SEVERANCE AGREEMENT
MADE as of this 17th day of May, 1988, by and between Fulton Financial
Corporation, a Pennsylvania corporation with offices at One Penn Square, P.O.
4887, Lancaster, Pennsylvania 17604 (the Company) and R. Scott Smith, Jr., an
adult individual who resides at 1348 Silver Spring Road, Holtwood, Pennsylvania
17532 (Executive).
Background
Executive is a Senior Vice President of the Company, a Pennsylvania bank
holding company, and an Executive Vice President of Fulton Bank, the principal
subsidiary and flagship bank of the Company. Executive is an integral part of
the management team of the Company and Bank.
As a result of changes in federal and state banking laws, there has been a
dramatic increase in the number of mergers and other acquisitions of
Pennsylvania bank and bank holding companies. While the Company remains firmly
committed to its policy of remaining a strong, independent regional bank holding
company, it recognizes that it might nevertheless be acquired as a result of an
unsolicited takeover attempt or in a negotiated transaction. Executive will
play a critical role in any such acquisition, as it falls principally upon him
and the other members of Management vigorously and aggressively to represent and
to protect the interests of the shareholders of the Company.
The Company believes that Executive should not be forced to sacrifice his
future financial security in order to fulfill his responsibilities to the
shareholders. The Board of Directors of the Company has carefully considered
this problem and has determined that it should be addressed. Specifically, the
Board of Directors has concluded that basic financial protection should be
provided to Executive in the form of certain limited severance benefits payable
in the event that he is discharged or resigns following, and for reasons
relating to a change in control of the Company.
The purpose of this Agreement is to define these severance benefits and to
specify the conditions under which they are to be paid. This Agreement is not
intended to affect the terms of Executive's employment in the absence of a
change in control of the Company. Accordingly, although this Agreement will
take effect upon execution as a binding legal obligation of the Company, it will
become operative only upon a change in control of the Company as that concept is
defined below.
WITNESSETH:
NOW, THEREFORE, in consideration of Executive's continuing service to the
Company and of the mutual covenants and undertakings hereinafter set forth, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Undertaking of the Company
The Company shall provide to Executive the severance benefits specified
in Paragraph 6 below in the event that any time within 36 months following a
Change in Control of the Company:
(a) Executive is discharged by the Company, other than for Cause pursuant
to Paragraph 3 below or for Disability pursuant to Paragraph 4 below;
or
(b) Executive resigns from the Company for Good Reason pursuant to
Paragraph 5 below.
2. Change in Control
(a) For purposes of this Agreement, a Change in Control of the Company
shall mean a change in control of the kind that would be required to be
reported in response to Item 1 of Securities and Exchange Commission
Form 8-K promulgated under the Securities Exchange Act of 1934 and as
in effect on the date hereof.
(b) Without limitation of the foregoing, a Change in Control of the Company
shall be deemed to have occurred upon the occurrence of any of the
following events:
(1) Any person or group of persons acting in concert, shall have
acquired, directly or indirectly, beneficial ownership of 20
percent or more of the outstanding shares of the voting stock of
the Company;
(2) The composition of the Board of Directors of the Company shall
have changed such that during any period of two consecutive
years during the term of this Agreement, the persons who at the
beginning of such period were members of the Board of Directors,
unless the nomination or election of each director who was not a
director at the beginning of such period was approved in advance
by directors representing not less than two-thirds of the
directors then in office who were directors at the beginning of
the period; or
(3) The Company shall be merged or consolidated with or its assets
purchased by another corporation and as a result of such merger,
consolidation or sale of assets, less than a majority of the
outstanding voting stock of the surviving, resulting or
purchasing corporation is owned, immediately after the
transaction, by the holders of the voting stock of the Company
outstanding immediately before the transaction.
(c) For purposes of Paragraph 2(b)(1) above, a person shall be deemed to be
the beneficial owner of any shares which he or any of his affiliates or
associates (i) owns, directly or indirectly, (ii) has the right to
acquire, or (iii) has the right to vote or direct the voting thereof
pursuant to any agreement, arrangement or understanding.
3. Discharge for Cause
(a) The Company may at any time following a Change in Control discharge
Executive for Cause, in which event Executive shall not be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company shall have Cause to
discharge Executive only under the following circumstances:
(i) Executive shall have committed an act of dishonesty constituting a
felony and resulting or intending to result directly or indirectly in
gain or personal enrichment at the expense of the Company; or
(ii) Executive shall have deliberately and intentionally refused (for
reasons other than incapacity due to accident or physical or mental
illness) to perform his duties to the Company for a period of 30
consecutive days following the receipt by him of written notice from
the Company setting forth in detail the facts upon which the Company
relies in concluding that Executive has deliberately and
intentionally refused to perform such duties.
4. Discharge for Disability
(a) The Company may at any time following a Change in Control discharge
Executive for Disability as provided in this Paragraph 4, in which event
Executive shall not be entitled to receive the severance benefits
specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company may discharge Executive for
Disability only under the following circumstances:
(i) Executive shall have been unable, for reasons of incapacity due to
accident or physical or mental illness, for a period of six
consecutive months to perform his duties to the Company.
(ii) The Company, following the expiration of such period of six
consecutive months, shall have to give Executive 30 days written
notice of its intention to discharge him for disability and he shall
not within that 30 day period have returned to the performance of his
duties to the Company on a full-time basis; and
(iii) The Company shall provide or cause to be provided to Executive
short-term and long-term disability benefits and fringe benefits not
less generous than the following: (A) Executive shall receive each
month for six months following the date of his discharge for
Disability his full month salary (as in effect immediately before his
discharge for Disability); (B) Executive shall receive each month
thereafter 60 percent of his monthly salary (as in effect immediately
before his discharge for Disability) until his death or until
December 31 of the calendar year in which he attains age 65,
whichever shall first occur; and (c) Executive shall receive those
fringe benefits customarily provided by the Company to disabled
former employees, which
benefits shall include, but shall not be limited to, life, medical,
health, accident and disability insurance and a survivor's income
benefit.
(c) In the event that Executive shall at any time cease to be disabled
following his discharge for Disability, the Company shall do one of the
following:
(i) Reappoint Executive to his position with the Company, with full
salary and benefits, as they existed immediately before his discharge
for Disability, in which case this Agreement shall remain in full
force and effect as though Executive had never been so discharged; or
(ii) Treat Executive as though he has been discharged for reasons other
than Cause or Disability, in which case Executive shall be entitled
to receive the severance benefits specified in Paragraph 6 below.
(d) In the event that Executive shall disagree with a determination on the
part of the Company that he is disabled or in the event that the Company
shall disagree with a determination on the part of Executive that he is
no longer disabled, the matter shall be submitted to an impartial and
reputable medical doctor to be selected by mutual agreement of the
parties. In the event that Executive and the Company are unable to
agree, the matter shall be submitted to an impartial and reputable
medical doctor to be selected, upon petition by either party, by the
Lancaster County Court of Common Pleas.
5. Resignation for Good Reasons
(a) Executive may at any time following a Change in Control resign from the
Company for Good Reason, in which event Executive shall be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, Executive shall have Good Reason to
resign under the following circumstances:
(i) The Company, without Executive's prior written consent, shall have
changed or attempted to change in any significant respect the
authority, duties, compensation, benefits or other terms or
conditions of Executive's employment; or
(ii) Executive shall have determined in good faith and in his sole and
absolute discretion that he is unable to work harmoniously and
effectively with the new management of the Company or that he is
otherwise unable effectively to carry out his duties and discharge
his responsibilities to the Company.
6. Severance Benefits
The severance benefits to be provided to Executive by the Company under
this Agreement are as follows:
(a) Salary Continuation: The Company shall pay to Executive each month during
-------------------
the Severance Benefit Period an amount equal to one-twelfth of his base
annual salary.
Executive's base annual salary shall be deemed to be an amount equal to
twenty percent (20%) of the aggregate salary paid to Executive by or on
behalf of the Company and the Bank during the most recent five (5)
taxable years ending before the Change of Control shall occur. The
payment to be made in respect of each month shall be made on or be fore
the 15th day of the next following month. In the event that the Severance
Benefit Period begins or ends on other than, respectively, the first or
last day of a calendar month, the payment to be made in respect of that
month shall be prorated accordingly. It is understood that the Company
shall withhold from each monthly payment such amounts as may be required
under any applicable federal, state or local income tax law.
(b) Fringe Benefits: The Company shall at its expense provide to Executive
---------------
throughout Severance Benefit Period life, medical, health, accident and
disability insurance and a survivor's income benefit in form, substance
and amount which is in each case substantially equivalent to that
provided to him immediately before the Change in Control or immediately
before the commencement of the Severance Benefit Period, whichever
Executive shall in each case select.
7. Severance Benefit Period
The Severance Benefit Period shall commence upon the effective date of
Executive's discharge (for reasons other than Cause or Disability) or
resignation (for Good Reason) and shall terminate upon the first to occur of the
following events:
(a) The expiration of 36 months following the effective date of Executive's
discharge or resignation;
(b) The expiration of the calendar year in which Executive attains age 65;
(c) Executive's death; or
(d) The election of Executive to terminate the Severance Benefit period
pursuant to Paragraph 8(b) below.
8. Covenant Not To Compete
(a) Executive agrees that he will not without the prior written consent of
the Company at any time during the Severance Benefit Period become an
officer, director, or employee of or consultant to any bank, bank
holding company or other financial services institution.
(b) Executive may elect at any time to terminate the Severance Benefit
Period by delivering written notice to the Company in which event the
covenant not to compete set forth in Paragraph 8(a) above shall expire
and have no further force or effect.
(c) In the event of any breach by Executive of the covenant not to compete
set forth in Paragraph 8(a) above, the parties agree that the exclusive
remedy of the Company shall be to obtain an injunction, order for
specific performance, or other form of equitable relief from a court of
competent jurisdiction and that the Company shall not under any
circumstances be entitled to recover monetary damages from Executive by
reason of any such breach.
9. Mitigation and Setoff
(a) Executive shall not be required to mitigate the amount of any payment or
benefit provided for in Paragraph 6 above by seeking employment or
otherwise and the Company shall not be entitled to setoff against the
amount of any payment or benefit provided for in Paragraph 6 above any
amounts earned by Executive in other employment during the Severance
Benefit Period.
(b) The Company hereby waives any and all rights to set off in respect to
any claim, debt, obligation or other liability of any kind whatsoever,
against any payment or benefit provided for in Paragraph 6 above.
10. Attorneys' Fees and Related Expenses
All attorneys' fees and related expenses incurred by Executive in
connection with or relating to enforcement by him of his rights under this
Agreement shall be paid for in full by the Company.
11. Successors and Parties in Interest
(a) This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns, including, without
limitation, any corporation which acquires, directly or indirectly, by
purchase, merger, consolidation or otherwise, all or substantially all
of the business or assets of the Company. Without limitation of the
foregoing, the Company shall require any such successor, by agreement in
form and substance satisfactory to Executive, expressly to assume and
agree to perform this Agreement in the same manner and to the same
extent that it is required to be performed by the Company.
(b) This Agreement is binding upon and shall inure to the benefit of
Executive, his heirs and personal representatives.
12. Rights under Other Plans
This Agreement is not intended to reduce, restrict or eliminate any
benefit to which Executive may otherwise be entitled at the time of his
discharge or resignation under any employee benefit plan of the Company then in
effect.
13. Termination
This Agreement may not be terminated except by mutual consent of the
parties, as evidenced by a written instrument duly executed by the Company and
by Executive.
14. Notices
All notices and other communications required to be given hereunder shall
be in writing and shall be deemed to have been given or made when hand delivered
or when mailed, certified mail, return receipt requested, to the Company or to
Executive, as the case may be, at their respective addresses set forth above.
15. Severability
In the event that any provision of this Agreement shall be held to be
invalid or unenforceably by any court of competent jurisdiction, such provision
shall be deemed severable from the remainder of the Agreement and such holding
shall not invalidate or render unenforceable any other provision of this
Agreement. It is the intention of the parties hereto that Executive shall
receive the maximum severance benefits under this Severance Agreement which
Executive may receive without any payment of such benefits being classified as
an "excess parachute payment" (as defined in Section 280G of the Internal
Revenue Code) and to the extent that payment of such benefits hereunder would be
classified as an "excess parachute payment," such payment shall be automatically
reduced to the maximum amount which would not be classified as an "excess
parachute payment."
16. Governing Law, Jurisdiction and Venue
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania. In the event that either party shall
institute any suit or other legal proceeding, whether in law or in equity,
arising from or relating to this Agreement, the courts of the Commonwealth of
Pennsylvania shall have exclusive jurisdiction and venue shall lie exclusively
in the Court of Common Pleas of Lancaster County.
17. Entire Agreement
This Agreement constitutes the entire agreement between the Company and
Executive concerning the subject matter hereof and supersedes all prior written
or oral agreements or understandings between them. No term or provision of this
Agreement may be changed, waived, amended or terminated, except by written
instrument duly executed by the Company and by Executive.
IN WITNESS WHEREOF, this Agreement is executed the day and year first above
written.
ATTEST: FULTON FINANCIAL CORPORATION
By: /s/ Kenneth E. Shenenberger By: /s/ Robert D. Garner
--------------------------- --------------------------
Title: Secretary Title: Chairman
(CORPORATE SEAL)
WITNESS:
/s/ Kenneth E. Shenenberger /s/ R. Scott Smith, Jr.
- --------------------------- -----------------------
R. SCOTT SMITH, JR.
SEVERANCE AGREEMENT
MADE as of this 17th day of May, 1988, by and between Fulton Financial
Corporation, a Pennsylvania corporation with offices at One Penn Square, P.O.
4887, Lancaster, Pennsylvania 17604 (the Company) and Richard J. Ashby, Jr., an
adult individual who resides at 127 St. Thomas Road, Lancaster, Pennsylvania
17601 (Executive).
Background
Executive is a Senior Vice President of the Company, a Pennsylvania bank
holding company, and an Executive Vice President of Fulton Bank, the principal
subsidiary and flagship bank of the Company. Executive is an integral part of
the management team of the Company and Bank.
As a result of changes in federal and state banking laws, there has been a
dramatic increase in the number of mergers and other acquisitions of
Pennsylvania bank and bank holding companies. While the Company remains firmly
committed to its policy of remaining a strong, independent regional bank holding
company, it recognizes that it might nevertheless be acquired as a result of an
unsolicited takeover attempt or in a negotiated transaction. Executive will
play a critical role in any such acquisition, as it falls principally upon him
and the other members of Management vigorously and aggressively to represent and
to protect the interests of the shareholders of the Company.
The Company believes that Executive should not be forced to sacrifice his
future financial security in order to fulfill his responsibilities to the
shareholders. The Board of Directors of the Company has carefully considered
this problem and has determined that it should be addressed. Specifically, the
Board of Directors has concluded that basic financial protection should be
provided to Executive in the form of certain limited severance benefits payable
in the event that he is discharged or resigns following, and for reasons
relating to a change in control of the Company.
The purpose of this Agreement is to define these severance benefits and to
specify the conditions under which they are to be paid. This Agreement is not
intended to affect the terms of Executive's employment in the absence of a
change in control of the Company. Accordingly, although this Agreement will
take effect upon execution as a binding legal obligation of the Company, it will
become operative only upon a change in control of the Company as that concept is
defined below.
WITNESSETH:
NOW, THEREFORE, in consideration of Executive's continuing service to the
Company and of the mutual covenants and undertakings hereinafter set forth, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Undertaking of the Company
The Company shall provide to Executive the severance benefits specified
in Paragraph 6 below in the event that any time within 36 months following a
Change in Control of the Company:
(a) Executive is discharged by the Company, other than for Cause pursuant
to Paragraph 3 below or for Disability pursuant to Paragraph 4 below;
or
(b) Executive resigns from the Company for Good Reason pursuant to
Paragraph 5 below.
2. Change in Control
(a) For purposes of this Agreement, a Change in Control of the Company
shall mean a change in control of the kind that would be required to be
reported in response to Item 1 of Securities and Exchange Commission
Form 8-K promulgated under the Securities Exchange Act of 1934 and as
in effect on the date hereof.
(b) Without limitation of the foregoing, a Change in Control of the Company
shall be deemed to have occurred upon the occurrence of any of the
following events:
(1) Any person or group of persons acting in concert, shall have
acquired, directly or indirectly, beneficial ownership of 20
percent or more of the outstanding shares of the voting stock of
the Company;
(2) The composition of the Board of Directors of the Company shall
have changed such that during any period of two consecutive years
during the term of this Agreement, the persons who at the beginning
of such period were members of the Board of Directors, unless the
nomination or election of each director who was not a director at
the beginning of such period was approved in advance by directors
representing not less than two-thirds of the directors then in
office who were directors at the beginning of the period; or
(3) The Company shall be merged or consolidated with or its assets
purchased by another corporation and as a result of such merger,
consolidation or sale of assets, less than a majority of the
outstanding voting stock of the surviving, resulting or purchasing
corporation is owned, immediately after the transaction, by the
holders of the voting stock of the Company outstanding immediately
before the transaction.
(c) For purposes of Paragraph 2(b)(1) above, a person shall be deemed to be
the beneficial owner of any shares which he or any of his affiliates or
associates (i) owns, directly or indirectly, (ii) has the right to
acquire, or (iii) has the right to vote or direct the voting thereof
pursuant to any agreement, arrangement or understanding.
3. Discharge for Cause
(a) The Company may at any time following a Change in Control discharge
Executive for Cause, in which event Executive shall not be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company shall have Cause to
discharge Executive only under the following circumstances:
(i) Executive shall have committed an act of dishonesty constituting a
felony and resulting or intending to result directly or indirectly
in gain or personal enrichment at the expense of the Company; or
(ii) Executive shall have deliberately and intentionally refused (for
reasons other than incapacity due to accident or physical or
mental illness) to perform his duties to the Company for a period
of 30 consecutive days following the receipt by him of written
notice from the Company setting forth in detail the facts upon
which the Company relies in concluding that Executive has
deliberately and intentionally refused to perform such duties.
4. Discharge for Disability
(a) The Company may at any time following a Change in Control discharge
Executive for Disability as provided in this Paragraph 4, in which
event Executive shall not be entitled to receive the severance benefits
specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company may discharge Executive for
Disability only under the following circumstances:
(i) Executive shall have been unable, for reasons of incapacity due to
accident or physical or mental illness, for a period of six
consecutive months to perform his duties to the Company.
(ii) The Company, following the expiration of such period of six
consecutive months, shall have to give Executive 30 days written
notice of its intention to discharge him for disability and he
shall not within that 30 day period have returned to the
performance of his duties to the Company on a full-time basis; and
(iii)The Company shall provide or cause to be provided to Executive
short-term and long-term disability benefits and fringe benefits
not less generous than the following: (A) Executive shall receive
each month for six months following the date of his discharge for
Disability his full month salary (as in effect immediately before
his discharge for Disability); (B) Executive shall receive each
month thereafter 60 percent of his monthly salary (as in effect
immediately before his discharge for Disability) until his death
or until December 31 of the calendar year in which he attains age
65, whichever shall first occur; and (c) Executive shall receive
those fringe benefits customarily provided by the Company to
disabled former employees, which benefits shall include,
but shall not be limited to, life, medical, health, accident and
disability insurance and a survivor's income benefit.
(c) In the event that Executive shall at any time cease to be disabled
following his discharge for Disability, the Company shall do one of the
following:
(i) Reappoint Executive to his position with the Company, with full
salary and benefits, as they existed immediately before his
discharge for Disability, in which case this Agreement shall
remain in full force and effect as though Executive had never been
so discharged; or
(ii) Treat Executive as though he has been discharged for reasons other
than Cause or Disability, in which case Executive shall be
entitled to receive the severance benefits specified in Paragraph
6 below.
(d) In the event that Executive shall disagree with a determination on the
part of the Company that he is disabled or in the event that the
Company shall disagree with a determination on the part of Executive
that he is no longer disabled, the matter shall be submitted to an
impartial and reputable medical doctor to be selected by mutual
agreement of the parties. In the event that Executive and the Company
are unable to agree, the matter shall be submitted to an impartial and
reputable medical doctor to be selected, upon petition by either party,
by the Lancaster County Court of Common Pleas.
5. Resignation for Good Reasons
(a) Executive may at any time following a Change in Control resign from the
Company for Good Reason, in which event Executive shall be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, Executive shall have Good Reason to
resign under the following circumstances:
(i) The Company, without Executive's prior written consent, shall
have changed or attempted to change in any significant respect
the authority, duties, compensation, benefits or other terms or
conditions of Executive's employment; or
(ii) Executive shall have determined in good faith and in his sole
and absolute discretion that he is unable to work harmoniously
and effectively with the new management of the Company or that
he is otherwise unable effectively to carry out his duties and
discharge his responsibilities to the Company.
6. Severance Benefits
The severance benefits to be provided to Executive by the Company under
this Agreement are as follows:
(a) Salary Continuation: The Company shall pay to Executive each month
-------------------
during the Severance Benefit Period an amount equal to one-twelfth of
his base annual salary.
Executive's base annual salary shall be deemed to be an amount equal to
twenty percent (20%) of the aggregate salary paid to Executive by or on
behalf of the Company and the Bank during the most recent five (5)
taxable years ending before the Change of Control shall occur. The
payment to be made in respect of each month shall be made on or before
the 15th day of the next following month. In the event that the
Severance Benefit Period begins or ends on other than, respectively,
the first or last day of a calendar month, the payment to be made in
respect of that month shall be prorated accordingly. It is understood
that the Company shall withhold from each monthly payment such amounts
as may be required under any applicable federal, state or local income
tax law.
(b) Fringe Benefits: The Company shall at its expense provide to Executive
---------------
throughout Severance Benefit Period life, medical, health, accident and
disability insurance and a survivor's income benefit in form, substance
and amount which is in each case substantially equivalent to that
provided to him immediately before the Change in Control or immediately
before the commencement of the Severance Benefit Period, whichever
Executive shall in each case select.
7. Severance Benefit Period
The Severance Benefit Period shall commence upon the effective date of
Executive's discharge (for reasons other than Cause or Disability) or
resignation (for Good Reason) and shall terminate upon the first to occur of the
following events:
(a) The expiration of 36 months following the effective date of Executive's
discharge or resignation;
(b) The expiration of the calendar year in which Executive attains age 65;
(c) Executive's death; or
(d) The election of Executive to terminate the Severance Benefit period
pursuant to Paragraph 8(b) below.
8. Covenant Not To Compete
(a) Executive agrees that he will not without the prior written consent of
the Company at any time during the Severance Benefit Period become an
officer, director, or employee of or consultant to any bank, bank
holding company or other financial services institution.
(b) Executive may elect at any time to terminate the Severance Benefit
Period by delivering written notice to the Company in which event the
covenant not to compete set forth in Paragraph 8(a) above shall expire
and have no further force or effect.
(c) In the event of any breach by Executive of the covenant not to compete
set forth in Paragraph 8(a) above, the parties agree that the exclusive
remedy of the Company shall be to obtain an injunction, order for
specific performance, or other form of equitable relief from a court of
competent jurisdiction and that the Company shall not under any
circumstances be entitled to recover monetary damages from Executive by
reason of any such breach.
9. Mitigation and Setoff
(a) Executive shall not be required to mitigate the amount of any payment
or benefit provided for in Paragraph 6 above by seeking employment or
otherwise and the Company shall not be entitled to setoff against the
amount of any payment or benefit provided for in Paragraph 6 above any
amounts earned by Executive in other employment during the Severance
Benefit Period.
(b) The Company hereby waives any and all rights to set off in respect to
any claim, debt, obligation or other liability of any kind whatsoever,
against any payment or benefit provided for in Paragraph 6 above.
10. Attorneys' Fees and Related Expenses
All attorneys' fees and related expenses incurred by Executive in
connection with or relating to enforcement by him of his rights under this
Agreement shall be paid for in full by the Company.
11. Successors and Parties in Interest
(a) This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns, including, without
limitation, any corporation which acquires, directly or indirectly, by
purchase, merger, consolidation or otherwise, all or substantially all
of the business or assets of the Company. Without limitation of the
foregoing, the Company shall require any such successor, by agreement
in form and substance satisfactory to Executive, expressly to assume
and agree to perform this Agreement in the same manner and to the same
extent that it is required to be performed by the Company.
(b) This Agreement is binding upon and shall inure to the benefit of
Executive, his heirs and personal representatives.
12. Rights under Other Plans
This Agreement is not intended to reduce, restrict or eliminate any
benefit to which Executive may otherwise be entitled at the time of his
discharge or resignation under any employee benefit plan of the Company then in
effect.
13. Termination
This Agreement may not be terminated except by mutual consent of the
parties, as evidenced by a written instrument duly executed by the Company and
by Executive.
14. Notices
All notices and other communications required to be given hereunder shall
be in writing and shall be deemed to have been given or made when hand delivered
or when mailed, certified mail, return receipt requested, to the Company or to
Executive, as the case may be, at their respective addresses set forth above.
15. Severability
In the event that any provision of this Agreement shall be held to be
invalid or unenforceably by any court of competent jurisdiction, such provision
shall be deemed severable from the remainder of the Agreement and such holding
shall not invalidate or render unenforceable any other provision of this
Agreement. It is the intention of the parties hereto that Executive shall
receive the maximum severance benefits under this Severance Agreement which
Executive may receive without any payment of such benefits being classified as
an "excess parachute payment" (as defined in Section 280G of the Internal
Revenue Code) and to the extent that payment of such benefits hereunder would be
classified as an "excess parachute payment," such payment shall be automatically
reduced to the maximum amount which would not be classified as an "excess
parachute payment."
16. Governing Law, Jurisdiction and Venue
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania. In the event that either party shall
institute any suit or other legal proceeding, whether in law or in equity,
arising from or relating to this Agreement, the courts of the Commonwealth of
Pennsylvania shall have exclusive jurisdiction and venue shall lie exclusively
in the Court of Common Pleas of Lancaster County.
17. Entire Agreement
This Agreement constitutes the entire agreement between the Company and
Executive concerning the subject matter hereof and supersedes all prior written
or oral agreements or understandings between them. No term or provision of this
Agreement may be changed, waived, amended or terminated, except by written
instrument duly executed by the Company and by Executive.
IN WITNESS WHEREOF, this Agreement is executed the day and year first above
written.
ATTEST: FULTON FINANCIAL CORPORATION
By: /s/ Kenneth E. Shenenberger By: /s/ Robert D. Garner
--------------------------- ------------------------------
Title: Secretary Title: Chairman
(CORPORATE SEAL)
WITNESS:
/s/ Kenneth E. Shenenberger /s/ Richard J. Ashby, Jr.
- --------------------------- -------------------------
RICHARD J. ASHBY, JR.
SEVERANCE AGREEMENT
MADE as of this 19/th/ day of November, 1992 by and between Fulton
Financial Corporation, a Pennsylvania corporation with offices at One Penn
Square, P.O. 4887, Lancaster, Pennsylvania 17604 (the Company) and Charles J.
Nugent, an adult individual who resides at 313 Box Elder Drive, West Chester,
Pennsylvania 19380 (Executive).
Background
Executive has been appointed Executive Vice President and Chief Financial
Officer of the Company, a Pennsylvania bank holding company, and is an integral
part of the management team of the Company.
As a result of changes in federal and state banking laws, there has been a
dramatic increase in the number of mergers and other acquisitions of
Pennsylvania bank and bank holding companies. While the Company remains firmly
committed to its policy of remaining a strong, independent regional bank holding
company, it recognizes that it might nevertheless be acquired as a result of an
unsolicited takeover attempt or in a negotiated transaction. Executive will
play a critical role in any such acquisition, as it falls principally upon him
and the other members of Management vigorously and aggressively to represent and
to protect the interests of the shareholders of the Company.
The Company believes that Executive should not be forced to sacrifice his
future financial security in order to fulfill his responsibilities to the
shareholders. The Board of Directors of the Company has carefully considered
this problem and has determined that it should be addressed. Specifically, the
Board of Directors has concluded that basic financial protection should be
provided to Executive in the form of certain limited severance benefits payable
in the event that he is discharged or resigns following, and for reasons
relating to a change in control of the Company.
The purpose of this Agreement is to define these severance benefits and to
specify the conditions under which they are to be paid. This Agreement is not
intended to affect the terms of Executive's employment in the absence of a
change in control of the Company. Accordingly, although this Agreement will
take effect upon execution as a binding legal obligation of the Company, it will
become operative only upon a change in control of the Company as that concept is
defined below.
WITNESSETH:
NOW, THEREFORE, in consideration of Executive's continuing service to the
Company and of the mutual covenants and undertakings hereinafter set forth, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Undertaking of the Company
The Company shall provide to Executive the severance benefits
specified in Paragraph 6 below in the event that any time within 36 months
following a Change in Control of the Company:
(a) Executive is discharged by the Company, other than for Cause pursuant
to Paragraph 3 below or for Disability pursuant to Paragraph 4 below;
or
(b) Executive resigns from the Company for Good Reason pursuant to
Paragraph 5 below.
2. Change in Control
(a) For purposes of this Agreement, a Change in Control of the Company
shall mean a change in control of the kind that would be required to
be reported in response to Item 1 of Securities and Exchange
Commission Form 8-K promulgated under the Securities Exchange Act of
1934 and as in effect on the date hereof.
(b) Without limitation of the foregoing, a Change in Control of the
Company shall be deemed to have occurred upon the occurrence of any of
the following events:
(1) Any person or group of persons acting in concert, shall have
acquired, directly or indirectly, beneficial ownership of 20
percent or more of the outstanding shares of the voting stock of
the Company;
(2) The composition of the Board of Directors of the Company shall
have changed such that during any period of two consecutive years
during the term of this Agreement, the persons who at the
beginning of such period were members of the Board of Directors,
unless the nomination or election of each director who was not a
director at the beginning of such period was approved in advance
by directors representing not less than two-thirds of the
directors then in office who were directors at the beginning of
the period; or
(3) The Company shall be merged or consolidated with or its assets
purchased by another corporation and as a result of such merger,
consolidation or sale of assets, less than a majority of the
outstanding voting stock of the surviving, resulting or
purchasing corporation is owned, immediately after the
transaction, by the holders of the voting stock of the Company
outstanding immediately before the transaction.
(c) For purposes of Paragraph 2(b)(1) above, a person shall be deemed to
be the beneficial owner of any shares which he or any of his
affiliates or associates (i) owns, directly or indirectly, (ii) has
the right to acquire, or (iii) has the right to vote or direct the
voting thereof pursuant to any agreement, arrangement or
understanding.
3. Discharge for Cause
(a) The Company may at any time following a Change in Control discharge
Executive for Cause, in which event Executive shall not be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company shall have Cause to
discharge Executive only under the following circumstances:
(i) Executive shall have committed an act of dishonesty constituting
a felony and resulting or intending to result directly or
indirectly in gain or personal enrichment at the expense of the
Company; or
(ii) Executive shall have deliberately and intentionally refused (for
reasons other than incapacity due to accident or physical or
mental illness) to perform his duties to the Company for a period
of 30 consecutive days following the receipt by him of written
notice from the Company setting forth in detail the facts upon
which the Company relies in concluding that Executive has
deliberately and intentionally refused to perform such duties.
4. Discharge for Disability
(a) The Company may at any time following a Change in Control discharge
Executive for Disability as provided in this Paragraph 4, in which
event Executive shall not be entitled to receive the severance
benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company may discharge Executive
for Disability only under the following circumstances:
(i) Executive shall have been unable, for reasons of incapacity due
to accident or physical or mental illness, for a period of six
consecutive months to perform his duties to the Company.
(ii) The Company, following the expiration of such period of six
consecutive months, shall have to give Executive 30 days
written notice of its intention to discharge him for disability
and he shall not within that 30 day period have returned to the
performance of his duties to the Company on a full-time basis;
and
(iii) The Company shall provide or cause to be provided to Executive
short-term and long-term disability benefits and fringe
benefits not less generous than the following: (A) Executive
shall receive each month for six months following the date of
his discharge for Disability his full month salary (as in
effect immediately before his discharge for Disability); (B)
Executive shall receive each month thereafter 60 percent of his
monthly salary (as in effect immediately before his discharge
for Disability) until his death or until December 31 of the
calendar year in which he attains age 65, whichever shall first
occur; and (c) Executive shall receive those fringe benefits
customarily provided by the Company to disabled former
employees, which benefits shall include,
but shall not be limited to, life, medical, health, accident and
disability insurance and a survivor's income benefit.
(c) In the event that Executive shall at any time cease to be disabled
following his discharge for Disability, the Company shall do one of
the following:
(i) Reappoint Executive to his position with the Company, with full
salary and benefits, as they existed immediately before his
discharge for Disability, in which case this Agreement shall
remain in full force and effect as though Executive had never
been so discharged; or
(ii) Treat Executive as though he has been discharged for reasons
other than Cause or Disability, in which case Executive shall be
entitled to receive the severance benefits specified in Paragraph
6 below.
(d) In the event that Executive shall disagree with a determination on the
part of the Company that he is disabled or in the event that the
Company shall disagree with a determination on the part of Executive
that he is no longer disabled, the matter shall be submitted to an
impartial and reputable medical doctor to be selected by mutual
agreement of the parties. In the event that Executive and the Company
are unable to agree, the matter shall be submitted to an impartial and
reputable medical doctor to be selected, upon petition by either
party, by the Lancaster County Court of Common Pleas.
5. Resignation for Good Reasons
(a) Executive may at any time following a Change in Control resign from
the Company for Good Reason, in which event Executive shall be
entitled to receive the severance benefits specified in Paragraph 6
below.
(b) For purposes of this Agreement, Executive shall have Good Reason to
resign under the following circumstances:
(i) The Company, without Executive's prior written consent, shall
have changed or attempted to change in any significant respect
the authority, duties, compensation, benefits or other terms or
conditions of Executive's employment; or
(ii) Executive shall have determined in good faith and in his sole and
absolute discretion that he is unable to work harmoniously and
effectively with the new management of the Company or that he is
otherwise unable effectively to carry out his duties and
discharge his responsibilities to the Company.
6. Severance Benefits
The severance benefits to be provided to Executive by the Company under
this Agreement are as follows:
(a) Salary Continuation: The Company shall pay to Executive each month
-------------------
during the Severance Benefit Period an amount equal to one-twelfth of
his base annual salary.
Executive's base annual salary shall be deemed to be an amount equal
to twenty percent (20%) of the aggregate salary paid to Executive by
or on behalf of the Company and the Bank during the most recent five
(5) taxable years ending before the Change of Control shall occur. The
payment to be made in respect of each month shall be made on or before
the 15/th/ day of the next following month. In the event that the
Severance Benefit Period begins or ends on other than, respectively,
the first or last day of a calendar month, the payment to be made in
respect of that month shall be prorated accordingly. It is understood
that the Company shall withhold from each monthly payment such amounts
as may be required under any applicable federal, state or local income
tax law.
(b) Fringe Benefits: The Company shall at its expense provide to
---------------
Executive throughout Severance Benefit Period life, medical, health,
accident and disability insurance and a survivor's income benefit in
form, substance and amount which is in each case substantially
equivalent to that provided to him immediately before the Change in
Control or immediately before the commencement of the Severance
Benefit Period, whichever Executive shall in each case select.
7. Severance Benefit Period
The Severance Benefit Period shall commence upon the effective date of
Executive's discharge (for reasons other than Cause or Disability) or
resignation (for Good Reason) and shall terminate upon the first to occur of the
following events:
(a) The expiration of 36 months following the effective date of
Executive's discharge or resignation;
(b) The expiration of the calendar year in which Executive attains age 65;
(c) Executive's death; or
(d) The election of Executive to terminate the Severance Benefit period
pursuant to Paragraph 8(b) below.
8. Covenant Not To Compete
(a) Executive agrees that he will not without the prior written consent of
the Company at any time during the Severance Benefit Period become an
officer, director, or employee of or consultant to any bank, bank
holding company or other financial services institution.
(b) Executive may elect at any time to terminate the Severance Benefit
Period by delivering written notice to the Company in which event the
covenant not to compete set forth in Paragraph 8(a) above shall expire
and have no further force or effect.
(c) In the event of any breach by Executive of the covenant not to compete
set forth in Paragraph 8(a) above, the parties agree that the
exclusive remedy of the Company shall be to obtain an injunction,
order for specific performance, or other form of equitable relief from
a court of competent jurisdiction and that the Company shall not under
any
circumstances be entitled to recover monetary damages from Executive
by reason of any such breach.
9. Mitigation and Setoff
(a) Executive shall not be required to mitigate the amount of any payment
or benefit provided for in Paragraph 6 above by seeking employment or
otherwise and the Company shall not be entitled to setoff against the
amount of any payment or benefit provided for in Paragraph 6 above any
amounts earned by Executive in other employment during the Severance
Benefit Period.
(b) The Company hereby waives any and all rights to set off in respect to
any claim, debt, obligation or other liability of any kind whatsoever,
against any payment or benefit provided for in Paragraph 6 above.
10. Attorneys' Fees and Related Expenses
All attorneys' fees and related expenses incurred by Executive in
connection with or relating to enforcement by him of his rights under this
Agreement shall be paid for in full by the Company.
11. Successors and Parties in Interest
(a) This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns, including, without
limitation, any corporation which acquires, directly or indirectly, by
purchase, merger, consolidation or otherwise, all or substantially all
of the business or assets of the Company. Without limitation of the
foregoing, the Company shall require any such successor, by agreement
in form and substance satisfactory to Executive, expressly to assume
and agree to perform this Agreement in the same manner and to the same
extent that it is required to be performed by the Company.
(b) This Agreement is binding upon and shall inure to the benefit of
Executive, his heirs and personal representatives.
12. Rights under Other Plans
This Agreement is not intended to reduce, restrict or eliminate any
benefit to which Executive may otherwise be entitled at the time of his
discharge or resignation under any employee benefit plan of the Company then in
effect.
13. Termination
This Agreement may not be terminated except by mutual consent of the
parties, as evidenced by a written instrument duly executed by the Company and
by Executive.
14. Notices
All notices and other communications required to be given hereunder
shall be in writing and shall be deemed to have been given or made when hand
delivered or when mailed, certified mail, return receipt requested, to the
Company or to Executive, as the case may be, at their respective addresses set
forth above.
15. Severability
In the event that any provision of this Agreement shall be held to be
invalid or unenforceably by any court of competent jurisdiction, such provision
shall be deemed severable from the remainder of the Agreement and such holding
shall not invalidate or render unenforceable any other provision of this
Agreement. It is the intention of the parties hereto that Executive shall
receive the maximum severance benefits under this Severance Agreement which
Executive may receive without any payment of such benefits being classified as
an "excess parachute payment" (as defined in Section 280G of the Internal
Revenue Code) and to the extent that payment of such benefits hereunder would be
classified as an "excess parachute payment," such payment shall be automatically
reduced to the maximum amount which would not be classified as an "excess
parachute payment."
16. Governing Law, Jurisdiction and Venue
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania. In the event that either party
shall institute any suit or other legal proceeding, whether in law or in equity,
arising from or relating to this Agreement, the courts of the Commonwealth of
Pennsylvania shall have exclusive jurisdiction and venue shall lie exclusively
in the Court of Common Pleas of Lancaster County.
17. Entire Agreement
This Agreement constitutes the entire agreement between the Company
and Executive concerning the subject matter hereof and supersedes all prior
written or oral agreements or understandings between them. No term or provision
of this Agreement may be changed, waived, amended or terminated, except by
written instrument duly executed by the Company and by Executive.
IN WITNESS WHEREOF, this Agreement is executed the day and year first
above written.
ATTEST: FULTON FINANCIAL CORPORATION
By: /s/ Kenneth E. Shenenberger By: /s/ Robert D. Garner
------------------------------ --------------------------------
Title: Secretary Title: Chairman
(CORPORATE SEAL)
WITNESS:
/s/ Kathy L. Patterson /s/ Charles J. Nugent
- ---------------------------------- ------------------------------------
CHARLES J. NUGENT
SEVERANCE AGREEMENT
MADE as of this 17/th/ day of April, 1984, by and between Fulton Financial
Corporation, a Pennsylvania corporation with offices at One Penn Square, P.O.
4887, Lancaster, Pennsylvania 17604 (the Company) and Rufus A. Fulton, Jr., an
adult individual who resides at 700 Buttonwood Farm Road, Millersville,
Pennsylvania 17551 (Executive).
Background
Executive is Executive Vice President of the Company, a Pennsylvania bank
holding company, and an Executive Vice President of Fulton Bank, the principal
subsidiary and flagship bank of the Company. As one of the four members of
Senior Management of the Company, Executive is an integral part of its
management team.
As a result of changes in federal and state banking laws, there has been a
dramatic increase in the number of mergers and other acquisitions of
Pennsylvania bank and bank holding companies. While the Company remains firmly
committed to its policy of remaining a strong, independent regional bank holding
company, it recognizes that it might nevertheless be acquired as a result of an
unsolicited takeover attempt or in a negotiated transaction. Executive will
play a critical role in any such acquisition, as it falls principally upon him
and the other members of Senior Management vigorously and aggressively to
represent and to protect the interests of the shareholders of the Company.
The Company believes that Executive should not be forced to sacrifice his
future financial security in order to fulfill his responsibilities to the
shareholders. The Board of Directors of the Company has carefully considered
this problem and has determined that it should be addressed. Specifically, the
Board of Directors has concluded that basic financial protection should be
provided to Executive in the form of certain limited severance benefits payable
in the event that he is discharged or resigns following, and for reasons
relating to a change in control of the Company.
The purpose of this Agreement is to define these severance benefits and to
specify the conditions under which they are to be paid. This Agreement is not
intended to affect the terms of Executive's employment in the absence of a
change in control of the Company. Accordingly, although this Agreement will
take effect upon execution as a binding legal obligation of the Company, it will
become operative only upon a change in control of the Company as that concept is
defined below.
WITNESSETH:
NOW, THEREFORE, in consideration of Executive's continuing service to the
Company and of the mutual covenants and undertakings hereinafter set forth, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Undertaking of the Company
The Company shall provide to Executive the severance benefits specified
in Paragraph 6 below in the event that any time within 60 months following a
Change in Control of the Company:
(a) Executive is discharged by the Company, other than for Cause pursuant to
Paragraph 3 below or for Disability pursuant to Paragraph 4 below; or
(b) Executive resigns from the Company for Good Reason pursuant to Paragraph
5 below.
2. Change in Control
(a) For purposes of this Agreement, a Change in Control of the Company shall
mean a change in control of the kind that would be required to be
reported in response to Item 1 of Securities and Exchange Commission
Form 8-K promulgated under the Securities Exchange Act of 1934 and as in
effect on the date hereof.
(b) Without limitation of the foregoing, a Change in Control of the Company
shall be deemed to have occurred upon the occurrence of any of the
following events:
(1) Any person or group of persons acting in concert, shall have
acquired, directly or indirectly, beneficial ownership of 20
percent or more of the outstanding shares of the voting stock of
the Company;
(2) The composition of the Board of Directors of the Company shall
have changed such that during any period of two consecutive years
during the term of this Agreement, the persons who at the
beginning of such period were members of the Board of Directors,
unless the nomination or election of each director who was not a
director at the beginning of such period was approved in advance
by directors representing not less than two-thirds of the
directors then in office who were directors at the beginning of
the period; or
(3) The Company shall be merged or consolidated with or its assets
purchased by another corporation and as a result of such merger,
consolidation or sale of assets, less than a majority of the
outstanding voting stock of the surviving, resulting or
purchasing corporation is owned, immediately after the
transaction, by the holders of the voting stock of the Company
outstanding immediately before the transaction.
(c) For purposes of Paragraph 2(b)(1) above, a person shall be deemed to be the
beneficial owner of any shares which he or any of his affiliates or
associates (i) owns, directly or indirectly, (ii) has the right to acquire,
or (iii) has the right to vote or direct the voting thereof pursuant to any
agreement, arrangement or understanding.
3. Discharge for Cause
(a) The Company may at any time following a Change in Control discharge
Executive for Cause, in which event Executive shall not be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company shall have Cause to
discharge Executive only under the following circumstances:
(i) Executive shall have committed an act of dishonesty constituting
a felony and resulting or intending to result directly or
indirectly in gain or personal enrichment at the expense of the
Company; or
(ii) Executive shall have deliberately and intentionally refused (for
reasons other than incapacity due to accident or physical or
mental illness) to perform his duties to the Company for a
period of 30 consecutive days following the receipt by him of
written notice from the Company setting forth in detail the
facts upon which the Company relies in concluding that Executive
has deliberately and intentionally refused to perform such
duties.
4. Discharge for Disability
(a) The Company may at any time following a Change in Control discharge
Executive for Disability as provided in this Paragraph 4, in which
event Executive shall not be entitled to receive the severance benefits
specified in Paragraph 6 below.
(b) For purposes of this Agreement, the Company may discharge Executive for
Disability only under the following circumstances:
(i) Executive shall have been unable, for reasons of incapacity due
to accident or physical or mental illness, for a period of six
consecutive months to perform his duties to the Company.
(ii) The Company, following the expiration of such period of six
consecutive months, shall have to give Executive 30 days written
notice of its intention to discharge him for disability and he
shall not within that 30 day period have returned to the
performance of his duties to the Company on a full-time basis;
and
(iii) The Company shall provide or cause to be provided to Executive
short-term and long-term disability benefits and fringe benefits
not less generous than the following: (A) Executive shall
receive each month for six months following the date of his
discharge for Disability his full month salary (as in effect
immediately before his discharge for Disability); (B) Executive
shall receive each month thereafter 60 percent of his monthly
salary (as in effect immediately before his discharge for
Disability) until his death or until December 31 of the calendar
year in which he attains age 65, whichever
shall first occur; and (c) Executive shall receive those fringe
benefits customarily provided by the Company to disabled former
employees, which benefits shall include, but shall not be
limited to, life, medical, health, accident and disability
insurance and a survivor's income benefit.
(c) In the event that Executive shall at any time cease to be disabled
following his discharge for Disability, the Company shall do one of the
following:
(i) Reappoint Executive to his position with the Company, with full salary
and benefits, as they existed immediately before his discharge for
Disability, in which case this Agreement shall remain in full force
and effect as though Executive had never been so discharged; or
(ii) Treat Executive as though he has been discharged for reasons other
than Cause or Disability, in which case Executive shall be entitled to
receive the severance benefits specified in Paragraph 6 below.
(d) In the event that Executive shall disagree with a determination on the part
of the Company that he is disabled or in the event that the Company shall
disagree with a determination on the part of Executive that he is no longer
disabled, the matter shall be submitted to an impartial and reputable
medical doctor to be selected by mutual agreement of the parties. In the
event that Executive and the Company are unable to agree, the matter shall
be submitted to an impartial and reputable medical doctor to be selected,
upon petition by either party, by the Lancaster County Court of Common
Pleas.
5. Resignation for Good Reasons
(a) Executive may at any time following a Change in Control resign from the
Company for Good Reason, in which event Executive shall be entitled to
receive the severance benefits specified in Paragraph 6 below.
(b) For purposes of this Agreement, Executive shall have Good Reason to
resign under the following circumstances:
(i) The Company, without Executive's prior written consent, shall
have changed or attempted to change in any significant respect
the authority, duties, compensation, benefits or other terms or
conditions of Executive's employment; or
(ii) Executive shall have determined in good faith and in his sole and
absolute discretion that he is unable to work harmoniously and
effectively with the new management of the Company or that he is
otherwise unable effectively to carry out his duties and
discharge his responsibilities to the Company.
6. Severance Benefits
The severance benefits to be provided to Executive by the Company under
this Agreement are as follows:
(a) Salary Continuation: The Company shall pay to Executive each month during
-------------------
the Severance Benefit Period an amount equal to one-twelfth of his base
annual salary as in effect immediately before the Change in Control or
immediately before the commencement of the Severance Benefit Period, which
ever is greater. The payment to be made in respect of each month shall be
made on or before the 15th day of the next following month. In the event
that the Severance Benefit Period begins or ends on other than,
respectively, the first or last day of a calendar month, the payment to be
made in respect of that month shall be prorated accordingly. It is
understood that the Company shall withhold from each monthly payment such
amounts as may be required under any applicable federal, state or local
income tax law.
(b) Fringe Benefits: The Company shall at its expense provide to Executive
---------------
throughout Severance Benefit Period life, medical, health, accident and
disability insurance and a survivor's income benefit in form, substance and
amount which is in each case substantially equivalent to that provided to
him immediately before the Change in Control or immediately before the
commencement of the Severance Benefit Period, whichever Executive shall in
each case select.
(c) Supplemental Retirement Benefit: The Company shall pay to Executive (or to
-------------------------------
his estate in the event of his death) in cash on or before the 30th day
following termination of the Severance Benefit Period, an amount equal to
15 percent of the salary continuation payments (before any applicable
withholding) made to Executive pursuant to Paragraph 6(a) above, plus
interest on such amounts compounded annually and credited from the date of
each monthly payment at a rate which is equal to the average discount rate
on 90 day Treasury Bills issued during the immediately preceding calendar
quarter, which rate shall be adjusted quarterly on the first day of each
calendar quarter.
7. Severance Benefit Period
The Severance Benefit Period shall commence upon the effective date of
Executive's discharge (for reasons other than Cause or Disability) or
resignation (for Good Reason) and shall terminate upon the first to occur of the
following events:
(a) The expiration of 60 months following the effective date of Executive's
discharge or resignation;
(b) The expiration of the calendar year in which Executive attains age 65;
(c) Executive's death; or
(d) The election of Executive to terminate the Severance Benefit period
pursuant to Paragraph 8(b) below.
8. Covenant Not To Compete
(a) Executive agrees that he will not without the prior written consent of
the Company at any time during the Severance Benefit Period become an
officer, director, or employee of or consultant to any bank, bank
holding company or other financial services institution.
(b) Executive may elect at any time to terminate the Severance Benefit
Period by delivering written notice to the Company in which event the
covenant not to compete set forth in Paragraph 8(a) above shall expire
and have no further force or effect.
(c) In the event of any breach by Executive of the covenant not to compete
set forth in Paragraph 8(a) above, the parties agree that the exclusive
remedy of the Company shall be to obtain an injunction, order for
specific performance, or other form of equitable relief from a court of
competent jurisdiction and that the Company shall not under any
circumstances be entitled to recover monetary damages from Executive by
reason of any such breach.
9. Mitigation and Setoff
(a) Executive shall not be required to mitigate the amount of any payment
or benefit provided for in Paragraph 6 above by seeking employment or
otherwise and the Company shall not be entitled to setoff against the
amount of any payment or benefit provided for in Paragraph 6 above any
amounts earned by Executive in other employment during the Severance
Benefit Period.
(b) The Company hereby waives any and all rights to set off in respect to
any claim, debt, obligation or other liability of any kind whatsoever,
against any payment or benefit provided for in Paragraph 6 above.
10. Attorneys' Fees and Related Expenses
All attorneys' fees and related expenses incurred by Executive in
connection with or relating to enforcement by him of his rights under this
Agreement shall be paid for in full by the Company.
11. Successors and Parties in Interest
(a) This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns, including, without
limitation, any corporation which acquires, directly or indirectly, by
purchase, merger, consolidation or otherwise, all or substantially all
of the business or assets of the Company. Without limitation of the
foregoing, the Company shall require any such successor, by agreement
in form and substance satisfactory to Executive, expressly to assume
and agree to perform this Agreement in the same manner and to the same
extent that it is required to be performed by the Company.
(b) This Agreement is binding upon and shall inure to the benefit of
Executive, his heirs and personal representatives.
12. Rights under Other Plans
This Agreement is not intended to reduce, restrict or eliminate any benefit
to which Executive may otherwise be entitled at the time of his discharge or
resignation under any employee benefit plan of the Company then in effect.
13. Termination
This Agreement may not be terminated except by mutual consent of the
parties, as evidenced by a written instrument duly executed by the Company and
by Executive.
14. Notices
All notices and other communications required to be given hereunder shall
be in writing and shall be deemed to have been given or made when hand delivered
or when mailed, certified mail, return receipt requested, to the Company or to
Executive, as the case may be, at their respective addresses set forth above.
15. Severability
In the event that any provision of this Agreement shall be held to be
invalid or unenforceably by any court of competent jurisdiction, such provision
shall be deemed severable from the remainder of the Agreement and such holding
shall not invalidate or render unenforceable any other provision of this
Agreement.
16. Governing Law, Jurisdiction and Venue
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania. In the event that either party shall
institute any suit or other legal proceeding, whether in law or in equity,
arising from or relating to this Agreement, the courts of the Commonwealth of
Pennsylvania shall have exclusive jurisdiction and venue shall lie exclusively
in the Court of Common Pleas of Lancaster County.
17. Entire Agreement
This Agreement constitutes the entire agreement between the Company and
Executive concerning the subject matter hereof and supersedes all prior written
or oral agreements or understandings between them. No term or provision of this
Agreement may be changed, waived, amended or terminated, except by written
instrument duly executed by the Company and by Executive.
IN WITNESS WHEREOF, this Agreement is executed the day and year first above
written.
ATTEST: FULTON FINANCIAL CORPORATION
By: /s/ Kenneth E. Shenenberger By: /s/ Robert D. Garner
_____________________________ _________________________
Title: Secretary Title: Chairman
(CORPORATE SEAL)
WITNESS:
/s/ Kenneth E. Shenenberger /s/ Rufus A. Fulton, Jr.
_________________________________ _____________________________
RUFUS A. FULTON, JR.