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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 25th day of January, 2000, among
STERLING FINANCIAL CORPORATION ("Corporation"), a Pennsylvania business
corporation having a place of business at 000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000, BANK OF HANOVER AND TRUST COMPANY ("Bank") a state chartered
bank having a place of business at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx
00000, and J. XXXXXXX XXXXXXX ("Executive"), an individual residing at 000
XxXxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, the Corporation is a registered bank holding company;
WHEREAS, the Bank is a subsidiary of the Corporation;
WHEREAS, Corporation and Bank desire to employ Executive to serve in
the capacity of Executive Vice President of Corporation and President and Chief
Executive Officer of 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, Hanover
Bancorp Inc. and Bank 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 he may
otherwise be entitled, or he may have, under the Severance Agreement
dated March 22, 1995 between Executive, Hanover Bancorp Inc. and Bank.
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 and President of the
Corporation so long as the assignment is consistent with the
Executive's office and duties. Executive shall be employed as Executive
Vice President of Corporation and President and Chief Executive Officer
of Bank, and shall hold such other titles as may be given to him from
time to time by the Board 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);
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provided, however, that this Section 2 shall not be construed as
preventing Executive from (a) engaging in activities incident or
necessary to personal 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 Board of Directors of Corporation and Bank,
or (c) being involved in any other activity with the prior approval of
the Board 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
or Bank, nor may the Executive serve as a director or officer or in any
other capacity in a company which competes with Corporation or Bank.
3. TERM OF AGREEMENT.
(a) This Agreement shall be for a three (3) year period (the
"Employment Period") beginning on the Effective Date as set
forth in Section 1.1(c) of the Agreement and Plan of Merger
between Corporation and Hanover Bancorp, Inc. (the "Effective
Date") (the "Agreement and Plan of Merger"), 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 Effective Date
(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). If the Agreement and Plan of Merger is terminated
pursuant to its terms, the parties hereto shall have no
further obligations under this Agreement and this Agreement
shall be null and void.
(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 each of Corporation and 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;
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(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
subsection (d) of this Section 3, 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 as determined by
an affirmative vote of seventy percent (70%) of the
disinterested members of the Board of Directors of
Corporation and Bank which brings public discredit to
Corporation or Bank; or
(viii) Executive's breach of fiduciary duty involving
personal profit.
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
Executive Vice President of Corporation and President and
Chief Executive Officer of Bank, (ii) a reassignment which
requires Executive to move his principal residence more than
fifty (50) miles from the Corporation's and 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) hereof, (iv) any reduction in
the Executive's Annual Base Salary as in effect on the date
hereof or as the same may be increased from time to time,
except such reductions that are the
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result of a national financial depression, or national or bank
emergency, or (v) any failure of Corporation and 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, life insurance, medical, health and
accident, disability or other employee plans of Corporation
and 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. 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 shall receive the additional retirement
benefits to which he would have been entitled had his
employment continued through the remaining term of the
Agreement. In lieu of continued pension, welfare and other
benefits, Executive may elect to 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 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.
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.
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(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 with or without a reasonable
accommodation and without posting a direct threat to himself
and others, for a period of one hundred eighty (180) days. 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, 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.
(g) In the event that this Agreement expires by its terms in
accordance with the provisions of Section 3(a) and other than
for Cause, the Bank will pay Executive within thirty (30) days
following termination of the Agreement and upon the receipt of
a mutually agreed release an amount equal to 2.0 times the
Executive's Agreed Compensation.
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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
$217,500 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 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 and/or
vacation 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.
However, Executive shall not be entitled to receive any
additional compensation from Corporation and Bank for failure
to take paid time off and/or vacation, nor shall Executive be
able to accumulate unused paid time off and/or vacation time
from one year to the next, except to the extent authorized by
the Boards of Directors of Corporation and Bank.
(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 which
would adversely affect Executive's rights or benefits
thereunder,
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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)
hereof.
(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 country club, social club or
service organization, including but not limited to, The
Hanover Country Club.
(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 (of the
entity affected by the
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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 (of the entity
affected by the transaction); provided, however, that
the provisions of (y) and (z) above shall not apply
to the merger of Bank within three (3) years of the
Effective Date in which the Bank is the not surviving
entity; 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 or Bank's then
outstanding securities, or
(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
subsection (f) of Section 3, (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
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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 shall receive
additional retirement benefits to which he would have been
entitled had his employment continued through the then
remaining term of the Agreement. In lieu of continued pension,
welfare and other benefits, Executive may elect to 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 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 CHANGE IN CONTROL.
(a) In the event that Executive's employment is involuntarily
terminated by Corporation and/or Bank without Cause and no
Change in Control shall have occurred at the date of such
termination, 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
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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 shall receive
additional retirement benefits to which he would have been
entitled had his employment continued through the then
remaining term of the Agreement. In lieu of continued pension,
welfare and other benefits, Executive may elect to 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 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 bank holding company)
or financial services industry, or (2) any other
activity in which Corporation or Bank or any of their
subsidiaries are engaged during the Employment
Period, and remain so engaged at the end of the
Employment Period, in any area in which, at any time
during the Employment Period or at the date of
termination of the
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Executive's employment, is within thirty (30) miles
of any branch location, office or other facility of
Corporation or Bank or any of their subsidiaries,
unless Executive exclusively performs all such
activity outside of said thirty (30) mile area (the
"Non-Competition Area"); or
(ii) provide financial or other assistance to any person,
firm, corporation, or enterprise engaged in (1) the
banking (including bank holding company) or financial
services industry, or (2) any other activity in which
Corporation or Bank or any of their subsidiaries are
engaged during the Employment Period, in the
Non-Competition Area; or
(iii) if employed in a capacity provided in (i) and (ii),
solicit current customers, during the term of this
Agreement, of Corporation, Bank or any Corporation
subsidiary in the Non-Competition Area; or
(iv) solicit employees of Corporation, Bank or any
Corporation subsidiary who are employed during the
term of this Agreement.
(b) It is expressly understood and agreed that, although Executive
and Corporation and Bank consider the restrictions contained
in Section 8(a) hereof 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) hereof is an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of
Section 8(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.
(c) The provisions of this Section 8 shall be applicable
commencing on the date 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), 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 hereof, the third 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 hereof, the second anniversary date of the
effective date of termination of employment;
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(v) 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, 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. 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 insurance, if the Board of Directors of the
Corporation and/or Bank determine that such coverage cannot be obtained
at a reasonable price.
11. 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.
12. 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.
13. ASSIGNMENT. This Agreement shall not be assignable by any party, except
by Corporation and Bank to any successor in interest to their
respective businesses.
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14. 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.
15. INDEMNIFICATION. The Corporation 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 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.
16. 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 and this
Agreement contains all the covenants and agreements between the parties
with respect to employment.
17. SUCCESSORS; BINDING AGREEMENT.
(a) Corporation and Bank 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 Bank to expressly assume and
agree to perform this Agreement in the same manner and to the
same extent that Corporation and Bank would be required to
perform it if no such succession had taken place. Failure by
Corporation and Bank 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. As used in this
Agreement, "Corporation" and "Bank" shall mean Sterling
Financial Corporation and Bank of Hanover and Trust Company,
as defined previously and any successor to their respective
businesses and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law or otherwise.
(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.
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18. ARBITRATION. Corporation, 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 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 herein.
19. 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.
20. 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.
21. 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.
22. 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST: STERLING FINANCIAL CORPORATION
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxx
------------------------------ ------------------------------
BANK OF HANOVER AND TRUST COMPANY
/s/ Xxxxxx X. Xxxxxxxx By /s/ Xxxxxxxx X. Xxxxxx
-------------------------------- -------------------------------
WITNESS:
/s/ Xxxx X. Xxxxxxxx /s/ J. Xxxxxxx Xxxxxxx
----------------------------------- ----------------------------------
"Executive"
