Exhibit 10.11
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
METRO BANCORP, INC. AND
METRO BANK
 
 
 
Gary L. Nalbandian
 
 
 
EFFECTIVE DATE December 17, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

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TABLE OF CONTENTS
 
PAGE
 
1
 
Employment and Term of Employment
1
 
2
 
Services and Duties
1
 
3
 
Compensation
2
 
4
 
Fringe and Other Benefits
2
 
5
 
Disability and Death Compensation
3
 
6
 
Termination by Metro for Cause
4
 
7
 
Termination by Metro Without Cause
4
 
8
 
Termination “For Good Reason” by Executive
5
 
9
 
"Change in Control" and "Good Reason"
5
 
10
 
Additional Payments/Excise Taxes
6
 
11
 
Other Rights for Termination “Without Cause” or “For Good Reason”
8
 
12
 
Source of Payment and Timing
9
 
13
 
Interest
9
 
14
 
Reimbursement of Enforcement Expenses
9
 
15
 
Confidential Information and Non-Competition
10
 
16
 
Successions
11
 
17
 
Notices
11
 
18
 
General Provisions
12
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This Amended and Restated Employment Agreement (“Agreement”) is dated effective
as of December 17, 2010, by and between METRO BANCORP, INC., a Pennsylvania
corporation (“Metro”), and METRO BANK, a Pennsylvania bank and a wholly-owned
subsidiary of Metro (“Bank”), and Gary L. Nalbandian (“Executive”).
 
BACKGROUND
 
A.Executive is employed as the Chairman, President and Chief Executive Officer
of Metro and Bank.
 
B.The Boards of Directors of Metro and Bank (separately or collectively, the
"Board") have determined that the services of Executive in these capacities are
valuable to Metro and Bank.
 
C.Accordingly, the Board wishes to have Executive's services available to Metro
and Bank for at least three (3) years and to provide supplemental benefits to
Executive should his employment with Metro and/or Bank terminate under certain
circumstances or should he die or become disabled before the termination of this
Agreement.
 
D.The Board and Executive entered into an employment agreement, effective
February 23, 2009 (the “Original Agreement”) and now the parties desire to amend
and restate the Original Agreement in order to eliminate any inadvertent
inconsistencies in the Original Agreement and to comply with the Internal
Revenue Service interpretations and guidance set forth in Notices 2010-6 and
2010-80.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained here, and intending to be legally bound, the parties agree as follows:
 
1. Employment and Term of Employment.
1.1 Three-Year Term. Metro offers Executive employment, and Executive accepts
such employment, subject to all the terms and conditions of this Agreement, for
a term of three (3) years beginning on the date of the Original Agreement.
1.2 Conditions to Term. This three-year term is subject to:
(a) Automatic Renewal and Extension. On each Anniversary Date of the Original
Agreement, this Agreement and Executive's employment shall automatically be
renewed and extended (upon the same terms and conditions) for a new three (3)
year term unless written notice by either party is given pursuant to Section 1.2
(b) below.
(b) Termination on Anniversary Date. Either Metro or Executive may terminate
this Agreement on any Anniversary Date by giving to the other party written
notice of termination no later than ninety (90) days before any such Anniversary
Date. If such notice is given to either party, the Term will have two (2) years
remaining from the applicable Anniversary Date, subject to the terms and
conditions of this Agreement.
(c) Termination for Other Reasons. This Agreement may be terminated on Death,
“For Cause,” “Without Cause,” or for “Good Reason” as described in Sections 5,
6, 7 and 8 below.
1.3 “Term” Definition. "Term" means the original three (3) year employment
period, as well as any renewed or extended periods as provided for in this
Agreement.
1.4 “Anniversary Date “ Definition. “Anniversary Date” means March 1, 2010, as
well as each annual March 1 thereafter if this Agreement is automatically
renewed or extended.
2. Services and Duties.
2.1 Offices. During the Term, Executive shall be employed as Chairman, President
and Chief Executive Officer of Metro and Bank.
2.2 Duties. As the Chairman, President and Chief Executive Officer of Metro and
Bank, Executive

 

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shall have primary responsibility for all operations of Metro and its
subsidiaries and shall have such powers and duties as may from time to time be
prescribed by the Boards of Directors of Metro and Bank.
(a) Full Time and Best Efforts. Executive accepts such duties and agrees to his
continued employment and to devote his full time and efforts to the business and
affairs of Metro, Bank and their subsidiaries, if any, and to use his best
efforts to promote the interests of Metro, Bank and their subsidiaries.
(b) Outside Activities. Executive also has participated in and shall have
discretion to participate in outside activities. Such outside activities are
expressly permitted, and shall be in addition to and notwithstanding Executive's
obligation of full time and best efforts as described in Section 2.2(a)
3. Compensation.
3.1 Compensation Definition. “Compensation” means the sum of the highest annual
rate of base salary (described in Section 3.2) and highest cash bonus (described
in Section 3.3) paid to Executive during the most recent twenty-four (24) months
of the Term.
3.2 Base Salary. For all positions held by him during the Term and for all
services to be rendered by him under this Agreement, Metro shall pay Executive
“base salary” at the initial rate of $495,000 per year.
(a) Payment. Base salary is payable at regular intervals in accordance with
Metro's normal payroll practices now or subsequently in effect.
(b) Adjustment. Executive's base salary shall be subject to an annual review and
subject to such upward adjustments as may be deemed appropriate by the Board or
a Board-designated Committee. The Board or Board-designated Committee may
approve an increase in salary for Executive, but shall have no obligation to do
so. Base salary may not be decreased without Executive's written consent.
3.3 Plans and Programs. During the Term, Executive shall be entitled to
participate in any cash or other bonus programs, incentive compensation plans,
stock option plans or similar benefit or compensation programs now or later in
effect that are generally made available to executive officers of Metro.  In
addition to any incentive compensation that Executive may be entitled to
pursuant to this Section, upon the Closing and subject to the provisions of the
2006 Employee Stock Option Plan, Executive shall be awarded options to acquire
100,000 shares of Metro common stock.
 (a) Annual Bonus. Any annual bonus (or prorated portion of an annual bonus)
earned and payable to Executive hereunder shall be paid on or after January 1
but not later than March 15 of the calendar year following the calendar year for
which the annual bonus (or prorated portion of an annual bonus) is earned. It is
understood by the parties that a bonus payment is not guaranteed.
  (b) Pro-Ration. For any period less than a full year during the Term,
Executive shall receive an amount equal to the pro-rated portion of any payment
pursuant to such plan or program.
3.4 Year. A “year” shall be deemed to commence on signing the Original Agreement
and on January 1 of each subsequent calendar year.
3.5 Compensation Pro-Ration. Compensation for a portion of a year shall be
pro-rated. 
4. Fringe and Other Benefits. During the Term, Executive shall also be entitled
to:
4.1 Generally Available Benefits. Participate in all fringe benefits as then in
effect that are generally available to Metro's executive officers including,
without limitation, medical and hospitalization coverage, long-term care
insurance, life insurance coverage and disability coverage. In addition, Metro
shall provide medical insurance coverage for Executive and his dependents, if
any, for the life of Executive. If such coverage is not possible under the Metro
medical plan, Metro shall reimburse Executive for the cost of such coverage. It
is provided, however, that this extended medical insurance coverage will be
provided subject to the following conditions: (i) the amount of medical
insurance provided by Metro or the reimbursement to Executive for medical
insurance during any calendar year may not affect the coverage provided or the
amount eligible for reimbursement in any other calendar year; (ii) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred; and (iii)
the medical insurance coverage or the right to reimbursement for medical
insurance is not subject to liquidation and cannot be exchanged

 

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for cash or any other benefit.
 
4.2 Other Benefits. Such other fringe benefits as the Board, or a
Board-designated Committee, shall deem appropriate; provided that such benefits
are consistent with those that Executive currently enjoys including, without
limitation, use of an automobile, paid holidays, six (6) weeks' vacation each
calendar year and club memberships. Regardless of the reason for termination of
Executive's employment, Executive will be provided use of the automobile that he
has at the time of his termination until the latest to occur of the end of the
lease term on such automobile or the end of the Term of this Agreement. It is
provided, however, that Executive's right to use of the automobile is not
subject to liquidation and cannot be exchanged for cash or any other benefit.
 
4.3 Expenses. Reimbursement by Metro for all expenses incurred by Executive
which Metro determines to be reasonable and necessary (in accord with its normal
reimbursement practices now or later in effect) for Executive to carry out his
duties under this Agreement.  
4.4 Indemnity. Indemnification by Metro to the fullest extent permitted by
governing law and in accordance with Metro's bylaws and policies, against all
claims concerning Executive's status as an officer, director, employee, or agent
of Metro.
5. Disability and Death Compensation
5.1 Permanent Disability. Executive shall be deemed to have become permanently
disabled if he is unable to engage in any substantial gainful activity by reason
of a medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months. In the event Executive becomes permanently disabled during
the Term of this Agreement, he shall be compensated for the balance of the Term
as provided in Section 5.3.
5.2 Disability Leave. Executive shall qualify for disability leave under this
Agreement if he becomes unable to perform the duties and services of the
character contemplated by this Agreement because of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than six (6) months. If
Executive qualifies for disability leave while employed during the Term, this
Agreement and Executive's employment will not terminate at such time but
Executive shall be placed on disability leave until the first to occur of: (i)
Executive's qualification for permanent disability as provided in Section 5.1;
(ii) the expiration of this Agreement; or (iii) Executive's recovery from
disability. It is provided, however, that disability leave shall in no event be
longer than twenty-nine (29) months.
5.3 Disability Compensation. Metro shall compensate Executive during the time he
is on disability leave at a rate equal to 70% of his Compensation at the time he
is placed on disability leave. If Executive becomes permanently disabled during
the time he is on disability leave and the Term of this Agreement has not
expired, Metro shall continue the payments described in this Section for the
balance of the Term.
  (a) Monthly Payments. Metro agrees that it will make the payments due under
this Section 5.3 on the first day of each month, commencing with the first day
of the month following the month in which Executive is placed on disability
leave, in an amount equal to 1/12 of 70% of his Compensation at the time he is
placed on disability leave.
Insurance Reductions. Such payments shall be reduced each month by the amount of
any disability payments made to Executive under any Metro-sponsored disability
insurance plan. The amount of the reduction under the preceding sentence shall
be computed as if Executive had elected to receive monthly payments of
disability benefits (regardless of the actual payment frequency).
  (b) Disability Benefits. If Executive is placed on disability leave or becomes
permanently disabled as provided in this Section 5, then he shall nonetheless
continue, after becoming so disabled and until the end of the Term, to be
entitled to receive at Metro's expense such group hospitalization coverage, life
insurance coverage and disability coverage as is generally made available from
time to time to executive officers of Metro, if and to the extent permitted by
the respective insurers of such coverage. Until such time as Executive is placed
on disability leave, he shall continue to receive his full compensation and
fringe benefits due him under Sections 3 and 4 above.
5.4 Payment upon Executive's Death. If Executive dies during the Term while
employed hereunder, then:
(a) Termination of Employment and Regular Compensation. Executive's employment
and his

 

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rights to compensation hereunder shall automatically terminate at the close of
the calendar week in which death occurs; and
(b) Death Benefit. Metro shall pay the person designated by Executive in a
notice filed with Metro or to the personal representative of Executive's estate
(if no person is designated by Executive) an amount equal to the product of
three (3) times Executive's Compensation at the time of his death in addition to
any amount of compensation then accrued and owed to Executive upon his death.
(c) Life Insurance. The “death benefit” provided pursuant to Section 5.4(b)
shall be in addition to any amount payable under any group life insurance
program maintained by Metro or Bank.
6. Termination by Metro For Cause.
6.1 “For Cause” Termination. Metro shall have the right at any time to terminate
Executive's employment “For Cause” only if:
 
(a) Prior Written Notice. Metro shall give Executive not less than thirty (30)
days prior written notice of its intention to terminate his employment,
specifying in detail the reason(s) for such termination and the date of
termination; and 
 
(b) Failure to Cure. After receipt of such notice, Executive fails to cure,
cease or remedy the reason(s) for such termination before the date of
termination stated in such notice. 
6.2 “For Cause” Definition. “For Cause” means only the following at any time
during the Term:
 
(a) Conviction or Plea. If Executive is indicted for, convicted of or enters a
plea of guilty or nolo contendere to, a felony, a crime of falsehood or a crime
involving fraud, moral turpitude or dishonesty; or
 
(b) Willful Violation. If Executive willfully violates any of the terms or
provisions of this Agreement, including, without limitation: 
 
(i) the willful failure of Executive to perform his duties hereunder or the
instructions of the Board after written notice of such instructions (other than
any such failure resulting from Executive's incapacity due to illness or
disability); or
(ii) Executive engages in any conduct materially harmful to Metro's business,
and in either case fails to cease such conduct or correct such conduct, as the
case may be, within thirty (30) days subsequent to receiving written notice from
the Board advising Executive of same (which conduct shall be specifically set
forth in such notice).
6.3 Compensation on Termination “For Cause.” If Executive's employment shall
terminate For Cause, then Metro shall pay Executive in accordance with the
regular payroll practices of Metro, his full base salary through the date of
termination at the rate currently in effect and pay such other compensation as
may have accrued and be due Executive pursuant to Sections 3 and 4. Metro shall
have no further obligations to Executive under this Agreement.
7. Termination by Metro Without Cause
7.1 “Without Cause” Termination. Metro shall have the right to terminate
Executive's employment “Without Cause” by giving not less than thirty (30) days
prior written notice of its intention to terminate Executive's employment
“Without Cause” pursuant to this Section 7. 
7.2 “Without Cause” Definition. Termination “Without Cause” means any reason
other than by either Termination “For Cause” (Section 6 above), Termination at
the Anniversary (Section 1.2(b) above), or termination due to death or
disability (Section 5 above).
7.3 Compensation for Termination “Without Cause.” Metro shall pay Executive the
following if Metro terminates Executive's employment “Without Cause”:
(a) Compensation through Termination Date. A pro-rated portion of Executive's
full compensation through the date of termination in accordance with the regular
payroll practices of Metro, and any compensation due him as provided in Section
4 above; and
(b) “Without Cause Severance Payment.” In lieu of any further Compensation
payments to

 

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Executive after the date of termination, a lump sum severance payment equal to
three (3) times Executive's Compensation then in effect.
8. Termination “For Good Reason” by Executive.
8.1 “Good Reason” Termination. Executive shall have the right to terminate his
employment “For Good Reason” (as defined in Section 9.2 below) if: 
(a) Prior Written Notice. Executive has given notice to Metro of the existence
of the condition(s) described in Section 9.2 within ninety (90) days of the
initial existence of the condition(s);  
(b) Failure to Cure. If within a period of thirty (30) days after receipt of
such notice (the “Cure Period”), Metro fails to cure, cease or remedy the
reason(s) for such termination; and
(c) Separation from Service. Executive's separation from service occurs within a
period of ninety (90) days following the expiration of the Cure Period.
 
8.2 Compensation for “Good Reason” Termination. Metro shall pay Executive the
following if Executive terminates his employment “For Good Reason” (as defined
in Section 9.2):
 
(a) Compensation through Termination Date. A pro-rated portion of Executive's
full compensation through the date of termination in accordance with the regular
payroll practices of Metro, and any compensation due him as provided in Section
4 above; and
(b) “Good Reason Severance Payment.” In lieu of any further Compensation
payments to Executive after the date of termination, a lump sum severance
payment equal to three (3) times Executive's Compensation then in effect.
9. “Change in Control” and “Good Reason.”
9.1 Change in Control Definition. “Change in Control” or “Change of Control”
means a change in control of Metro of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
any successor provisions under the Exchange Act, whether or not Metro is subject
to such reporting requirement; provided that, without limitation, such a change
in control shall have been deemed to occur conclusively when any of the
following events shall have occurred without Executive's prior written consent:
 
(a) Board Change. Within any period of two (2) consecutive years during the
Term, there is a change in at least a majority of the members of the Board or
the addition of five or more new members to the Board, unless such change or
addition occurs with the affirmative vote in writing of Executive in his
capacity as a director or a shareholder; or
(b) Beneficial Ownership Change. A Person or group acting in concert as
described in Section 13(d)(2) of the Exchange Act holds or acquires beneficial
ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of
a number of common shares of Metro which constitutes either:
(i)   more than fifty (50%) percent of the shares which voted in the election of
directors of Metro at the shareholders' meeting immediately preceding such
determination; or
(ii)  more than thirty (30%) percent of Metro's outstanding common shares. For
this Section 9.1(b)(ii), unexercised warrants or options or unconverted
nonvoting securities shall count as constituting beneficial ownership of Metro's
common shares into which the warrants or options are exercisable or the
nonvoting convertible securities are convertible, notwithstanding anything to
the contrary contained in Rule 13d-3 of the Exchange Act.
 9.2 Good Reason Definition. “Good Reason” means: 
 
(a) Both a Change in Control and Other Reductions. Both a “change in control” of
Metro (as defined in Section 9.1 above); and if any of the following “Other
Reductions” occur within three (3) years after such change in control without
Executive's prior written consent: 
 (i) Reduction of Authority. The nature and scope of Executive's authority with
Metro or a

 

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surviving or acquiring Person are materially reduced to a level below that which
he enjoys when the change in control occurs;
 
(ii) Materially Inconsistent Duties. The duties and responsibilities assigned to
Executive are materially inconsistent with those which he enjoys when the change
in control occurs, resulting in a diminution of Executive's authority, duties or
responsibilities;  
(iii) Materially Reduced Benefits. The fringe benefits which Metro provides
Executive are materially reduced to a level below that which he enjoys when the
change in control occurs;  
(iv) Reduction of Position or Title. Executive's position or title with Metro or
the surviving or acquiring Person is reduced from his current position or title
with Metro when the change in control occurs, resulting in a diminution of
Executive's authority, duties or responsibilities; or
         (v) Transfer or Offices and Relocation. Any relocation or transfer of
Metro's principal executive offices to a location more than fifty (50) miles
from Executive's principal residence on the date when the change in control
occurs; or, if Executive is required, without his prior written consent, to
relocate more than fifty (50) miles from his principal residence when the change
in control occurs.
 
(b) Material Breaches. Metro materially breaches this Agreement; or
 (c) Non-Assumption. There is a failure or refusal of any successor to Metro to
assume all duties and obligations of Metro under this Agreement.
 
10. Additional Payments/Excise Taxes. 
10.1 Gross-Up Payment. Notwithstanding anything in this Agreement to the
contrary or any termination of this Agreement, Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) if: 
 
(a) Tax is Determined Due. It shall be determined that any payment or
distribution or benefit made or provided by Metro or its affiliates to or for
the benefit of Executive, whether pursuant to this Agreement or some other plan
or otherwise, and determined without regard to any additional payments required
under this Section 10 (a “Payment”), would be an excess Parachute Payment that
is not deductible by Metro for federal income tax purposes and subject to an
excise tax; or 
 
(b) Interest or Penalties are Incurred. Any interest or penalties are incurred
by Executive concerning such excise tax. 
 
(i) Excise Tax Definition.  “Excise Tax” means both: any excise tax imposed on
any compensation payments or rights due to Executive because of Section 280G and
Section 4999 of the Internal Revenue Code of 1986 as amended (the “Code”) or any
successor Code provision, or any state or local law; and interest or penalties
incurred concerning such excise tax.
 
(ii) Gross-Up Payment Definition. “Gross-Up Payment” means any amount of
additional payments to Executive that are needed so that Executive incurs no
out-of-pocket expense for Excise Taxes, and to place Executive in the same
position after all federal and state taxes - including all income tax, Excise
Tax, employment or other tax or any penalties and interest - that Executive
would have been in if: (a) Executive did not have to pay the Excise Tax; (b) the
Excise Tax did not apply for reasons other than Sections 280G and 4999 of the
Code; and (c) Executive did not have to pay any interest or penalty charge for
the imposition of any portion of the Excise Tax.
 
10.2 Gross-Up Payment Determination. All determinations required to be made
under this Section 10, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment, the calculations under Section
280G and 4999 of the Code, and the assumptions to be used in arriving at such
determination, shall be made by Metro's independent auditor or another
nationally recognized accounting firm chosen by the auditor with the consent of
Metro and Executive (the “Accounting Firm”). 
 
(a) Cooperation. Metro and Executive shall cooperate with Accounting Firm and
provide information needed for the determination. 
 (b) Calculations. Accounting Firm shall provide detailed supporting
calculations both to Metro and

 

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Executive within fifteen (15) business days of the receipt of notice from
Executive that there has been a Payment or receipt of Notice of IRS claim under
Section 10.3, or such earlier time as is requested by Metro. 
 (c) Fees and Expenses. Metro shall pay all fees and expenses of the Accounting
Firm for services for this determination. 
 (d) Payment Timing. Metro shall pay any Gross-Up Payment, as determined
pursuant to this Section 10, to Executive within five (5) days of the receipt of
the Accounting Firm's determination, but in no event later than the date
specified in Treasury Regulation Section 1.409A-3(i)(v). 
 (e) Binding Effect. Any determination by the Accounting Firm shall be binding
upon Metro and Executive. 
 (f) Possible Underpayment. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm, it is possible that Metro may not make Gross-Up Payments that
should be made (“Underpayment”).
 (i) Determination. If Metro exhausts its remedies pursuant to Section 10.3 and
Executive is later required, directly or indirectly, to make a payment of any
Excise Tax, then the Accounting Firm shall determine the amount of the
Underpayment that has occurred. Such amount shall be sufficient to put Executive
in the same position after all federal and state taxes - including all income
tax, Excise Taxes, employment, or other taxes, and all penalties and interest on
such taxes - as Executive would have been in if there had been no Underpayment
and Metro had made the appropriate Gross-Up Payment in the first instance.
 
(ii) Payment. Metro shall promptly pay to Executive or for the benefit of
Executive any amounts determined by Accounting Firm to be needed to satisfy any
Underpayment.
 
10.3 Notice of IRS Claim. Executive shall notify Metro in writing of any claim
by the Internal Revenue Service (“IRS”) that, if successful, would require the
payment by Metro of the Gross-Up Payment. 
 
(a) Time and Content of Notice. Such notification shall be given as soon as
practicable but not later than ten (10) business days after Executive is
informed in writing of such claim and shall apprise Metro of the nature of such
claim and the date on which such claim is requested to be paid. 
 (b) Payment Timing. Executive shall not pay such IRS claim until thirty (30)
days after the date on which he gives such notice to Metro (or such shorter
period ending on the date that any payment of taxes on such claim is due). 
 (c) Contest Notice. If Metro notifies Executive in writing before the
expiration of such thirty (30) day period that it desires to contest such IRS
claim, then Executive shall:  
(i) Give Metro any information reasonably requested by Metro relating to such
IRS claim;
 (ii) Take such action in connection with contesting such IRS claim as Metro
shall reasonably request in writing, including, without limitation, accepting
legal representation for such IRS claim by an attorney reasonably selected by
Metro;
 (iii) Cooperate with Metro in good faith in order to effectively contest such
IRS claim; and
 (iv) Permit Metro to participate in any proceedings on such IRS claim.  
(d) Other Contest Terms. Without limitation on the foregoing provisions of this
Section 10.3: 
 
(i) Metro shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
 
(ii) Metro shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearing and conferences with the taxing authority

 

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in respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the IRS claim in any
permissible manner;
 
(iii) Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as Metro shall determine;
 (iv) If Metro directs Executive to pay such IRS claim and sue for a refund,
then Metro shall advance the amount of such payment to Executive on an
interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest
penalties) imposed regarding such advance or regarding any imputed income with
respect to such advance;
 (v) Any extension of the statute of limitations relating to payment of taxes
for the taxable year of Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
 (vi) Metro's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable under this Section 10 and Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
10.4 Refund. Executive shall, subject to Metro's complying with the requirements
of Section 10.3, promptly pay to Metro the amount of any refund actually
received, including any interest paid or credited after applicable taxes if,
after the receipt by Executive of an amount advanced by Metro pursuant to
Section 10.3, Executive becomes entitled to receive any refund for such IRS
claim. 
 
(a)  Denial of Refund. If, after the receipt by Executive of an amount advanced
by Metro pursuant to Section 10.3, a determination is made that Executive shall
not be entitled to any refund for such IRS claim and Metro does not notify
Executive in writing of its intent to contest such denial of refund before the
expiration of thirty (30) days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset the amount of Gross-Up Payment required to be paid.
11. Other Rights for Termination “Without Cause” or “For Good Reason”.
11.1 Other Benefits. Executive shall be entitled to the following from Metro, in
addition to the other Compensation stated in either Section 7.3 or 8.2 above, if
Executive's employment is terminated either “Without Cause” or “For Good Reason”
as set forth in either Section 7.1 or 8.1 above:
 
(a) Insurance. Following the date of termination, Executive shall be entitled to
participate in all Metro disability, hospitalization and life insurance benefits
for a period of three (3) years. In addition, Executive shall continue to be
entitled to medical insurance coverage as provided in Section 4.1. 
 
(i) Exception. If Executive accepts subsequent employment during the three-year
period following the date of termination, then continuation of any medical,
disability, hospitalization and life insurance benefits will be offset by
coverages provided through Executive's subsequent employer.
 
(b) Vesting of Incentive Compensation Awards.. Any outstanding incentive
compensation awards held by Executive, including deferred compensation and
equity awards related to Metro stock (e.g., options, stock appreciation rights,
restricted stock or restricted stock units) shall vest as of the date of
termination of Executive's employment.
 
11.2 Plans and Program Rights. Nothing in this Agreement shall affect or have
any bearing on Executive's entitlement to other benefits under any plan or
program providing benefits by reason of termination of employment.
 
11.3 Reimbursements and In-Kind Benefits. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance
with the requirements of Section 409A of the Code, including, where applicable,
the requirement that:
 
(a) Any reimbursement shall be for expenses incurred during Executive's lifetime
(or during a shorter period of time specified in this Agreement);
(b)  The amount of expenses eligible for reimbursement, or in-kind benefits
provided, during a calendar year may not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other calendar

 

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year;
(c) The reimbursement of an eligible expense will be made on or before the last
day of the calendar year following the year in which the expense is incurred;
(d) The right to in-kind benefits shall not extend beyond the last day of
Executive's second taxable year following his termination of employment; and
(e) The right to reimbursement or in-kind benefits is not subject to liquidation
or exchange for another benefit.
 11.4 No Mitigation by Executive. Executive shall not be required, under any
circumstance including provision in this Agreement, to mitigate the amount of
any compensation or payment provided for in this Agreement by seeking other
employment.
12. Source of Payment and Timing.
12.1 Source. All payments provided under this Agreement shall be paid in cash
from the general funds of Metro.
(a) No special or separate fund shall be required to be established and
Executive shall have no right, title or interest whatsoever in or to any
investment which Metro may make to aid Metro in meeting its obligations
hereunder except to the extent that Metro shall, in its sole and absolute
discretion, choose to designate any of its rights it may have under one or more
life insurance policies it may obtain to cover any of its obligations under this
Agreement.
(b) Nothing contained in this Agreement, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind or
fiduciary relationship between Metro and Executive or any other Person.
12.2 Time. All payments due under Sections 5.2, 6.3, 7.3 or 8.2 above shall be
made not later than the thirtieth (30th) day following the date of termination
of employment.
12.3 Effect of Section 409A. If the termination of employment giving rise to the
severance benefits described in Sections 7.3, 8.2 or 11.1 is not a "separation
from service" within the meaning of Treasury Regulation § 1.409A-1(h)(1), then
to the extent necessary to avoid the imposition of any accelerated or additional
tax under Section 409A of the Code, such benefits will be deferred without
interest until Executive experiences a separation from service. In addition, if
necessary to prevent any accelerated or additional tax under Section 409A of the
Code on amounts payable to Executive upon his separation from service, Metro
will postpone such payments (without any reduction in such payments or benefits
ultimately paid or provided to Executive) until the first payroll date that
occurs after the date that is six months following Executive's "separation of
service" with Metro or RFB. The accumulated postponed amount will be paid in a
lump sum payment within ten days after the end of the six-month period. If
Executive dies during the postponement period and prior to the payment of
postponed amount, the amounts postponed on account of Section 409A shall be paid
to the personal representative of Executive's estate within 60 days after the
date of his death.
13. Interest. In the event any benefits due to Executive are not paid when due
hereunder, Executive shall be entitled (in addition to his other rights and
remedies) to interest on the past due amounts at a rate equal to two percentage
points above the prime rate charged from time to time by Bank, such interest to
commence on the date a benefit was due hereunder.
14. Reimbursement of Enforcement Expenses. Executive shall be entitled to full
reimbursement from Metro for all costs and expenses (including reasonable
attorneys' fees, costs, and interest as stated in Section 13) incurred by
Executive in enforcing his rights under this Agreement if the following exist: 
14.1 Failure to Pay. Metro fails to pay or provide Executive any of the amounts
due him under this Agreement; or 
 14.2 Failure to Provide. Metro fails to provide Executive with any of the other
benefits due him under this Agreement; and 
 14.3 Further Conditions for Reimbursement. Provided that:
 (a)  Metro does not cure any such failure within thirty (30) days after having
received written notice

 

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from Executive of such failure; and 
(b)  There is an adjudication that Executive's action in enforcing his rights
are not frivolous.
15. Confidential Information and Non-Competition.
 15.1 Confidentiality. 
 
(a) Company Information Definition. “Company Information” means all data
relating to Metro's business that is not generally published or available to the
public, including writings, equipment, processes, drawings, strategic plans,
reports, manuals, inventions, records, financial information, business plans,
customer lists, the identity of and other facts concerning prospective
customers, inventory lists, arrangements with suppliers and customers, computer
programs, or other materials embodying trade secrets, customer product
information, or technical or business information of Metro.
 (b) Non-Disclosure and Non-Use. During the Term or any later time, except with
the prior written consent of Metro's Board, Executive shall not, directly or
indirectly: 
(i) Non-Disclosure. Disclose, communicate or divulge Company Information to any
Person other than authorized Metro personnel;  
(ii) Non-Use. Use Company Information for the benefit of himself or any other
Person, other than authorized Metro personnel.  
15.2 Metro's Interests. Executive will not, during the Term, except with the
express prior written consent of Metro's Board, directly or indirectly, in any
capacity (including but not limited to employee, owner, partner, consultant,
agent, director, officer, shareholder or in any other capacity) engage in or
assist any Person to engage in any act or action which he, acting reasonably,
believes or should believe would be harmful or inimical to the interests of
Metro.
 
15.3 Non-Competition and Time of Restrictions.
 (a) Non-Competition. During his employment pursuant to this Agreement and
following termination of Executive's employment for any reason, Executive will
not, except with the express prior written consent of Metro's Board, in any
capacity (including, but not limited to, owner, partner, shareholder,
consultant, agent, employee, officer, director or otherwise), directly or
indirectly, for his own account or for the benefit of any Person:
(i) Business and Geographic Restriction. Establish, engage or participate in or
otherwise be connected with any business which is in competition with Metro or
any of its subsidiaries, including being engaged in commercial banking, mortgage
banking, leasing, or the taking of deposits, and which conducts business in any
geographic area in which Metro and its subsidiaries is then conducting such
business.
 
(ii) Exception. The foregoing shall not prohibit Executive from owning as a
shareholder less than 5% of the outstanding voting stock of an issuer engaged in
the commercial banking business.
 
(b) Time of Restrictions. The non-competition restrictions in Section 15.3 shall
start on the effective date of this Agreement and end eighteen (18) months
following the effective date of termination of Executive's employment under this
Agreement.
 
15.4 Remedies. Any breach by Executive of any of the terms in this Section 15
will result in irreparable injury to Metro for which money damages could not
adequately compensate Metro; and, thus, in the event of any such breach, Metro
shall be entitled (in addition to any other rights and remedies which it may
have at law or in equity) to have an injunction issued by any competent court
enjoining and restraining Executive and/or any other Person involved from
continuing such breach. 
(a) No Defense or Bar. The existence of any claim or cause of action which
Executive may have against Metro or any other Person (other than a claim for
Metro's breach of this Agreement for failure to make payments) shall not
constitute a defense or bar to the enforcement of the terms in this Section 15.
(b) Payments After Breach. In the event of any alleged breach by Executive of
any of the terms in this Section 15, Metro shall continue any and all of the
payments due Executive under this Agreement until such time as a

 

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Court shall enter a final and unappealable order finding such a breach. 
 
(i) Exception. The foregoing shall not preclude a Court from ordering Executive
to repay such payments made to him for the period after the breach is determined
to have occurred or from ordering that payments under this Agreement be
permanently terminated in the event of a material and willful breach.
 
15.5 Enforceability. If any portion of the terms in this Section 15, or their
application, is construed to be invalid or unenforceable, then the other
portions of such terms or their application shall not be affected and shall be
given full force and effect without regard to the invalid or unenforceable
portions to the fullest extent possible. 
 
(a) If any term in this Section 15 is held to be unenforceable because of the
area covered, duration, or scope, then Executive and Metro expressly and
intentionally authorize the court making such determination to reduce the area
and/or duration and/or limit the scope to an enforceable term, so that the term
shall then be enforceable in its reduced form.
 
15.6 Metro Definition. For this Section 15, the term “Metro” means Metro, any
successor of Metro under Section 16 below, and all present and future direct and
indirect subsidiaries and affiliates of Metro including, but not limited to,
Bank.
 
16. Successions.
16.1 Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon:
(a) The parties hereto and their respective heirs, executors, administrators,
successors and assigns; and
(b) Any corporate or other successor of Metro which will acquire, directly or
indirectly, by merger, consolidation, purchase, or otherwise, all or
substantially all of the assets of Metro.
16.2 Death. Upon the death of Executive, except as Executive may have designated
pursuant to Section 5.4 any payments or benefits otherwise due Executive
hereunder shall be paid to or be for the benefit of Executive's legal
representatives.
16.3 Combination. Nothing in the Agreement shall preclude Metro from
consolidating or merging into or with or transferring all or substantially all
of its assets to another Person (a “Combination”).
(a) In the event of a Combination, such other Person shall assume this Agreement
and all obligations of Metro in this Agreement.
(b) Upon a Combination, the term "Metro," as used in this Agreement, shall mean
such other Person and this Agreement shall continue in full force and effect.
17. Notices.
17.1 Form of Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid.
17.2 Place of Notice. Any notice shall be delivered to the following addresses
or to such other address as either party may designate by like notice:
If to Metro, to:
Metro Bank
3801 Paxton Street
Harrisburg, PA 17111
Attn: Chairman, Compensation Committee of the Board of Directors
 
 

 

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If to Executive:
Gary L. Nalbandian
and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.
 
18. General Provisions.
18.1 Entire Agreement. This Agreement constitutes the entire agreement between
the parties concerning its subject matter, and supersedes and replaces all prior
agreements between the parties.
18.2 Amendment, Waiver and Termination.
(a)    General. No amendment, waiver or termination of any of the provisions of
this Agreement shall be effective unless in writing and signed by the party
against whom it is sought to be enforced. Any written amendment, waiver or
termination hereof executed by Metro and Executive (or his legal
representatives) shall be binding upon them and upon all other Persons, without
the necessity of securing the consent of any other Person including, but not
limited to, Executive's spouse, and no Person shall be deemed to be a third
party beneficiary under this Agreement except to the extent provided under
Section 16 above.
(b)    Compliance with Requirements of Troubled Assets Relief Program (TARP).
Notwithstanding Section 18.2 (a), in the event Metro is a participant in TARP,
during such time as the U.S. Treasury Department (“Treasury”) holds an equity or
debt position in Metro, Executive agrees to modify the terms of this Agreement
to comply with any executive compensation requirements of such Program,
including (1) an agreement to relinquish to Metro any bonus or incentive
compensation paid that is based on statements of earnings, gains, or other
criteria that are later proven to be materially inaccurate; and (ii) a
reduction, if necessary, in any compensation so as not to receive any “golden
parachute” payments (based on the applicable Code provision). Executive also
agrees to waive any claims he may have against Metro or Treasury as a result of
any amendments to this Agreement required by TARP.
18.3 Alternate Payments. Bank or any other subsidiary of Metro may make payments
to Executive thereunder in lieu of payments to be made by Metro, and to the
extent such payments are so made, Metro shall be released of its obligations to
make such payments.
18.4 Benefits and Insurance. The benefits provided under this Agreement shall be
in addition to and shall not affect the proceeds payable to Executive's
beneficiaries under group life insurance policies which Metro may be carrying on
Executive's Life.
18.5 Release.  Notwithstanding any other provision of this Agreement, any
severance payments or benefits due Executive under Sections 7 and 8 shall be
paid within ninety (90) days following Executive's termination of employment,
provided that Executive has executed and delivered to Metro an effective general
release and non-disparagement agreement and the statutory period during which
Executive is entitled to revoke the general release and non-disparagement
agreement has expired prior to payment during the ninety (90) day period, and
further provided that the payment would be made in the second taxable year if
the ninety (90) day period began in one taxable year and ended in the subsequent
taxable year. The general release and non-disparagement agreement shall be in a
form reasonably prescribed by Metro and in a manner consistent with the
requirements of the Older Workers Benefit Protection Act and any applicable
state law.
18.6 Definition of Person. "Person" as used in this Agreement means a natural
person, joint venture, corporation, sale proprietorship, trust, estate,
partnership, cooperative, association, non-profit organization or any other
legal entity.
18.7 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same Agreement.
l8.8 No Waiver. Except as otherwise expressly stated in this Agreement, no
failure on the part of any party to this Agreement to exercise and no delay in
exercising any right, power or remedy under this Agreement shall operate as a
waiver; nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
18.9 Assignment. Without Metro's prior written consent and approval, neither
this Agreement nor

 

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any rights to receive payments hereunder shall be voluntarily or involuntarily:
(a) Assigned, transferred, alienated, encumbered or disposed of, in whole or in
part; or
(b) Subject to anticipation, levy, execution, garnishment, attachment by, or
interference or control of, any creditor.
18.10 Jurisdiction. Metro and Executive irrevocably consent to:
(a) Commonwealth of Pennsylvania Courts. The exclusive jurisdiction of the
courts of the Commonwealth of Pennsylvania and the United States District Court
for the Middle District of Pennsylvania in any and all actions arising
hereunder; and
(b) Service of Process. Service of process as set forth in Section 17 above.
18.11 Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
modify any of the terms or provisions of this Agreement.
18.12 Notice of Dispute and Cure. If Metro or Executive has a dispute or claim
under this Agreement, then that dispute or claim shall be described with
specificity in writing; and, the party receiving such written notice shall have
thirty (30) business days to cure the dispute or claim
18.13 Pennsylvania Law. This Agreement shall be governed and construed and the
legal relationships of the parties determined in accordance with the laws of the
Commonwealth of Pennsylvania applicable to contracts executed and to be
performed solely in the Commonwealth of Pennsylvania.
18.14 Any Required Approval. This Agreement is contingent upon any required
approval of the Federal Deposit Insurance Corporation.
18.15 Intent to Comply with Section 409A. This Agreement is intended to comply
with the requirements of Section 409A of the Code or an exemption from Section
409A, and shall in all respects be administered in accordance with Section 409A.
Executive's termination of employment under this Agreement shall be interpreted
in a manner consistent with the separation from service rules under Section
409A. For purposes of Section 409A of the Code, each payment made under this
Agreement shall be treated as a separate payment and the right to a series of
payments under this Agreement shall be treated as a right to a series of
separate payments. In no event shall Executive, directly or indirectly,
designate the calendar year of a payment.
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IN WITNESS WHEREOF, Metro has caused this agreement to be executed by its duly
authorized officers and the Executive has hereunto set his hand and seal as of
the date first above written.
 
METRO BANCORP, INC.
 
/s/ Sherry Richart                    By: /s/ Alan R. Hassman
Attest                        Name: Alan R. Hassman
Title: Chairman, Compensation Committee
 
 
METRO BANK
 
        
 
/s/ Sherry Richart                    By: /s/ Alan R. Hassman
Attest                        Name: Alan R. Hassman
Title: Chairman, Compensation Committee
 
 
EXECUTIVE:
 
 
 
/s/ Sherry Richart                    /s/ Gary L. Nalbandian
Witness                        Gary L. Nalbandian