EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 23 day of July , 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, N.A. ("Bank"), a national banking
association having a place of business at, 000 Xxxxx Xxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxx 00000 and XXXXXX X. XXXXXXXX ("Executive"), an
individual residing at 00 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxx, 00000.
WITNESSETH:
WHEREAS, the Corporation is a registered financial holding company with
Bank of Lancaster County as one of its subsidiaries;
WHEREAS, Corporation and Bank desire to employ Executive to serve in the
capacity of President and Chief Operating Officer of Bank and Chief Banking
Officer of Corporation, effective January 1, 2002, and in the capacity of
President and Chief Executive Officer of Bank and Chief Banking Officer of
Corporation, effective May 1, 2002, 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.
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 Boards 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 President
and Chief Operating Officer of Bank and Chief Banking Officer of
Corporation effective January 1, 2002, and as President and Chief Executive
Officer of Bank and Chief Banking Officer of Corporation, effective May 1,
2002, 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, Bank and their subsidiaries during the Employment Period (as
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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 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 one year later 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
non-renewal 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 (2) 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 (2) 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 Boards of Directors of Corporation or Bank with respect to
its operations,
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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, Bank or their subsidiaries,
other than a failure resulting from Executive's incapacity
because of physical or mental illness, as provided in Section 3
(d) 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;
(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 or Corporation, Bank or their subsidiaries, which
could result in liability to Corporation, Bank or their
subsidiaries; or
(x) theft or material abuse by Executive of property of
Corporation, Bank or their subsidiaries, or the property of
customers, employees, 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
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and responsibilities inconsistent with Executive's status as President
and Chief Executive Officer of Bank or Chief Banking Officer of
Corporation, (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 location of 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 the
date this Agreement is executed 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 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) of this
Agreement 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). After this period of continuation of
benefits expires, Executive may elect to continue to participate, at
his own expense, in the medical insurance plan in effect at
Corporation or Bank until Executive's sixty-fifth (65th) birthday, if
and as long as Executive is eligible to participate under the terms
and/or conditions of the medical insurance plan. If permitted under
the terms of the plans, Executive may continue to participate in all
qualified and non-qualified retirement 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 the
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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.
(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.
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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 shall pay Executive an Annual Base Salary
during the Employment Period at the rate of Two Hundred Forty Thousand
Dollars ($240,000) per year (subject to applicable withholdings and
deductions) payable at the same times as salaries are payable to other
executive employees of Corporation. Corporation 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 any committee of such Board in the resolutions
authorizing such increases.
(b) BONUS. For services performed by Executive under this Agreement,
Corporation may, from time to time, pay a bonus or bonuses to
Executive as Corporation, 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) 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) hereof.
(e) 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
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procedures established by the Boards of Directors of Corporation and
Bank for their executive officers. Corporation shall reimburse
Executive for any and all initiation fees, membership dues,
assessments, and reasonable related business expenses associated with
the Executive's membership in a mutually agreed upon country club.
(f) 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
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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 Section 3(f) 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). After this period of continuation of
benefits expires, Executive may continue to participate, at his own
expense, in the medical insurance plan in effect at the Corporation or
Bank until the Executive's sixty-fifth (65th) birthday, if and as long
as Executive is eligible to participate under the terms and/or
conditions of the medical insurance plan. If permitted under the terms
of the plans, 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
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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 forgoing 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 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 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). After this period of continuation of
benefits expires, Executive may continue to participate, at his own
expense, in the medical insurance plan in effect at Corporation or
Bank until Executive's sixty-fifth (65th) birthday, if and as long as
Executive is eligible to participate under the terms and/or conditions
of the medical insurance plan. If permitted under the terms of the
plans, 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
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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 that 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 forgoing 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/or 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,
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including counties 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 or Bank
or any of their subsidiaries or affiliates, other than Town and
County, Inc. and/or 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 or any of its subsidiaries or
affiliates, on the Effective Date; 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 or any of its subsidiaries or affiliates, who is
employed on the Effective Date; 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
or any of its subsidiaries or affiliates or to seek, obtain or
accept employment with any person other than Corporation or any
of its 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
July 23, 2002 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
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(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
(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
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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
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. 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 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
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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
Change of Control Agreement dated July 7, 1999, and this Agreement contains
all the covenants and agreements between the parties with respect to
employment.
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 and Bank
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.
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(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 herein or any enforcement sought
with respect to Sections 8, 9 , 10 or 11.
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.
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.
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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
------------------------- ---------------------------
Vice President, Secretary Xxxx X. Xxxxxx, Chairman
BANK OF LANCASTER COUNTY, N.A.
/s/ Xxxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxx
------------------------- ---------------------------
Vice President, Secretary Xxxx X. Xxxxxx, Chairman
WITNESS:
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
--------------------- ------------------------------
Xxxxxx X. Xxxxxxxx
"Executive"
:138618
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