Exhibit 10.2

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS AMENDMENT TO EMPLOYMENT AGREEMENT, made as of the 23rd day of December
2005, by and among LEESPORT FINANCIAL CORP. (“Leesport”), a Pennsylvania
business corporation having a place of business at 1240 Broadcasting Road,
Wyomissing, Pennsylvania, LEESPORT BANK (“Leesport Bank”), a Pennsylvania
banking institution having a place of business at 1240 Broadcasting Road,
Wyomissing, Pennsylvania, and VITO A. DELISI (“Employee”), an adult individual.

 

BACKGROUND

 

1.                                       LEESPORT, LEESPORT BANK AND EMPLOYEE
ARE PRESENTLY PARTIES TO AN EMPLOYMENT AGREEMENT, MADE AS OF APRIL 16, 2004,
(THE “EMPLOYMENT AGREEMENT”), A COPY OF WHICH IS ATTACHED AS EXHIBIT “A.”

 

2.                                       LEESPORT, LEESPORT BANK AND EMPLOYEE
HAVE AGREED TO CERTAIN MODIFICATIONS TO THE EMPLOYMENT AGREEMENT IN CONNECTION
WITH A REORGANIZATION AND REALIGNMENT OF CERTAIN BUSINESS AND REPORTING
FUNCTIONS ON A COMPANY-WIDE BASIS.  IN CONNECTION WITH SUCH REORGANIZATION AND
REALIGNMENT, LEESPORT, LEESPORT BANK AND EMPLOYEE HAVE AGREED THAT EMPLOYEE WILL
RETAIN THE TITLES OF EXECUTIVE VICE PRESIDENT OF LEESPORT BANK AND PRESIDENT OF
THE MADISON BANK DIVISION OF LEESPORT BANK, AND THAT EMPLOYEE WILL CONTINUE TO
REPORT DIRECTLY TO THE CHIEF EXECUTIVE OFFICER OF LEESPORT BANK.  LEESPORT,
LEESPORT BANK AND EMPLOYEE HAVE AGREED, HOWEVER, THAT LEESPORT OR LEESPORT BANK
CAN MODIFY EMPLOYEE’S DUTIES AND RESPONSIBILITIES, AND THAT SUCH MODIFICATIONS
WILL NOT CONSTITUTE A BREACH OF THE EMPLOYMENT AGREEMENT BY LEESPORT OR LEESPORT
BANK OR AN EVENT OF GOOD REASON WITHIN THE MEANING OF SECTION 8(D) OF THE
EMPLOYMENT AGREEMENT.

 

3.                                       IN CONSIDERATION OF EMPLOYEE’S
AGREEMENT TO AMEND THE EMPLOYMENT AGREEMENT AS SET FORTH HEREIN, LEESPORT AND
LEESPORT BANK HAVE AGREED TO AMEND THE COVENANT NOT TO COMPETE OR SOLICIT SET
FORTH IN SECTION 9 OF THE EMPLOYMENT AGREEMENT SO THAT THE PROVISIONS OF SECTION
SHALL NOT APPLY IN THE EVENT THAT EMPLOYEE’S EMPLOYMENT TERMINATES AT THE END OF
THE EMPLOYMENT PERIOD (AS DEFINED IN SECTION 4(A) OF THE EMPLOYMENT AGREEMENT)
AS A RESULT OF DELIVERY TO EMPLOYEE BY LEESPORT OR LEESPORT BANK OF A NOTICE OF
NONRENEWAL OF THE EMPLOYMENT AGREEMENT IN ACCORDANCE WITH SECTION 4(A) OF THE
EMPLOYMENT AGREEMENT.

 

AGREEMENT:

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:

 

1.                                       AMENDMENT OF SECTION 3 OF THE
EMPLOYMENT AGREEMENT (DUTIES OF EMPLOYEE).  SECTION 3 OF THE EMPLOYMENT
AGREEMENT IS HEREBY AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS FOLLOWS:

 

“ Duties of Employee.  Employee shall perform such duties as an officer of
Leesport Bank as may be assigned to Employee from time to time by the Board of
Directors or the Chief Executive Officer of Leesport Bank.  Employee shall hold
the titles of Executive Vice President of Leesport Bank and President of the

 

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Madison Bank Division of Leesport Bank, and shall hold such other titles as may
be given to him from time to time by the Board of Directors of Leesport Bank. 
Employee shall report directly to the Chief Executive Officer of Leesport Bank. 
Employee shall devote his full business time, attention and energies to the
business of Leesport Bank during the Employment Period (as defined in Section 4
hereof); provided, however, that this Section 3 shall not be construed as
preventing Employee from engaging in any of the following activities provided
that they do not unreasonably interfere with the performance of Employee’s
duties under this Agreement: (a) investing Employee’s personal assets;
(b) performing volunteer work for civic and charitable institutions; (c) serving
on the boards of directors of non-profit organizations or, with the prior
consent of the Chief Executive Officer of Leesport Bank, serving on the boards
of directors of for-profit organizations that do not compete with Leesport,
Leesport Bank or any of their affiliates; or (d) being involved in any other
activity with the prior approval of the Chief Executive Officer of Leesport
Bank, which approval shall not be unreasonably withheld. “

 

2.                                       AMENDMENT OF SECTION 8(D) OF EMPLOYMENT
AGREEMENT (GOOD REASON).  SECTION 8(D) OF THE EMPLOYMENT AGREEMENT IS HEREBY
AMENDED AND RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:

 

“As used in this Agreement, “Good Reason” shall mean:  (i) a change in titles
(except that a change in title relating to Employee’s status as President of The
Madison Bank Division of Leesport Bank at any time that such Division is no
longer maintained by Leesport as permitted by the terms of the Merger Agreement
shall not constitute an event of Good Reason hereunder); (ii) a reduction by
Leesport Bank or Leesport in Employee’s Annual Base Salary or in other benefits,
in the aggregate, payable to the Employee hereunder (except that a reduction in
benefits permitted by Section 5(d) of this Agreement shall not be considered of
purposes of determining whether an event of Good Reason has occurred hereunder);
(iii) Leesport Bank or Leesport’s failure to pay the Employee any amounts
otherwise vested and due hereunder or under any plan or policy of the Leesport
Bank or Leesport; or (iv) a relocation of the Employee’s primary place of
employment, without the Employee’s expressed written approval, to a location
more than twenty (20) miles from the location at which the Employee performed
his duties as of the date of this Agreement (except that a relocation of the
Employee’s primary place of employment to Leesport’s corporate headquarters at
such time in order for the Employee to accept a position of increased
responsibilities, provided that such location is not more than seventy (70)
miles from the location at which the Employee

 

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performed his duties as of the date of this Agreement, shall not constitute an
event of Good Reason hereunder).”

 

3.                                       AMENDMENT OF SECTION 9(A) OF EMPLOYMENT
AGREEMENT (COVENANT NOT TO COMPETE OR SOLICIT).  SECTION 9(A) OF THE EMPLOYMENT
AGREEMENT IS HEREBY AMENDED AND RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:

 

“(a)                           Employee hereby acknowledges and recognizes the
highly competitive nature of the business of Leesport, Leesport Bank and their
subsidiaries and affiliates and accordingly agrees that, during the Employment
Period and for a period of one (1) calendar year following termination of
Employee’s employment (except that this Section 9 shall not apply if Leesport or
Leesport Bank terminates the Employee’s employment without Cause or the Employee
terminates his employment for Good Reason or if the Employment Period terminates
as a result of delivery by Leesport or Leesport Bank of a notice of nonrenewal),
Employee shall not:

 

(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 five
percent (5%) of the stock of a publicly owned company) or otherwise of any
person, firm, corporation or enterprise engaged in (1) the banking (including
bank holding company) industry or (2) any other activity in which Leesport,
Leesport Bank or any of their subsidiaries or affiliates is engaged (and in
which Employee is also engaged) during the Employment Period, with a 25-mile
radius of any branch office of Leesport Bank (the “Non-Competition Area”); or

 

(ii)                                  provide financial or other significant
assistance to any person, firm, corporation, or enterprise engaged in (1) the
banking (including bank holding company) industry or (2) any other activity in
which Leesport, Leesport Bank or any of their subsidiaries or affiliates is
engaged (and in which Employee is also engaged) during the Employment Period, in
the Non-Competition Area; or

 

(iii)                             solicit any person, firm, corporation, or
enterprise who or which at any time during the Employment Period was a customer
of Leesport, Leesport Bank or any of their subsidiaries or affiliates for the
purpose of providing them with products or services competitive with those
provided by any of such entities; or

 

(iv)  solicit or hire any employees of Leesport, Leesport Bank or any of their
subsidiaries or affiliates or induce any of such

 

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employees to terminate their employment relationship with Leesport, Leesport
Bank or any of such subsidiaries or affiliates.”

 

4.                                       RATIFICATION OF AGREEMENT.  EXCEPT AS
OTHERWISE PROVIDED IN THIS AMENDMENT TO EMPLOYMENT AGREEMENT, ALL TERMS AND
CONDITIONS OF THE EMPLOYMENT AGREEMENT REMAIN IN FULL FORCE AND EFFECT, AND
NOTHING CONTAINED IN THIS AMENDMENT TO EMPLOYMENT AGREEMENT SHALL BE DEEMED TO
ALTER OR AMEND ANY PROVISION OF THE EMPLOYMENT AGREEMENT EXCEPT AS SPECIFICALLY
PROVIDED HEREIN.  REFERENCES IN THE EMPLOYMENT AGREEMENT TO THE “AGREEMENT”
SHALL BE DEEMED TO BE REFERENCES TO THE AGREEMENT AS AMENDED HEREBY.

 

5.                                       WAIVER. NO PROVISION OF THIS AMENDMENT
TO EMPLOYMENT AGREEMENT MAY BE MODIFIED, WAIVED, OR DISCHARGED UNLESS SUCH
WAIVER, MODIFICATION, OR DISCHARGE IS AGREED TO IN WRITING AND SIGNED BY
EMPLOYEE AND AN EXECUTIVE OFFICER SPECIFICALLY DESIGNATED BY THE BOARDS OF
DIRECTORS OF LEESPORT AND LEESPORT BANK.  NO WAIVER BY ANY PARTY HERETO AT ANY
TIME OF ANY BREACH BY THE OTHER PARTY HERETO OF, OR COMPLIANCE WITH, ANY
CONDITION OR PROVISION OF THIS AMENDMENT TO EMPLOYMENT 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.

 

6.                                       ASSIGNMENT.  THIS AMENDMENT TO
EMPLOYMENT AGREEMENT SHALL NOT BE ASSIGNABLE BY ANY PARTY, EXCEPT BY LEESPORT OR
LEESPORT BANK BANCORP TO AN AFFILIATE OF LEESPORT OR LEESPORT BANK OR TO ANY
SUCCESSOR IN INTEREST TO THEIR RESPECTIVE BUSINESSES.

 

7.                                       ENTIRE AGREEMENT.  THIS AMENDMENT TO
EMPLOYMENT AGREEMENT CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES RELATING TO
THE SUBJECT MATTER HEREOF.

 

8.                                       SUCCESSORS; BINDING AGREEMENT.

 

(A)                                  THIS AMENDMENT TO EMPLOYMENT AGREEMENT
SHALL INURE TO THE BENEFIT OF AND BE BINDING ON LEESPORT AND LEESPORT BANK AND
ANY OF THEIR SUCCESSORS OR PERMITTED ASSIGNS.

 

(B)                                 THIS AMENDMENT TO EMPLOYMENT AGREEMENT SHALL
INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY EMPLOYEE’S PERSONAL OR LEGAL
REPRESENTATIVES, EXECUTORS, ADMINISTRATORS, HEIRS, DISTRIBUTEES, DEVISEES, AND
LEGATEES.

 

9.                                       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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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

LEESPORT FINANCIAL CORP.

 

 

 

By

/s/ Robert D. Davis

 

 

Robert D. Davis

 

 

President and Chief Executive Officer

 

 

 

Attest:

/s/ Jenette L. Eck

 

 

 

 

 

 

(“Leesport”)

 

 

 

 

LEESPORT BANK

 

 

 

 

 

By

/s/ Robert D. Davis

 

 

Robert D. Davis

 

 

President and Chief Executive Officer

 

 

 

Attest:

/s/ Jenette L. Eck

 

 

 

 

 

 

(“Leesport Bank”)

 

 

 

/s/ Vito A. DeLisi

 

 

Vito A. DeLisi

 

 

(“Employee”)

 

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Exhibit A

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 16th day of
April 2004, by and among LEESPORT FINANCIAL CORP., a Pennsylvania business
corporation having a place of business at 1240 Broadcasting Road, Wyomissing,
Pennsylvania 19610 (“Leesport”), LEESPORT BANK, a Pennsylvania banking
institution having a place of business at 1240 Broadcasting Road, Wyomissing,
Pennsylvania 19610 (“Leesport Bank”), and VITO A. DELISI, an adult individual
(“Employee”).

 

Background

 

1.     Employee is serving as President and Chief Executive Officer of The
Madison Bank (“Madison Bank”), a Pennsylvania banking institution and a wholly
owned subsidiary of Madison Bancshares Group, Ltd. (“Madison”), pursuant to an
employment agreement, dated January 1, 2004 (the “Madison Employment
Agreement”).

 

2.     Madison has entered into an agreement and plan of merger (the “Merger
Agreement”) with Leesport, dated the date hereof (the “Merger Agreement”),
providing, among other things for the merger of Madison with and into Leesport,
with Leesport as the surviving entity, and the subsequent merger of Madison Bank
with and into Leesport Bank, with Leesport Bank as the surviving entity. Defined
terms used herein but otherwise not defined herein shall have the meanings
ascribed to such terms in the Merger Agreement.

 

3.     Leesport and Employee desire that Employee continue his employment with
Leesport Bank after the Merger as President of the Madison Bank Division of
Leesport Bank. In connection therewith, Leesport and Employee have agreed that
(i) Employee shall receive the payment provided in Section 20 of this Agreement
in complete satisfaction of any amounts due and owing to Employee under the
Madison Employment Agreement as a result of the Merger, (ii) the Madison
Employment Agreement shall be terminated on the Effective Date without further
obligations thereunder by any of the parties to the Madison Employment Agreement
and (iii) Employee shall continue his employment with Leesport Bank on and after
the Effective Date on the terms and conditions set forth herein.

 

4.     Employee agrees to accept employment with Leesport Bank on the terms and
conditions set forth herein.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:

 

1.    Incorporation of Background.    The Background provisions set forth above
are hereby incorporated by reference into this Agreement and made a part hereof
as if set forth in their entirety in this Section 1.

 

2.    Employment.    Leesport Bank hereby employs Employee, and Employee hereby
accepts employment with Leesport Bank, as of the Effective Time of the Merger on
the terms and conditions set forth in this Agreement.

 

3.    Duties of Employee.    Employee shall perform such duties as an officer of
Leesport Bank as may be assigned to Employee from time to time by the Board of
Directors or the Chief Executive Officer of Leesport Bank, commensurate with his
position as head of a major division of Leesport Bank. Employee shall be
employed as an Executive Vice President of Leesport Bank and President of the
Madison Bank Division of Leesport Bank to be established in accordance with the
provisions of the Merger Agreement, and shall hold such other titles as may be
given to him from time to time by the Board of Directors of Leesport Bank.
Employee shall report directly to the Chief Executive Officer of Leesport Bank.
Employee shall devote his full business time, attention and energies to the
business of

 

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Leesport Bank during the Employment Period (as defined in Section 4 hereof);
provided, however, that this Section 3 shall not be construed as preventing
Employee from engaging in any of the following activities provided that they do
not unreasonably interfere with the performance of Employee’s duties under this
Agreement: (a) investing Employee’s personal assets; (b) performing volunteer
work for civic and charitable institutions; (c) serving on the boards of
directors of non-profit organizations or, with the prior consent of the Chief
Executive Officer of Leesport Bank, serving on the boards of directors of
for-profit organizations that do not compete with Leesport, Leesport Bank or any
of their affiliates; or (d) being involved in any other activity with the prior
approval of the Chief Executive Officer of Leesport Bank, which approval shall
not be unreasonably withheld.

 

4.    Term of Agreement.

 

(a)   This Agreement shall be for a period (the “Employment Period”) commencing
on the Effective Date and ending on December 31, 2007; provided, however, that
the Employment Period shall be automatically extended on January 1, 2008 and on
the same date of each subsequent year thereafter (the “Annual Renewal Date”) for
a period ending one (1) year from each Annual Renewal Date unless Leesport Bank
or Employee provides written notice of nonrenewal to the other party at least
sixty (60) days prior to an Annual Renewal Date, in which event this Agreement
shall terminate at the end of the then existing Employment Period. The term
Employment Period shall include any renewals or extensions of the Employment
Period.

 

(b)   Notwithstanding the provisions of Section 4(a) hereof, this Agreement
shall terminate automatically for Cause (as hereinafter defined) upon written
notice from the Chief Executive Officer of Leesport Bank to Employee. As used in
this Agreement, “Cause” shall mean any of the following:

 

(i)    Employee’s conviction of or plea of guilty or nolo contendere to a felony
or a crime of falsehood involving Leesport or Leesport Bank, or the actual
incarceration of Employee for a period of at least thirty (30) days relating to
such matters;

 

(ii)   Employee’s willful failure to perform his material duties hereunder
(other than a failure resulting from Employee’s incapacity because of physical
or mental illness) after receipt of written notice, setting forth with
particularity the allegations of such failure, from Leesport Bank and a failure
to cure such violation within thirty (30) days of such notice, unless it is
apparent under the circumstances that Employee is unable to cure such violation,
which failure results in material injury to Leesport, Leesport Bank or any of
their subsidiaries or affiliates, monetarily or otherwise;

 

(iii)  fraud or gross negligence on the part of Employee in the performance of
his duties which results in material injury to Leesport, Leesport Bank or any of
their subsidiaries or affiliates, monetarily or otherwise;

 

(iv)  disparaging material public statements by Employee relating to Leesport,
Leesport Bank or any of their subsidiaries or affiliates;

 

(v)   Employee’s breach of fiduciary duty involving personal profit; or

 

(vi)  Employee’s removal or prohibition from being an institution-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 Pennsylvania
Department of Banking pursuant to state law.

 

If this Agreement is terminated for Cause, Employee’s rights under this
Agreement shall cease as of the effective date of such termination, except that
Employee shall be entitled to all accrued compensation and benefits as of the
effective date of termination (including, without limitation, Annual Base
Salary, vacation and expense reimbursement but excluding any pro-rated bonus) as
of the effective date of termination.

 

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(c)   Notwithstanding the provisions of Section 4(a) hereof, this Agreement
shall terminate automatically upon Employee’s voluntary termination of
employment (other than in accordance with Section 6 hereof), retirement at
Employee’s election, or Employee’s death, and Employee’s rights under this
Agreement shall cease as of the date of such voluntary termination, retirement
at Employee’s election, or death; provided, however, that, if Employee dies
after Employee delivers a Notice of Termination (as defined in Section 6(a)
hereof), the amounts provided for in Section 7 shall remain payable and the
provisions of Section 15(b) hereof shall apply.

 

(d)   Notwithstanding the provisions of Section 4(a) hereof, this Agreement
shall terminate automatically upon Employee’s disability and Employee’s rights
under this Agreement shall cease as of the date of such termination; provided,
however, that, if Employee becomes disabled after Employee delivers a Notice of
Termination, Employee shall nevertheless be absolutely entitled to receive all
of the compensation and benefits provided for in, and for the term set forth in,
Section 7 hereof. For purposes of this Agreement, “disability” shall mean
Employee’s incapacitation by accident, sickness or otherwise which renders
Employee mentally or physically incapable of performing the services required of
Employee for the entire period of six (6) consecutive months as determined by a
physician selected by Leesport and reasonably satisfactory to Employee. During
the six-month period referred to in the preceding sentence in which Employee
shall be mentally or physically incapable of performing the services required of
Employee prior to a termination for disability, Employee shall be entitled to
continue to receive the salary, benefits and other compensation provided in
Section 5 hereof.

 

(e)   Employee agrees that, in the event his employment under this Agreement
terminates for any reason, Employee shall concurrently resign as a director of
Leesport, Leesport Bank or any of their subsidiaries or affiliates, if he is
then serving as a director of any such entities.

 

5.    Employment Period Compensation and Benefits.

 

(a)    Salary.    For services performed by Employee under this Agreement,
Leesport Bank shall pay Employee an annualized base salary in the aggregate
amount of Two Hundred Thirty-Five Thousand Dollars ($235,000.00) per year during
the Employment Period (“Annual Base Salary”), payable at the same times as
salaries are payable to other Employee employees of Leesport Bank. Leesport Bank
may, from time to time, increase (but may not decrease) Employee’s Annual Base
Salary, and any and all such increases shall be deemed to constitute amendments
to this Section 5(a) to reflect the increased amounts, effective as of the date
established for such increases by the Board of Directors or any committee of the
Board of Directors of Leesport Bank in the resolutions authorizing such
increase.

 

(b)    Bonus.    For services performed by Employee under this Agreement,
Employee shall be entitled to participate in the incentive bonus program in
effect from time to time for officers and employees of Leesport on the same
basis as similarly situated officers of Leesport Bank. The payment of any such
bonus in any year shall not reduce or otherwise affect any other obligation to
Employee provided for under this Agreement.

 

(c)    Vacation.    During the term of this Agreement, Employee shall be
entitled to paid annual vacation in accordance with the policies established for
senior Employees of Leesport Bank, which currently is four (4) weeks paid
vacation per year. Employee shall not be entitled to receive any additional
compensation from Leesport Bank for failure to take a vacation, nor shall
Employee be able to accumulate unused vacation time from one year to the next,
except to the extent specifically authorized by the Board of Directors of
Leesport Bank.

 

(d)    Employee Benefit Plans.    During the term of this Agreement, Employee
shall be entitled to participate in and receive the benefits of any employee
benefit plan available from time to time to employees who are officers of
Leesport Bank; provided, however, that nothing contained herein

 

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shall be construed as prohibiting Leesport, Leesport Bank or any other
subsidiary of Leesport from eliminating or limiting a plan or benefit provided
that such elimination or limitation is applicable to all officer employees
generally. Employee shall receive past service credit for service under the
employee benefit plans of Madison for purposes of determining Employee’s
eligibility and any vesting requirements under any plans of Leesport. Employee
shall also receive a waiver of all waiting periods and pre-existing condition
exclusions under any Leesport plan to the extent permitted under the terms of
the applicable plan. Nothing paid to Employee 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 Employee pursuant to Section 5(a) hereof.

 

(e)    Stock Options.    On the Effective Date of the Merger, the Employee shall
be granted five thousand (5,000) incentive stock options under Leesport’s 1998
Employee Stock Incentive Plan, as amended (the “Stock Option Plan”). Such
options shall be granted with an exercise price equal to fair market value of a
share of Leesport common stock on the Effective Date of the Merger, shall vest
ratably over a period of three (3) years from the date of grant and shall
otherwise be subject to the terms and conditions of the Plan. Employee shall be
eligible to participate in Leesport’s stock option plans and programs in effect
from time to time and will be eligible for consideration for grants under such
plans for calendar years commencing January 1, 2005, and thereafter, on the same
basis as other officers of Leesport Bank.

 

(f)    Automobile Allowance.    During the Employment Period, Employee shall be
entitled to receive a monthly automobile allowance of One Thousand Dollars
($1,000.00) to cover all expenses, including lease payments, fuel, maintenance
and other operating expenses, of an automobile for use in connection with
Employee’s duties hereunder.

 

(g)    Split-Dollar Life Insurance Program.    After the Effective Date,
Leesport shall continue to maintain the split-dollar life insurance plan
arrangement referenced in Section 2.4 of the Madison Employment Agreement on the
same terms and conditions.

 

(h)    Country Club.    During the Employment Period, Leesport Bank shall
reimburse the Employee or otherwise pay for membership dues and all reimbursable
business-related expenses associated with the Employee’s membership in the
Plymouth Country Club in accordance with Leesport’s expense reimbursement
policies in effect from time.

 

(i)    Business Expenses.    Leesport Bank shall reimburse the Employee or
otherwise pay for all reasonable expenses incurred by the Employee in
furtherance of or in connection with the business of Leesport Bank or Leesport
in accordance with Leesport’s expense reimbursement policies in effect from time
to time.

 

6.    Termination of Employment Following Change in Control.

 

(a)   If a Change in Control (as defined in Section 6(b) hereof) shall occur and
if thereafter at any time during the term of this Agreement there shall be:

 

(i)    an involuntary termination of the Employee’s employment, other than an
involuntary termination permitted in Sections 4(b) and 4(d);

 

(ii)   a material reduction in the Employee’s duties or responsibilities as the
same existed immediately prior to public announcement of a transaction involving
an actual or potential Change in Control, or as the same may be increased
thereafter;

 

(iii)  a reduction in the Employee’s base compensation below a level that was in
effect immediately prior to the public announcement of an actual or potential
Change in Control, or as may be increased thereafter;

 

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(iv)  the failure to provide the Employee with a total compensation package
(salary, welfare and pension benefits, stock options and a bonus plan evaluated
on the basis of bonus potential) reasonably comparable to the compensation
package provided to the Employee immediately prior to the public announcement of
an actual or potential Change in Control, or as may be increased thereafter;

 

(v)   the reassignment of the Employee to a principal office which is more than
thirty-five (35) miles from the Employee’s primary residence as of the date of
the public announcement of an actual or potential Change in Control; or

 

(vi)  any material breach of this Agreement by Leesport or Leesport Bank,
coupled with the failure to cure the same within thirty (30) days after receipt
of written notice of such breach from the Employee.

 

then, at the option of Employee, exercisable by Employee within one hundred
twenty (120) days of the occurrence of any of the foregoing events, Employee may
resign from employment with Leesport 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 Leesport and Leesport Bank
and the provisions of Section 7 of this Agreement shall apply.

 

(b)   As used in this Agreement, “Change in Control” shall mean the occurrence
of any of the following:

 

(i)    any “person” (as such term is used for purposes of Section 13(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) as in effect on the date
hereof), other than Leesport, a subsidiary of Leesport, or an employee benefit
plan of Leesport or a subsidiary of Leesport (including a related trust),
becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the
Exchange Act), directly or indirectly of securities of Leesport representing
more than 24.9% of (A) the combined voting power of Leesport’s then outstanding
stock and securities or (B) the aggregate number of shares of Leesport’s then
outstanding common stock;

 

(ii)   the occurrence of a sale of all or substantially all of the assets of
Leesport or Leesport Bank to an entity which is not a direct or indirect
subsidiary of Leesport;

 

(iii)  the occurrence of a reorganization, merger, consolidation or similar
transaction involving Leesport, unless (A) the shareholders of Leesport
immediately prior to the consummation of any such transaction initially
thereafter own securities representing at least a majority of the voting power
of the surviving or resulting corporation and (B) the directors of Leesport
immediately prior to the consummation of such transaction initially thereafter
represent at least a majority of the directors of the surviving or resulting
corporation;

 

(iv)  a plan of liquidation or dissolution, other than pursuant to bankruptcy or
insolvency, is adopted for Leesport or Leesport Bank;

 

(v)   during any period of two consecutive years, individuals who, at the
beginning of such period, constituted the Board of Directors of Leesport cease
to constitute the majority of such Board (unless the election of each new
director was expressly or by implication approved by a majority of the Board
members who were still in office and who were directors at the beginning of such
period); and

 

(vi)  the occurrence of any other event which is irrevocably designated as a
“change in control” for purposes of this Agreement by resolution adopted by a
majority of the then non-employee directors of Leesport.

 

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7.    Rights in Event of Termination of Employment Following Change in Control.

 

(a)   In the event that Employee delivers a Notice of Termination to Leesport
and Leesport Bank, Employee shall be absolutely entitled to receive the
compensation determined in the manner set forth below:

 

(i)    Leesport or Leesport Bank shall make (or cause to be made) a lump-sum
cash payment to Employee no later than thirty (30) days following the date of
such termination in an amount equal to the greater of (A) two (2) times the sum
of (i) Employee’s then Annual Base Salary and (ii) the average of the amount(s)
paid to him (or otherwise accrued) annually under Section 5(b) during the
Employment Period or (B) the present value of the series of payments that would
be made to him, pursuant to Section 8(a)(i), if his termination were governed by
Section 8.

 

(ii)   For purposes of Section 7(a)(i) hereof, the present value of each payment
described in Clause (B) of Section 7(a)(i) shall be determined using the
relevant “applicable federal rate(s)” in effect under Section 1274 of the
Internal Revenue Code of 1986, as amended (the “Code”), on the date of
Employee’s termination of employment.

 

(iii)  In no event shall the termination payment otherwise required under this
section be made to the extent it would trigger a reduction in tax deductions
under Code Section 280G. If Code Section 280G would apply to such payment when
made, the amount of such payment shall be reduced to the maximum amount that can
be paid without triggering the reduction in tax deductions. If Code Section 280G
would become applicable to the termination payment after it is made, Employee
shall be obligated to repay such amount as may be necessary to avoid such
application, determined as provided in the last sentence of Section 8(a) hereof.

 

(b)   Employee shall not be required to mitigate the amount of any payment
provided for in this Section 7 by seeking other employment or otherwise. The
amount of payment provided for in this Section 7 shall not be reduced by any
compensation earned by Employee as the result of employment by another employer
or by reason of Employee’s receipt of or right to receive any retirement or
other benefits after the date of termination of employment or otherwise.

 

8.    Rights in Event of Termination of Employment Absent Change in Control.

 

(a)   Provided that no Change in Control shall have occurred at the date of
termination, in the event that Employee’s employment is terminated by Leesport
Bank other than for death, disability or Cause or Employee terminates his
employment for Good Reason (as hereinafter defined), Leesport or Leesport Bank
shall: (i) pay (or cause to be paid), in the aggregate, to Employee in cash, an
amount equal to the sum of (A) Employee’s Annual Base Salary in effect on the
date of termination and (B) the average of the amount(s) paid to him (or
otherwise accrued) annually under Section 5(b) during the Employment Period,
divided in each case by the number of pay periods during a year, for the greater
of (1) a period of twelve (12) months or (2) the remainder of the then existing
Employment Period, paid at the same intervals as the salary is payable under
Section 5(a) hereof; and (ii) maintain and provide to the Employee, at no cost
to the Employee, for a period ending at the earliest of (A) the expiration of
twelve (12) months from the Employee’s last day of active employment, (B) the
date of the Employee’s full-time employment by another employer, (C) the date
Employee receives medical benefit coverage equivalent to that provided to
Employee on the date of termination from another entity which has engaged
Employee to perform services, or (D) the Employee’s death, medical benefits
coverage for the Employee which the Employee would have been entitled to receive
had his employment with Leesport Bank continued throughout such period.

 

(b)   Employee shall not be required to mitigate the amount of any payment
provided for in this Section 8 by seeking other employment or otherwise. The
amount of payments provided for in

 

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this Section 8 shall not be reduced by any compensation earned by Employee as
the result of employment by another employer or by reason of Employee’s receipt
of or right to receive any retirement or other benefits after the date of
termination of employment or otherwise.

 

(c)   The amounts payable pursuant to this Section 8 shall constitute Employee’s
sole and exclusive remedy in the event of involuntary termination of Employee’s
employment in the absence of a Change in Control.

 

(d)   As used in this Agreement, “Good Reason” shall mean: (i) the material
reduction in Employee’s duties, responsibilities or authority or a change in
titles (except that a change in title relating to Employee’s status as President
of The Madison Bank Division of Leesport Bank at any time that such Division is
no longer maintained by Leesport as permitted by the terms of the Merger
Agreement shall not constitute an event of Good Reason hereunder); (ii) a
reduction by Leesport Bank or Leesport in Employee’s Annual Base Salary or in
other benefits, in the aggregate, payable to the Employee hereunder (except that
a reduction in benefits permitted by Section 5(d) of this Agreement shall not be
considered of purposes of determining whether an event of Good Reason has
occurred hereunder); (iii) Leesport Bank or Leesport’s failure to pay the
Employee any amounts otherwise vested and due hereunder or under any plan or
policy of the Leesport Bank or Leesport; or (iv) a relocation of the Employee’s
primary place of employment, without the Employee’s expressed written approval,
to a location more than twenty (20) miles from the location at which the
Employee performed his duties as of the date of this Agreement (except that a
relocation of the Employee’s primary place of employment to Leesport’s corporate
headquarters at such time in order for the Employee to accept a position of
increased responsibilities, provided that such location is not more than seventy
(70) miles from the location at which the Employee performed his duties as of
the date of this Agreement, shall not constitute an event of Good Reason
hereunder).

 

9.    Covenant Not to Compete or Solicit.

 

(a)   Employee hereby acknowledges and recognizes the highly competitive nature
of the business of Leesport, Leesport Bank and their subsidiaries and affiliates
and accordingly agrees that, during the Employment Period and for a period of
one (1) calendar year following termination of Employee’s employment (except
that this Section 9 shall not apply if Leesport or Leesport Bank terminates the
Employee’s employment without Cause or the Employee terminates his employment
for Good Reason), Employee shall not:

 

(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 five percent (5%) of the stock of a
publicly owned company) or otherwise of any person, firm, corporation or
enterprise engaged in (1) the banking (including bank holding company) industry
or (2) any other activity in which Leesport, Leesport Bank or any of their
subsidiaries or affiliates is engaged (and in which Employee is also engaged)
during the Employment Period, with a 25-mile radius of any branch office of
Leesport Bank (the “Non-Competition Area”); or

 

(ii)   provide financial or other significant assistance to any person, firm,
corporation, or enterprise engaged in (1) the banking (including bank holding
company) industry or (2) any other activity in which Leesport, Leesport Bank or
any of their subsidiaries or affiliates is engaged (and in which Employee is
also engaged) during the Employment Period, in the Non-Competition Area; or

 

(iii)  solicit any person, firm, corporation, or enterprise who or which at any
time during the Employment Period was a customer of Leesport, Leesport Bank or
any of their

 

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subsidiaries or affiliates for the purpose of providing them with products or
services competitive with those provided by any of such entities; or

 

(iv)  solicit or hire any employees of Leesport, Leesport Bank or any of their
subsidiaries or affiliates or induce any of such employees to terminate their
employment relationship with Leesport, Leesport Bank or any of such subsidiaries
or affiliates.

 

(b)   It is expressly understood and agreed that, although Employee and Leesport
and Leesport Bank consider the restrictions contained in Section 9(a) hereof
reasonable for the purpose of preserving the good will and other proprietary
rights of Leesport, Leesport Bank and their subsidiaries and affiliates, if a
final judicial determination is made by a court having jurisdiction that the
time or territory or any other restriction contained in Section 9(a) hereof is
an unreasonable or otherwise unenforceable restriction against Employee, the
provisions of Section 9(a) hereof shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such other extent
as such court may judicially determine or indicate to be reasonable.

 

10.    Unauthorized Disclosure.    During the term of his employment hereunder,
or at any later time, Employee shall not, without the written consent of the
Board of Directors of Leesport, the Chief Executive Officer of Leesport or a
person authorized by any of them, knowingly disclose to any person, other than
an employee of Leesport or Leesport Bank, or any of their respective
subsidiaries or affiliates, or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Employee of his
duties as an employee of Leesport Bank, any material confidential information
obtained by him while in the employ of Leesport Bank with respect to any of
Leesport’s, Leesport Bank’s and their subsidiaries’ and affiliates’ services,
products, improvements, formulas, designs or styles, processes, customers,
methods of business or any business practices the disclosure of which could be
or will be damaging to Leesport, Leesport Bank or any of their subsidiaries or
affiliates; provided, however, that confidential and proprietary information
shall not include any information known generally to the public (other than as a
result of unauthorized disclosure by Employee or any person with the assistance,
consent or direction of Employee) or any information of a type not otherwise
considered confidential by persons engaged in the same business or a business
similar to that conducted by Leesport, Leesport Bank or any of their
subsidiaries or affiliates, or any information that must be disclosed as
required by law or legal process.

 

11.    Notices.    Except as otherwise provided in this Agreement, any notice
required or permitted to be given under this Agreement shall be deemed properly
given if in writing and if mailed by registered or certified mail, postage
prepaid with return receipt requested, to Employee’s residence, in the case of
notices to Employee, and to the principal Employee offices of Leesport and
Leesport Bank, in the case of notices to Leesport and Leesport Bank.

 

12.    Waiver.    No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Employee and an executive officer specifically designated by the
Board of Directors of Leesport or Leesport Bank. No waiver by a party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

 

13.    Assignment.    This Agreement shall not be assignable by any party,
except by Leesport and Leesport Bank to any successor in interest to their
respective businesses.

 

14.    Entire Agreement.    This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement.

 

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15.    Successors, Binding Agreement.

 

(a)   Leesport and Leesport Bank will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the businesses and/or assets of Leesport and Leesport Bank
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that Leesport and Leesport Bank would be required to perform
it if no such succession had taken place. Failure by Leesport and Leesport Bank
to obtain such assumption and agreement prior to the effectiveness of any such
succession shall constitute a breach of this Agreement and the provisions of
Sections 4, 6 and 7 of this Agreement shall apply. As used in this Agreement,
“Leesport” and “Leesport Bank” shall mean Leesport and Leesport Bank as defined
previously and any successor to their respective businesses and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise.

 

(b)   This Agreement shall inure to the benefit of and be enforceable by
Employee’s personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. If Employee should die after either a
Notice of Termination is delivered by Employee, or following termination of
Employee’s employment without Cause, and any amounts would be payable to
Employee under this Agreement if Employee had continued to live, all such
amounts shall be paid in accordance with the terms of this Agreement to
Employee’s devisee, legatee, or other designee, or, if there is no such
designee, to Employee’s estate.

 

16.    Arbitration.    Leesport, Leesport Bank and Employee recognize that, in
the event a dispute should arise between them concerning the interpretation or
implementation of this Agreement, lengthy and expensive litigation will not
afford a practical resolution of the issues within a reasonable period of time.
Consequently, each party agrees that all disputes, disagreements and questions
of interpretation concerning this Agreement are to be submitted for resolution
in a location mutually agreed to by Leesport and Employee, or, in the absence of
such agreement, 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 (“Rule”). Leesport and Leesport Bank or Employee may initiate an
arbitration proceeding at any time by giving notice to the other in accordance
with the Rules. Leesport, Leesport Bank and Employee, may, as a matter or 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, Leesport, Leesport Bank and Employee 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.

 

17.    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.

 

18.    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.

 

19.    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.

 

20.    Effective Date; Change in Control Payment; Termination of Madison
Employment Agreement and Prior Severance Agreements.    This Agreement shall
become effective only at the Effective Time of the

 

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Merger. Prior to the Effective Time, neither Leesport, Leesport Bank, nor any of
their respective subsidiaries or affiliates shall have any obligation to
Employee hereunder or otherwise. Effective at the Effective Time of the Merger,
the Madison Employment Agreement, and any other agreement, arrangement or
understanding between Employee and Madison relating to Employee’s employment or
compensation, shall terminate and be of no further force and effect.
Notwithstanding the preceding sentence, on the Closing Date, Employee shall
receive, in complete satisfaction of any rights of Employee under the Madison
Employment Agreement or any other agreement, arrangement or understanding with
Madison (including without limitation Section 3.5 of the Madison Employment
Agreement), a lump-sum cash payment in the amount of Six Hundred Fifty-Two
Thousand Six Hundred Fifty Dollars ($652,650.00) or such lesser amount as may be
necessary such that such payment, together with all other amounts or benefits
provided to or on behalf of Employee in connection with the Merger would not
result in the reduction of tax deductions under Code Section 280G.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

LEESPORT FINANCIAL CORP.

 

 

 

 

 

By:

/s/ Raymond H. Melcher, Jr.

 

 

Name: Raymond H. Melcher, Jr.

 

 

Title: Chairman, President and Chief Executive Officer

 

 

 

 

 

 

 

ATTEST:

 

 

 

 

 

By:

/s/ Jenette L. Eck

 

 

Name: Jenette L. Eck

 

 

Title: Secretary

 

 

 

 

 

“Leesport”

 

 

 

 

 

LEESPORT BANK

 

 

 

 

 

By:

/s/ Raymond H. Melcher, Jr.

 

 

Name: Raymond H. Melcher, Jr.

 

 

Title: Chairman, President and Chief Executive Officer

 

 

 

 

 

ATTEST:

 

 

 

 

 

By:

/s/ Jenette L. Eck

 

 

Name: Jenette L. Eck

 

 

Title: Secretary

 

 

 

 

 

“Leesport Bank”

 

 

 

 

WITNESS:

 

 

 

 /s/ E. Cheryl Hinkle Richards

 

/s/ Vito A. DeLisi

(SEAL)

 

Vito A. DeLisi

 

 

 

 

“Employee”

 

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