.
7. RIGHTS IN EVENT OF TERMINATION OF EMPLOYMENT ABSENT CAUSE.
(a) In the event that Executive's employment is involuntarily
terminated by Corporation and/or Bank without Cause, and in a
situation not addressed by the Change in Control provisions set
forth in Section 6 of this Agreement, Corporation and Bank shall
pay Executive an amount equal to 2.0 times the Executive's Agreed
Compensation or the remaining balance of the Agreed Compensation
otherwise due to the Executive for the remainder of the then
existing Employment Period, whichever is greater, and shall be
payable in equal monthly installments and shall be subject to
federal, state and local tax withholdings. In addition, for the
remainder of the then existing Employment Period 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 two (2) years prior to his termination of
employment, or, if Corporation and Bank cannot provide such
benefits because Executive is no longer an employee, a dollar
amount equal to the cost to Executive of obtaining such benefits
(or substantially similar benefits). In addition, if permitted
pursuant to the terms of the plan, Executive may continue to
participate in all qualified and non-qualified retirement
benefits plans as if his employment had continued through the
then remaining term of the Agreement. If Executive is not
eligible to participate in non-qualified or qualified retirement
plans, Executive will receive a lump sum cash payment equal to
25% of the payments to be received for termination of the
Agreement under this provision. However, in the event the payment
described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his
termination of employment, would result in the imposition of an
excise tax under Code Section 4999, such payments shall be
retroactively (if necessary). However, in the event the payment
described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his
termination of employment, would result in the imposition of an
excise tax under Code Section 4999, such payments shall be
retroactively (if necessary) reduced to the extent necessary to
avoid such excise tax imposition. Upon written notice to
Executive, together with calculations of Corporation's
independent auditors, Executive shall remit to Corporation the
amount of the reduction plus such interest as may be necessary to
9
EXHIBIT 10.10 EXECUTION COPY
02/28/02
avoid the imposition of such excise tax. Notwithstanding the
foregoing or any other provision of this contract to the
contrary, if any portion of the amount herein payable to the
Executive is determined to be non-deductible pursuant to the
regulations promulgated under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), the Corporation
shall be required only to pay to Executive the amount determined
to be deductible under Section 280G.
(b) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other
employment or otherwise. Unless otherwise agreed to in writing,
the amount of payment or the benefit provided for in this Section
7 shall not be reduced by any compensation earned by Executive as
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.
8. COVENANT NOT TO COMPETE.
(a) Executive hereby acknowledges and recognizes the highly
competitive nature of the business of Corporation and Bank and
accordingly agrees that, during and for the applicable period set
forth in Section 8(c) hereof, Executive shall not, except as
otherwise permitted in writing by the Corporation and the Bank:
(i) be engaged, directly or indirectly, either for his own
account or as agent, consultant, employee, partner,
officer, director, proprietor, investor (except as an
investor owning less than 5% of the stock of a publicly
owned company) or otherwise of any person, firm,
corporation or enterprise engaged in (1) the banking
(including financial or bank holding company) or financial
services industry, or (2) any other activity in which
Corporation or Bank or any of their subsidiaries or
affiliates, other than Town and Country, Inc. and
Equipment Finance, Inc., are engaged during the Employment
Period, and remain so engaged at the end of the Employment
Period, in any county in which, at any time during the
Employment Period or on the date of termination of the
Executive's employment, Corporation, Bank or any of their
subsidiaries or affiliates conducted business, or in any
county contiguous to such a county, including countries
located outside of the Commonwealth of Pennsylvania (the
"Non-Competition Area"); or
(ii) provide financial or other assistance to any person, firm,
corporation, or enterprise engaged in (1) the banking
(including financial or bank holding company) or financial
services industry, or (2) any other activity in which
Corporation, Bank or any of their subsidiaries or
affiliates, other than Town and County, Inc., and
Equipment Finance, Inc., are engaged during the Employment
Period, in the Non-Competition Area; or
(iii) directly or indirectly contact, solicit or induce any
person, corporation or other entity who or which is a
customer or referral source of Corporation,
10
EXHIBIT 10.10 EXECUTION COPY
02/28/02
Bank or any of their subsidiaries or affiliates at any
time during the Employment Period or on the effective date
of termination of the Executive's employment; or
(iv) directly or indirectly solicit, induce or encourage any
employee of Corporation, Bank or any of their subsidiaries
or affiliates, who is employed, at any time during the
Employment Period or on the effective date of termination
of the Executive's employment, to leave the employ of
Corporation, Bank or any of their subsidiaries or
affiliates or to seek, obtain or accept employment with
any person other than Corporation, Bank or any of their
subsidiaries or affiliates.
(b) It is expressly understood and agreed that, although Executive
and Corporation and Bank consider the restrictions contained in
Section 8(a) and (c) of this Agreement reasonable for the purpose
of preserving for Corporation and Bank and their subsidiaries
their good will 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 in Section
8(a) and (c) of this Agreement is an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of
Section 8(a) and (c) of this Agreement 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.
(c) The provisions of this Section 8 shall be applicable commencing
on the date first written at the beginning of this Agreement and
ending on one of the following dates, as applicable:
(i) if Executive's employment terminates in accordance with
the provisions of Section 3(c) of this Agreement (relating
to termination for Good Reason), the end of the then
existing Employment Period; or
(ii) if Executive's employment terminates in accordance with
the provisions of Section 3(b) of this Agreement (relating
to termination for Cause), the second anniversary date of
the effective date of termination of employment; or
(iii) if the Executive voluntarily terminates his employment in
accordance with the provisions of Section 5 of this
Agreement (relating to termination following Change in
Control), the second anniversary date of the effective
date of termination of employment; or
(iv) if the Executive's employment is involuntarily terminated
in accordance with the provisions of Section 7 of this
Agreement (relating to termination absent Cause), the
second anniversary date of the effective date of
termination of employment; or
11
EXHIBIT 10.10 EXECUTION COPY
02/28/02
(v) if the Executive voluntarily terminates his employment
without Good Reason and absent Change in Control, the
second anniversary date of the effective date of
termination of employment; or
(vi) if the Agreement expires by its terms in accordance with
the provisions of Section 3(a) and other than for Cause,
the second anniversary date of the effective date of
termination of employment.
9. UNAUTHORIZED DISCLOSURE. During the term of his employment hereunder, or
at any later time, the Executive shall not, without the written consent
of the Boards of Directors of Corporation and Bank or a person
authorized thereby, knowingly disclose to any person, other than an
employee of Corporation or Bank or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance
by the Executive of his duties as an executive of Corporation and Bank,
any material confidential information obtained by him while in the
employ of Corporation and Bank with respect to any of Corporation and
Bank's services, products, improvements, formulas, designs or styles,
processes, customers, customer lists, methods of business or any
business practices the disclosure of which could be or will be damaging
to Corporation or Bank; provided, however, that confidential information
shall not include any information known generally to the public (other
than as a result of unauthorized disclosure by the Executive or any
person with the assistance, consent or direction of the Executive) or
any information of a type not otherwise considered confidential by
persons engaged in the same business of a business similar to that
conducted by Corporation and Bank or any information that must be
disclosed as required by law.
10. WORK MADE FOR HIRE. Any work performed by the Executive under this
Agreement should be considered a "Work Made for Hire" as that phrase is
defined by the U.S. patent laws and shall be owned by and for the
express benefit of Corporation, Bank and their subsidiaries and
affiliates. In the event it should be established that such work does
not qualify as a Work Made for Hire, the Executive agrees to and does
hereby assign to Corporation, Bank and their affiliates and
subsidiaries, all of his rights, title, and/or interest in such work
product, including, but not limited to, all copyrights, patents,
trademarks, and proprietary rights.
11. RETURN OF COMPANY PROPERTY AND DOCUMENTS. The Executive agrees that, at
the time of termination of his employment, regardless of the reason for
termination, he will deliver to Corporation, Bank and their subsidiaries
and affiliates, any and all company property, including, but not limited
to, keys, security codes or passes, mobile telephones, pagers,
computers, devices, confidential information (as defined in this
Agreement), records, data, notes, reports, proposals, lists,
correspondence, specification, drawings, blueprints, sketches, software
programs, equipment, other documents or property, or reproductions of
any of the aforementioned items developed or obtained by the Executive
during the course of his employment.
12. LIABILITY INSURANCE. Corporation and Bank shall use their best efforts
to obtain insurance coverage for the Executive under an insurance policy
covering officers and directors of Corporation and Bank against
lawsuits, arbitrations or other legal or regulatory proceedings;
however, nothing herein shall be construed to require Corporation and/or
Bank to obtain such
12
EXHIBIT 10.10 EXECUTION COPY
02/28/02
insurance, if the Board of Directors of the Corporation and/or Bank
determine that such coverage cannot be obtained at a reasonable price.
13. NOTICES. Except as otherwise provided in this Agreement, any notice
required or permitted to be given under this Agreement shall be deemed
properly given if in writing and if mailed by registered or certified
mail, postage prepaid with return receipt requested, to Executive's
residence, in the case of notices to Executive, and to the principal
executive offices of Corporation and Bank, in the case of notices to
Corporation and Bank.
14. 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 Boards of Directors of Corporation and 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.
15. ASSIGNMENT. This Agreement shall not be assignable by any party, except
by Corporation and Bank to any successor in interest to their respective
businesses.
16. ATTORNEY'S FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs,
and necessary disbursements in addition to any other relief that may be
proper.
17. INDEMNIFICATION. The Corporation and/or Bank will indemnify the
Executive, to the fullest extent permitted under Pennsylvania and
federal law, with respect to any threatened, pending or completed legal
or regulatory action, suit or proceeding brought against him by reason
of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation
or Bank as a director, officer, employee or agent of another person or
entity. To the fullest extent permitted by Pennsylvania and federal law,
the Corporation will, in advance of final disposition, pay any and all
expenses incurred by the Executive in connection with any threatened,
pending or completed legal or regulatory action, suit or proceeding with
respect to which he may be entitled to indemnification hereunder.
18. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements,
either oral or in writing, between the parties with respect to the
employment of the Executive by the Bank and/or Corporation, including
the Employment Agreement entered by Executive, Corporation and Bank of
Hanover and Trust Company and dated January 25, 2000, and this Agreement
contains all the covenants and agreements between the parties with
respect to employment.
13
EXHIBIT 10.10 EXECUTION COPY
02/28/02
19. SUCCESSORS; BINDING AGREEMENT.
(a) Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to
all or substantially all of the businesses and/or assets of
Corporation and/or its subsidiaries to expressly assume and agree
to perform this Agreement in the same manner and to the same
extent that Corporation would be required to perform it if no
such succession had taken place. Failure by Corporation to obtain
such assumption and agreement prior to the effectiveness of any
such succession shall constitute a breach of this Agreement and
the provisions of Section 3 of this Agreement shall apply.
(b) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. If
Executive should die after a Notice of Termination is delivered
by Executive, or following termination of Executive's employment
without Cause, and any amounts would be payable to Executive
under this Agreement if Executive had continued to live, all such
amounts shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other designee, or,
if there is no such designee, to Executive's estate.
20. ARBITRATION. Corporation, Bank and Executive recognize that in the event
a dispute should arise between them concerning the interpretation or
implementation of this Agreement (except for any enforcement sought with
respect to Sections 8, 9, 10 or 11 of this Agreement, which may be
litigated in Court), 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 are to be
submitted for resolution, in Philadelphia, Pennsylvania, to the American
Arbitration Association (the "Association") in accordance with the
Association's National Rules for the Resolution of Employment Disputes
or other applicable rules then in effect ("Rules"). Corporation, Bank or
Executive may initiate an arbitration proceeding at any time by giving
notice to the other in accordance with the Rules. Corporation and Bank
and Executive may, as a matter of right, mutually agree on the
appointment of a particular arbitrator from the Association's pool. The
arbitrator shall not be bound by the rules of evidence and procedure of
the courts of the Commonwealth of Pennsylvania but shall be bound by the
substantive law applicable to this Agreement. The decision of the
arbitrator, absent fraud, duress, incompetence or gross and obvious
error of fact, shall be final and binding upon the parties and shall be
enforceable in courts of proper jurisdiction. Following written notice
of a request for arbitration, Corporation, 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 in this Agreement or any enforcement sought
with respect to Sections 8, 9, 10 or 11 of this Agreement.
21. NO MITIGATION OR OFFSET. The Executive will not be required to mitigate
the amount of any payment provided for in this Agreement by seeking
employment or otherwise; nor will any amounts or benefits payable or
provided hereunder be reduced in the event he does not secure
employment, except as otherwise provided herein.
14
EXHIBIT 10.10 EXECUTION COPY
02/28/02
22. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and
effect.
23. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the domestic, internal laws of the Commonwealth of
Pennsylvania, without regard to its conflicts of laws principles.
24. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST: STERLING FINANCIAL CORPORATION
/s/ Xxxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxx
----------------------- -----------------------------
Xxxx X. Xxxxxx, Chairman
ATTEST: BANK OF LANCASTER COUNTY
/s/ Xxxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxx
--------------------- ------------------------------
Xxxx X. Xxxxxx, Chairman
WITNESS:
/s/ Xxxx X. Xxxx /s/ J. Xxxxxxx Xxxxxxx
----------------------- ----------------------------------
J. Xxxxxxx Xxxxxxx
"Executive"
15
