**Exhibit 10.9**

 

EMPLOYMENT AGREEMENT

 

**THIS AGREEMENT** is made as of this 17th day ofDecember, 2002, between **SUN BANCORP, INC.** (“Corporation”), aPennsylvania business corporation having a place of business at 2-16 SouthMarket Street, Selinsgrove, Pennsylvania 17870, **SUN BANK** (“Bank”), aPennsylvania chartered banking institution having a place of business at 2-16South Market Street, Selinsgrove, Pennsylvania 17870, **BANK CAPITAL SERVICES CORPORATION**(“Services Corporation”), a Pennsylvania business corporation having a place ofbusiness at 1853 Highway 315, Pittston, Pennsylvania 18640,****and **GARY COOK**,****(“Executive”),an individual, (collectively, the “Parties” and, individually, sometimes a“Party”).

 

**WHEREAS**, Corporation is a registered bankholding company;

 

**WHEREAS**, Corporation and ServicesCorporation have executed an agreement for Corporation to acquire ServicesCorporation;

 

**WHEREAS**, Services Corporation will be asubsidiary of Corporation or Bank;

 

**WHEREAS**, any reference solely toCorporation in this Agreement shall mean Corporation, Bank or ServicesCorporation;

 

**WHEREAS,** Corporation, Bank and ServicesCorporation desire to employ Executive to serve in the capacity of President ofServices Corporation and Senior Vice President of Bank under the terms andconditions set forth in this Agreement; and

 

**WHEREAS,** Executive desires to acceptemployment with Corporation, Bank and Services Corporation under the terms andconditions set forth in this Agreement.

 

**NOW, THEREFORE,** the parties hereto, intending to belegally bound, agree as follows:

 

1.                                       **Employment****.**  Corporation, Bank and Services Corporation hereby employ Executive andExecutive hereby accepts employment with Bank and Services Corporation, on theterms and conditions set forth in this Agreement.

 

2.                                       **Duties and Position of Executive****.**  Executive shall perform and discharge welland faithfully such duties as an executive officer of Services Corporation andBank as may be assigned to Executive from time to time by the Boards ofDirectors of Corporation, Bank and/or Services Corporation.  Executive shall be employed as President ofServices Corporation and Senior Vice President of Bank, and shall hold suchother titles as may be given to him from time to time by the Boards ofDirectors of Corporation, Bank and/or Services Corporation.

 

3.                                       **Engagement in Other Employment****.**  Executive shall devote his full time,attention and energies to the business of Corporation, Bank and ServicesCorporation during the Employment Period (as defined in Section 4(a) ofthis Agreement); provided, however, that this Section 3 shall not beconstrued as preventing Executive from (a) investing Executive’s personalassets in enterprises that do not compete with Corporation, Bank and ServicesCorporation or any of their subsidiaries or affiliates, (b) being involved inany charitable or civic activity, or (c) being involved in any other activitywith the prior approval of the Boards of Directors of Corporation, Bank andServices Corporation.  The Executiveshall not engage in any business or commercial activities, duties or pursuitswhich compete with the business or commercial activities of Corporation, Bank,Services Corporation or any of their

 

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subsidiaries oraffiliates, nor may the Executive serve as a director or officer or in anyother capacity in a company which competes with Corporation, Bank, ServicesCorporation or any of their subsidiaries or affiliates.

 

4.                                       **Term of Agreement****.**

 

(a)                                  Employment Period. This Agreement shall be for a three (3) year period (the “EmploymentPeriod”) beginning on the Effective Date as set forth in the Agreement and Planof Reorganization between, among others, Services Corporation and Corporation,and if not previously terminated pursuant to the terms of this Agreement, theEmployment Period shall end three (3) years later.  If the Agreement and Plan of Reorganization between, amongothers, Services Corporation and Corporation, is terminated pursuant to itsterms, the parties to this Agreement shall have no further obligations underthis Agreement and this Agreement shall be null and void.

 

(b)                                 Cause. Notwithstanding the provisions of Section 4(a) of this Agreement,this Agreement shall terminate automatically for Cause (as defined herein) uponwritten notice from the Board of Directors of Corporation to Executive.  As used in this Agreement, the term “Cause”shall mean any of the following:

 
| (i)    | Executive’s conviction  of or plea of guilty or nolo contendere to a felony, a crime of falsehood or  a crime involving moral turpitude, or the actual incarceration of Executive;                                                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (ii)   | Executive’s failure to  follow the good faith lawful instructions of the Board of Directors of  Corporation with respect to its operations, after notice from Corporation,  and a failure to cure such violation within twenty (20) days of said notice;                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (iii)  | the willful failure by  the Executive to substantially perform his duties hereunder, other than a  failure resulting from Executive’s incapacity because of physical or mental  illness, as provided in Section 4(d) of this Agreement, after notice  from the Corporation and a failure to cure such violation within twenty (20)  days of said notice; |
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (iv)   | Executive’s  intentional violation of the provisions of this Agreement, after notice from  Corporation, and a failure to cure such violation within twenty (20) days of  said notice;                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (v)    | dishonesty or gross  negligence of the Executive in the performance of his duties;                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (vi)   | conduct on the part of  the Executive which brings public discredit to  Corporation as determined by a vote of two-thirds (2/3) of the  Board of Directors of Corporation;                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (vii)  | Executive’s breach of  fiduciary duty involving personal profit;                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                               |
| (viii) | Executive’s violation  of any law, rule or regulation governing banks or bank officers or any final  cease and desist order issued by a bank regulatory authority;                                                                                                                                                                                            |

 

 

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| (ix)                                                                                                                                                                                                                                                                                                    | Executive’s unlawful  discrimination, including harassment, against Corporation’s employees,  customers, business associates, contractors or visitors;                                                                                                                                                                                                                                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (x)                                                                                                                                                                                                                                                                                                     | Executive’s theft or  abuse of Corporation’s property or the property of Corporation’s customers,  employees, contractors, vendors or business associates;                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xi)                                                                                                                                                                                                                                                                                                    | any final removal or  prohibition order to which the Executive is subject, by a federal banking  agency pursuant to Section 8(e) of the Federal Deposit Insurance Act;                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xii)                                                                                                                                                                                                                                                                                                   | any act of fraud or  misappropriation by Executive;                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xiii)                                                                                                                                                                                                                                                                                                  | intentional  misrepresentation of a material fact, or intentional omission of information  necessary to make the information supplied not materially misleading, in an  application or other information provided by the Executive to Corporation or  any representative of Corporation in connection with the Executive’s  employment with Corporation;                                                    |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xiv)                                                                                                                                                                                                                                                                                                   | direction or  recommendation of a state or federal bank regulatory authority to remove the  Executive from his position with Corporation, as identified herein;                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xv)                                                                                                                                                                                                                                                                                                    | the willful engaging  by the Executive in misconduct injurious to Corporation, after notice from  Corporation, and a failure to cure such conduct within twenty (20) days of  said notice; or                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xvi)                                                                                                                                                                                                                                                                                                   | willful and serious  violation(s) by Executive of the Bank’s “Core Values,” and a failure to cure  such violation(s) within twenty (20) days after notice by Corporation; if the  violation is so serious that an attempt to cure would be fruitless, no notice  need be given by the Corporation.                                                                                                |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xvii)                                                                                                                                                                                                                                                                                                  | the existence of any  material conflict between the interests of Corporation and the Executive that  is not disclosed in writing by the Executive to Corporation, Bank and  Services Corporation and approved in writing by the Boards of Directors of  Corporation, Bank and Services Corporation and, after notice from  Corporation, a failure to cure such conflict within twenty (20) days of said  notice. |
|                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                             |
| If this Agreement is  terminated for Cause, all of Executive’s rights under this Agreement shall  cease as of the effective date of such termination and all of Corporation,  Bank, and Services Corporation’s compensation and employment obligations  under this Agreement shall terminate. |

 

(c)                                  Notwithstanding the provisions ofSection 4(a) of this Agreement, all of Corporation, Bank and ServicesCorporation’s obligations under this Agreement shall terminate automaticallyupon Executive’s voluntary termination of employment.

 

(d)                                 Disability. Notwithstanding the provisions of Section 4(a) of this Agreement,if, as a result of physical or mental injury or impairment, Executive is unableto perform all of the essential job functions of his

 

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position on a full timebasis, taking into account any reasonable accommodation required by law, andwithout posing a direct threat to himself and others, for a period up to onehundred eighty (180) days, all obligations of Corporation, Bank and ServicesCorporation to pay Executive the compensation as set forth in this Agreementare suspended.  Any paid time off, sickleave, or short term disability pay Executive may be entitled to receive,pursuant to an established disability plan or program of the ServicesCorporation, Bank and/or Corporation, if any exists, shall be considered partof the compensation Executive shall receive while disabled, and shall not be inaddition to the compensation received by Executive under this provision of theAgreement.  Executive further agreesthat should he remain unable to perform all of the essential functions of hisposition on a full time basis, taking into account any reasonable accommodationrequired by law, and without posing a direct threat to himself or others, afterone hundred eighty (180) days, the Services Corporation, Bank and Corporationwill suffer an undue hardship by continuing Executive in his position.  Upon this event, all compensation andemployment obligations of the Services Corporation, Bank and Corporation underthis Agreement shall cease (except Executive’s rights under the Corporation’sthen existing short term and/or long term disability plans, if any), and thisAgreement shall terminate.

 

(e)                                  Death. Notwithstanding the provisions of Section 4(a) of this Agreement,this Agreement shall terminate automatically upon Executive’s death andExecutive’s rights under this Agreement shall cease as of the date of suchtermination.

 

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5.                                       **Employment Period Compensation****.**

 

(a)                                  Annual Base Salary. For services performed by Executive under this Agreement, Corporationshall pay Executive an Annual Base Salary in the aggregate during theEmployment Period at the rate of One Hundred Fifty Thousand Dollars($150,000.00) per year, payable at the same times as salaries are payable toother executive employees of Corporation. Corporation may, from time to time, increase Executive’s Annual BaseSalary, and any and all such increases shall be deemed to constitute amendmentsto this Section 5(a) to reflect the increased amounts, effective as of thedate established for such increases by the Board of Directors of Corporation orany committee of such Board in the resolutions authorizing such increases.

 

(b)                                 Bonus. Executive will be eligible for incentive compensation under the termsand conditions of an incentive compensation plan upon which Corporation, Bank,Services Corporation and Executive shall mutually agree.

 

(c)                                  Employee Benefit Plans. During the term of this Agreement, Executive shall be entitled toparticipate in and receive the benefits of any Employee Benefit Plan currentlyin effect at Corporation, until such time that the Board of Directors ofCorporation authorizes a change in such benefits.  Executive shall also be entitled to participate in any stockoption, pension and profit sharing plans that Corporation may have in effect,subject to the terms and conditions of those plans.

 

(d)                                 Business Expenses. During the term of this Agreement, Executive shall be entitled toreceive prompt reimbursement for all reasonable expenses incurred by him, whichexpenses are properly accounted for, in accordance with the policies andprocedures established by the Board of Directors of Corporation for itsexecutive officers.

 

(e)                                  Automobile. During the term of this Agreement, Executive shall be provided with useof an automobile or reimbursed for automobile expenses in accordance with theterms of the automobile program in effect at Services Corporation at the timethat this Agreement was executed.

 

6.                                       **Rights in Event of Termination of Employment****.**

 

(a)                                  If Corporation terminatesExecutive’s employment under this Agreement without cause, then Executive shallreceive his Annual Base Salary for the remainder of the Employment Period underthis Agreement.  The Annual Base Salarywill be paid to Executive in substantially equal installments on regularpaydays for Services Corporation.  Theamounts payable pursuant to this Section 6 shall constitute Executive’ssole and exclusive remedy in the event of involuntary termination, withoutcause, of Executive’s employment by Corporation.

 

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(b)                                 In the event that Executivevoluntarily terminates his employment all of Executive’s rights under thisAgreement shall cease as of the effective date of termination and all ofCorporation, Bank and Services Corporation’s compensation and employmentobligations under this Agreement shall terminate.

 

7.                                       **Restrictive Covenant**.

 

(a)                                  Executive hereby acknowledges andrecognizes the highly competitive nature of the business of Corporation, Bankand Services Corporation and, accordingly, agrees that, beginning on the datefirst mentioned above and continuing until the second anniversary date of theeffective date of termination of Executive’s employment with Corporation, Bankand Services Corporation, Executive shall not:

 

(i)                                     except for Corporation, Bank,Services Corporation or their subsidiaries or affiliates, be engaged, directlyor indirectly, either for his own account or as agent, consultant, employee,partner, officer, director, proprietor, investor (except as an investor owningless than 5% of the stock of a publicly owned company) or otherwise of anyperson, firm, corporation or enterprise engaged in (1) the equipment and/orautomobile leasing industries or (2) any other activity in which ServicesCorporation or any of its subsidiaries or affiliates are engaged during theEmployment Period, in any county in which, at any time during the EmploymentPeriod or on the date of termination of the Executive’s employment, a branch,office or other facility of Services Corporation or any of its subsidiaries oraffiliates is located, or in any county contiguous to such a county, includingcontiguous counties located outside of the Commonwealth of Pennsylvania (the“Non-Competition Area”); or

 

(ii)                                  provide financial or otherassistance to any person, firm, corporation, or enterprise engaged in (1) theequipment and/or automobile leasing industry or (2) any other activity in whichServices Corporation or any of its subsidiaries or affiliates are engagedduring the Employment Period in the Non-Competition Area; or

 

(iii)                               directly or indirectly contact,solicit or induce any person, corporation or other entity who or which is acustomer or referral source of Corporation, Bank, Services Corporation or anyof their subsidiaries or affiliates, during the term of Executive’s employmentor on the date of termination of Executive’s employment to be a customer orreferral source of any person or entity other than Corporation, Bank, ServicesCorporation or their subsidiaries or affiliates; or

 

(iv)                              directly or indirectly solicit,induce or encourage any employee of Corporation, Bank, Services Corporation orany of their subsidiaries or affiliates, who is employed during the term ofExecutive’s employment or on the date of termination of Executive’s employment,to leave the employ of Corporation, Bank, Services Corporation or theirsubsidiaries or affiliates, or to seek, obtain or accept employment with anyperson or entity other than

 

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Corporation, Bank,Services Corporation or their subsidiaries or affiliates.

 

(b)                                 It is expressly understood andagreed that, although Executive, Corporation, Bank and Services Corporationconsider the restrictions contained in Section 7(a) reasonable for thepurpose of preserving for Corporation, Bank, Services Corporation and their subsidiariesor affiliates, their good will and other proprietary rights, if a finaljudicial determination is made, by a court or arbitration panel havingjurisdiction, that the time or territory or any other restriction contained inSection 7(a) is an unreasonable or otherwise unenforceable restrictionagainst Executive, the provisions of Section 7(a) shall not be renderedvoid, but shall be deemed amended to apply as to such maximum time andterritory and to such other extent as such court may judicially determine orindicate to be reasonable.

 

(c)                                  It is expressly understood andagreed that in the event of a material breach of any provision in thisSection 7, and in addition to any other legal or equitable remedy theCorporation may have, the Corporation shall be entitled to the entry of apreliminary and permanent injunction (including, without limitation, specificperformance by a court of competent jurisdiction in Pennsylvania, or elsewhere)to restrain the violation or breach thereof by Executive, and Executive submitsto the jurisdiction of such court in any such action.

 

(d)                                 It is expressly understood andagreed that if the Executive’s employment is terminated under this Agreement,other than for Cause (as defined herein), then the restrictions contained inthis Section 7 shall only apply during the remainder of the EmploymentPeriod, while Executive receives the payments identified in Section 6(a)of this Agreement.  If the Executive’semployment is terminated after the Employment Period and this Agreement haveexpired, other than for Cause (as defined herein), then the restrictionscontained in this Section 7 shall not apply to Executive.

 

8.                                       **Unauthorized Disclosure****.** During the term of his employment hereunder, or at any later time, theExecutive shall not, without the written consent of the Board of Directors ofCorporation or a person authorized thereby, knowingly disclose to any person,other than an employee of the Corporation or a person to whom disclosure isreasonably necessary or appropriate in connection with the performance by theExecutive of his duties as an executive of Corporation, any materialconfidential information obtained by him while in the employ of Corporationwith respect to any of the services, products, improvements, formulas, designsor styles, processes, customers, customer lists, methods of business or anybusiness practices of Corporation, Bank, Services Corporation or theirsubsidiaries or affiliates, the disclosure of which could be or will bedamaging to Corporation, Bank, Services Corporation or their subsidiaries oraffiliates; provided, however, that confidential information shall not includeany information known generally to the public (other than as a result ofunauthorized disclosure by the Executive or any person with the assistance,consent or direction of the Executive) or any information of a type nototherwise considered confidential by persons engaged in the same business or abusiness similar to that conducted by Corporation, Bank, Services Corporationor their subsidiaries or affiliates or any information that must be disclosedas required by law.

 

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9.               **Work Made for Hire.**  Any work performed bythe Executive under this Agreement should be considered a “Work Made for Hire”as that phrase is defined by the U.S. patent laws and shall be owned by and forthe express benefit of Corporation, Bank, Services Corporation and theirsubsidiaries and affiliates.  In theevent it should be established that such work does not qualify as a Work Madefor Hire, the Executive agrees to and does hereby assign to Corporation, Bank,Services Corporation and their affiliates and subsidiaries, all of his rights,title, and/or interest in such work product, including, but not limited to, allcopyrights, patents, trademarks, and proprietary rights.  Executive further agrees that any businessthat he generates, produces or sells during his employment is the exclusivebusiness of Corporation, Bank and Services Corporation and Executive has no individualrights to or ownership of such business.

 

10.         **Returnof Company Property and Documents.**  The Executive agreesthat, at the time of termination of his employment, regardless of the reasonfor termination, he will deliver to Corporation, Bank, Services Corporation andtheir subsidiaries and affiliates, any and all company property, including, butnot limited to, automobiles, keys, security codes or passes, mobile telephones,pagers, computers, devices, confidential information, records, data, notes,reports, proposals, lists, correspondence, specifications, drawings,blueprints, sketches, software programs, equipment, other documents orproperty, or reproductions of any of the aforementioned items developed orobtained by the Executive during the course of his employment.

 

11.         **Changein Control****.** If a Change in Control (as defined in Section 11(b) of thisAgreement) shall occur, then, Executive shall be entitled to receive a lump sumamount equal to all monies that remain due to Executive under this Agreementfor the remainder of the Employment Period. Said payment shall be made to the Executive on the Change in ControlDate; provided, however, that in the event the payment described herein, whenadded to all other amounts or benefits provided to or on behalf of theExecutive in connection with her termination of employment, would result in theimposition of an excise tax under Code Section 4999, such payments shallbe retroactively (if necessary) reduced to the extent necessary to avoid suchexcise tax imposition.  Upon writtennotice to Executive, together with calculations of Corporation’s independentauditors, Executive shall remit to Corporation the amount of the reduction plussuch interest as may be necessary to avoid the imposition of such excisetax.  Notwithstanding the foregoing orany other provision of this contract to the contrary, if any portion of theamount herein payable to the Executive is determined to be non-deductiblepursuant to the regulations promulgated under Section 280G of the InternalRevenue Code of 1986, as amended (the “Code”), the Corporation shall berequired only to pay to Executive the amount determined to be deductible underSection 280G.

 

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(a)                                  As used in this Agreement, “Changein Control” shall mean a change in control of Corporation (other than oneoccurring by reason of an acquisition of the Corporation Bank by Executive) ofa nature that would be required to be reported in response to Item 6(e) ofSchedule 14A of Regulation 14A or any successor rule or regulationpromulgated under the Securities Exchange Act of 1934, as amended (the “1934Act”); provided that, without limiting the foregoing, a Change in Control shallbe deemed to have occurred if:

 

(i)                                     (A) the Corporation shall be mergedor consolidated, or (B) substantially all of the assets of Corporation shall besold, exchanged,  transferred orotherwise disposed of, and, as a result of such merger, consolidation, sale,exchange or transfer, less than a majority of the outstanding voting stock ofthe surviving, resulting, purchasing “person” is owned, immediately after thetransaction, by the holders of voting stock of the Corporation before thetransaction, unless (y) such merger, consolidation, sale, exchange, purchase ortransfer is approved in advance by seventy percent (70%) or more of the membersof the Board of Directors of Corporation who are not interested in thetransaction and (z) a majority of the members of the Board of Directors of thelegal entity resulting from, or existing after, any such transaction, and ofthe Board of Directors of such entity’s parent corporation, if any, are formermembers of the Board of Directors of Corporation, or

 

(ii)                                  any “person” or group of“persons”(as such term is used in Sections 13(d) and 14(d) of the 1934 Act),other than Corporation, Bank or any “person” who on the date hereof is adirector or officer of Corporation and/or Bank is or becomes the “beneficialowner” (as defined in Rule 13d-3 under the 1934 Act or any successor rule orregulation promulgated under the 1934 Act), directly or indirectly, of securitiesof Corporation representing thirty (30%) percent or more of the combined votingpower of Corporation’s then outstanding securities, or

 

(iii)                               during any period of two (2)consecutive years during the term of Executive’s employment under this Agreement,individuals who at the beginning of such period constitute the Board ofDirectors of Corporation cease for any reason to constitute at least a majoritythereof, unless the election of each director who was not a director at thebeginning of such period has been approved in advance by directors representingat least two-thirds of the directors then in office who were directors at thebeginning of the period;

 

provided, however, thatno Change in Control shall be deemed to have occurred if an agreement ofmerger, acquisition or consolidation is executed, but the merger, acquisitionor consolidation is never completed.

 

(b)                                 Executive shall not be required tomitigate the amount of any payment provided for in this Section 11 byseeking other employment or otherwise.

 

12.                                 **Date of Change in Control****.** For purposes of this Agreement, the “Date of Change of Control” shallmean:

 

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(a)                                  the first date on which a singleperson and/or entity, or group of affiliated persons and/or entities, acquirethe beneficial ownership of thirty (30%) percent or more of the Corporation’svoting securities; or

 

(b)                                 the date of the closing of anAgreement, transferring all or substantially all of the Corporation’s assets;or

 

(c)                                  the date on which a merger,consolidation or business combination is consummated, as applicable; or

 

(d)                                       the date on which individuals thatformerly constituted a majority of the Board of Directors of the Corporationunder Section 11(a)(iii) of this Agreement, cease to be a majority.

 

13.                                 **Resignation as Director****. **Executive agrees that in the event that this Agreement or hisemployment under this Agreement is terminated, Executive shall resign as adirector of Corporation, Bank, Services Corporation or any of their affiliatesor subsidiaries, if he is then serving as a director of any such entities.

 

14.                                 **Office Location****.** It is agreed that Corporation may not require Executive to move hisoffice more than twenty-five (25) miles from the location of ServicesCorporation at the time that this Agreement is executed, without Executive’sconsent.  Any such requirement will bedeemed to be a breach of this Agreement.

 

15.                                 **Notices****.** For the purposes of this Agreement, notices and all other communicationsprovided for in this Agreement shall be in writing and shall be deemed to havebeen duly given when delivered or mailed by United States certified mail,return receipt requested, postage prepaid, addressed as follows (or to suchother addresses provided by a party to the other parties in writing):

 
| If to the Executive:             |   | Mr. Gary Cook                      |
|----------------------------------|--------|------------------------------------|
|                             |   | c/o Myles R. Wren,  Esquire        |
|                             |   | 415 Wyoming Avenue                 |
|                             |   | Scranton, PA 18503                 |
|                             |   |                               |
| If to the Services  Corporation: |   | President                          |
|                             |   | Bank Capital Services  Corporation |
|                             |   | 1853 Highway 315                   |
|                             |   | Pittston, Pennsylvania  18640      |
|                             |   |                               |
| If to the Bank:                  |   | Mr. Robert J.  McCormack           |
|                             |   | President & CEO                |
|                             |   | Sun Bank                           |
|                             |   | 2-16 South Market  Street          |
|                             |   | Selinsgrove,  Pennsylvania 17870   |
|                             |   |                               |
| If to the Corporation:           |   | Mr. Robert J.  McCormack           |
|                             |   | President & CEO                |
|                             |   | Sun Bancorp, Inc.                  |
|                             |   | 2-16 South Market  Street          |
|                             |   | Selinsgrove, Pennsylvania  17870   |

 

16.                                 **Waiver****.** No provision of this Agreement may be modified, waived or dischargedunless such waiver, modification or discharge is agreed to in writing and

 

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signed by Executive andan executive officer specifically designated by the Boards of Directors ofCorporation, Bank and Services Corporation. No waiver by either party, at any time, of any breach by the other partyof, or compliance with, any condition or provision of this Agreement to be performedby such other party shall be deemed a waiver of similar or dissimilarprovisions or conditions at the same or at any prior or subsequent time.  Notwithstanding this Section 14, apromotion of Executive in accordance with Section 2 of this Agreementshall not constitute a breach of this Agreement or require an amendment inwriting.

 

17.                                 **Assignment****.** This Agreement shall not be assignable by any party, except byCorporation to any successor in interest to its respective businesses.

 

18.                                 **Entire Agreement****.** This Agreement contains the entire agreement of the parties relating tothe employment of Executive and supersedes any and all agreements, either oralor in writing, between the parties with regard to the employment of Executiveby Corporation.

 

19.                                 **Successors; Binding Agreement****.**

 

(a)                                  Corporation, Bank and ServicesCorporation will require any successor (whether direct or indirect, bypurchase, merger, consolidation, or otherwise) to all or substantially all ofthe businesses and/or assets of Corporation, Bank and Services Corporation toexpressly assume and agree to perform this Agreement in the same manner and tothe same extent that Corporation, Bank and Services Corporation would berequired to perform it if no such succession had taken place.

 

(b)                                 This Agreement shall inure to thebenefit of and be enforceable by Executive’s personal or legal representatives,executors, administrators, heirs, distributees, devisees and legatees.  If Executive should die followingtermination of Executive’s employment without Cause, and any amounts would be payableto Executive under this Agreement if Executive had continued to live, all suchamounts shall be paid in accordance with the terms of this Agreement to

 

Executive’s devisee, legatee, or otherdesignee, or, if there is no such designee, to Executive’s estate.

 

20.                                 **Arbitration****.**  Corporation, Bank, Services Corporation and Executive recognize that inthe event a dispute should arise between them concerning the interpretation orimplementation of this Agreement (except for any enforcement sought with respectto Sections 7, 8, 9, or 10, which may be litigated in court), lengthy andexpensive litigation will not afford a practical resolution of the issueswithin a reasonable period of time. Consequently, each party agrees that all disputes, disagreements andquestions of interpretation concerning this Agreement are to be submitted forresolution, in Philadelphia, Pennsylvania, to the American ArbitrationAssociation (the “Association”) in accordance with the Association’s NationalRules for the Resolution of Employment Disputes or other applicable rules thenin effect (“Rules”).  Corporation orExecutive may initiate an arbitration proceeding at any time by giving noticeto the other in accordance with the Rules. Corporation and Executive may, as a matter or right, mutually agree onthe appointment of a particular arbitrator from the Association’s pool.  The arbitrator shall not be bound by therules 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, absentfraud, duress, incompetence

 

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or gross and obviouserror of fact, shall be final and binding upon the parties and shall beenforceable in courts of proper jurisdiction. Following written notice of a request for arbitration, Corporation,Bank, Services Corporation and Executive shall be entitled to an injunctionrestraining all further proceedings in any pending or subsequently filedlitigation concerning this Agreement, except as otherwise provided herein orany enforcement sought with respect to Sections 7, 8, 9, or 10.

 

21.                                 **Attorney’s Fees and Costs.** If any action at law or in equity is necessary to enforce or interpretthe terms of this Agreement, each party shall bear his or its own attorney’sfees, costs, and expenses incurred in connection with the litigation, unlessmandated by statute.

 

22.                                 **Validity****.** The invalidity or unenforceability of any provision of this Agreementshall not affect the validity or enforceability of any other provision of thisAgreement, which shall remain in full force and effect.

 

23.                                 **Applicable Law****. **This Agreement shall be governed by and construed in accordancewith the domestic, internal laws of the Commonwealth of Pennsylvania, withoutregard to its conflicts of laws principles.

 

24.                                 **Headings****.** The section headings of this Agreement are for convenience only andshall not control or affect the meaning or construction or limit the scope orintent of any of the provisions of this Agreement.

 

 

**[THIS SPACE WAS INTENTIONALLY LEFT BLANK]**

 

 

**IN WITNESS WHEREOF,** the parties have executed thisAgreement as of the date first above written.

 
| ATTEST:              | SUN BANCORP, INC.   |
|----------------------|---------------------|
|                 |                |
| /s/ Sandra J. Miller |                | /s/ Robert J.  McCormahck |   |
|                 | Robert J. McCormack |
|                 | President & CEO |
|                 |                |
| ATTEST:              | SUN BANK            |
|                 |                |
|                 |                |
| /s/ Sandra J. Miller |                | /s/ Robert J.  McCormack |   |
|                 | Robert J. McCormack |
|                      |                     |  |  |  |

 

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|                 | President &CEO                 |
|----------------------|------------------------------------|
|                 |                               |
| ATTEST:              |                               |
|                 |                               |
| /s/ Carol Phillips   |                               | /s/ Gary Cook |   |
|                 | BANK CAPITAL SERVICES  CORPORATION |
|                 | President                          |
|                 |                               |
|                 |                               |
| WITNESS:             | EXECUTIVE                          |
|                 |                               |
|                 |                               |
| /s/ Thomas W. Bixler |                               | /s/ Gary Cook |   |
|                 | Gary Cook                          |
|                      |                                    |  |  |  |

 

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