Exhibit 10.13


 


CHANGE IN CONTROL AGREEMENT


 


THIS
AGREEMENT (“Agreement”) made as of the 3rd day of January, 2007, by and
among Leesport Financial Corp., a
Pennsylvania business corporation (“Leesport”), Leesport
Bank, a Pennsylvania banking institution (the “Bank”), and Christina McDonald, an adult individual (the “Employee”).


 


W I T N E S S E T H:


 


WHEREAS;
the Employee will initially be serving as Executive Vice President of Retail
Banking; and


 


WHEREAS,
Leesport and the Bank consider the continued services of the Employee to be in
the best interest of Leesport, the Bank, their affiliated companies and the
shareholders of Leesport; and


 


WHEREAS,
Leesport and the Bank desire to induce the Employee to remain in the employ of
the Employee’s then employer (whether it be Leesport or any company affiliated
with Leesport (the “Employer”)) on an impartial and objective basis in the
event of a proposed transaction pursuant to which a Change in Control (as
defined in Section 2(c)) will occur, if completed.


 


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


 


1.  Term of
Agreement and Related Matters.


 


(a)  In General.  Except as otherwise provided herein, the term
of this Agreement will be for a period commencing on the date of this Agreement
and ending on December 31, 2010; provided, however, that this Agreement
will automatically be renewed on January 1, 2011 and on January 1 of
each subsequent year (each an “Annual Renewal Date”) for a period of one (1) additional
year from the applicable Annual Renewal Date unless either the Employee or the
Employer gives written notice of nonrenewal of this Agreement to the other at
least ninety (90) days prior to an Annual Renewal Date (in which case this
Agreement will expire on the Annual Renewal Date immediately following such
notice).


 


(b)  Termination for Cause.  Notwithstanding the provisions of Section 1(a),
this Agreement will terminate automatically upon Termination for Cause of the
Employee’s employment by the Employer.  As
used in this Agreement, the term “Termination for Cause” means:


 


(i)  prior to the public announcement of
a transaction involving an actual or potential Change in Control, termination
for any reason; and


 


(ii)  concurrent with or following the
public announcement of a transaction involving an actual or potential Change in
Control, termination following:  (A) except
if attributable to physical or mental illness or injury, the willful failure of
the Employee to materially perform the Employee’s duties, but only after
written demand specifically identifying 


 


1





















 


the
basis for the Employee’s alleged non-performance and the Employee’s continued
failure to perform thereafter, and, if the termination is before the actual occurrence
of a Change in Control, only after a vote of at least two-thirds of Leesport’s
directors then in office; (B) a willful material violation by the Employee
of any applicable code of conduct or similar policy applicable to Employees of
the Employer; (C) the conviction of the Employee of, or plea of nolo contendere to, a felony or a crime of moral turpitude;
or (D) the removal or prohibition of the Employee from being an
institution-affiliated party by a final order of an appropriate federal banking
agency pursuant to Section 8(e) of the Federal Deposit Insurance Act
or any other provision of applicable law.


 


If,
following a public announcement involving an actual or potential Change in
Control , a proposed transaction is terminated without completion, this
Agreement shall thereafter be construed as though no such announcement had ever
been made; provided, however, that the rights associated with any termination
of employment during the interim period shall be determined by reference to subsection (ii) above.


 


Notwithstanding
the preceding provisions of this subsection, prior to the public announcement
of a transaction involving an actual or potential Change in Control, a transfer
of the Employee to a new Employer which is Leesport, the Bank or an affiliate
of either shall not be deemed a Termination for Cause and this Agreement shall
continue in force.


 


If the
Employee’s employment is terminated for Cause, the Employee’s rights under this
Agreement shall cease as of the effective date of such termination.


 


(c)  Voluntary Termination, Retirement, or
Death.  Notwithstanding the
provisions of Section 1(a), this Agreement will terminate automatically
upon the voluntary termination of the Employee’s employment (other than in
accordance with Section 2), the Employee’s retirement on or after age
sixty-five (65) or the Employee’s death. 
In any such event, the Employee’s rights under this Agreement shall
cease as of the effective date of such termination; provided, however, that if
the Employee dies after a Notice of Termination (as defined in Section 2(b))
is delivered by the Employee in accordance with such section, the payments
described in Section 3 will nonetheless be made to the person or persons
determined pursuant to Section 9(b).


 


(d)  Disability.  Notwithstanding the provisions of Section 1(a),
this Agreement will terminate automatically upon the termination of the
Employee’s employment by reason of the Employee’s Disability.  In such event, the Employee’s rights under
this Agreement will cease as of the effective date of such termination;
provided, however, that if the Employee becomes disabled after a Notice of
Termination is delivered by the Employee in accordance with Section 2(b),
the Employee will nonetheless be entitled to receive the payments described in Section 3.  As used in this Agreement, the term “Disability”
means incapacitation, by accident, sickness or otherwise, such that the
Employee is rendered unable to perform the essential duties required of the
Employee by the Employee’s then position with the Employer, notwithstanding
reasonable accommodation, for a period of six (6) consecutive months.


 


2





















 


2.  Termination
Following a Change in Control.


 


(a)  Events Giving Right To Terminate For
Good Reason.  If a public
announcement of a transaction involving an actual or potential Change in
Control occurs and, concurrently therewith or during a period of eighteen (18)
months thereafter, an event constituting Good Reason also occurs with respect
to the Employee, the Employee may terminate the Employee’s employment in
accordance with the provisions of Section 2(b) and, thereupon, will
become entitled to the payments described in Section 3.  As used in this Agreement, the term “Good
Reason” means any of the following events:


 


(i)  the involuntary termination of the
Employee’s employment, other than an involuntary termination permitted in Sections 1(b) and
(d);


 


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


 


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


 


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


 


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


 


(vi)  any material breach of this
Agreement by the Employee’s Employer at the relevant time, coupled with the
failure to cure the same within thirty (30) days after receipt of written
notice of such breach from the Employee.


 


(b)  Notice of Termination.  Upon the occurrence of an event of Good Reason
subject to Section 2(a), the Employee may, within ninety (90) days of the
occurrence of any such event, resign from employment by a notice in writing (“Notice
of Termination”) delivered to Leesport, whereupon the Employee will become
entitled to the payments and benefits described in Section 3.  In the case of a termination described in Section 2(a)(i),
the Employee shall confirm the Employee’s involuntary termination, in writing,
within ninety (90) days of the date of such termination, and such confirmation
will be deemed a Notice of Termination.


 


(c)  Change in Control Defined.  As used in this Agreement, the term “Change
in Control” means any of the following:


 


(i)  any “person” (as such term is used
for purposes of Section 13(d) of the Securities Exchange Act of 1934
(the “Exchange Act”) as in effect on the date hereof), other 


 


3





















 


than
Leesport, a subsidiary of Leesport, or an employee benefit plan of Leesport or
a subsidiary of Leesport (including a related trust), becomes the beneficial
owner (as determined pursuant to Rule 13d-3 under the Exchange Act),
directly or indirectly of securities of Leesport representing more than 24.9%
of (A) the combined voting power of Leesport’s then outstanding stock and
securities or (B) the aggregate number of shares of Leesport’s then
outstanding common stock;


 


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


 


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


 


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


 


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


 


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


 


Notwithstanding
the foregoing, a Change in Control will not be deemed to have occurred if a
person becomes the beneficial owner, directly or indirectly, of stock and
securities representing more than 24.9% of the combined voting power of Leesport’s
then outstanding stock and securities or the aggregate number of shares of
Leesport’s then outstanding common stock solely as a result of an acquisition
by Leesport of its stock or securities which, by reducing the number of
securities or stock outstanding, increases the proportionate number of
securities or stock beneficially owned by such person; provided, however, that
if a person becomes the beneficial owner of more than 24.9% of the combined
voting power of stock and securities or the aggregate number of shares of
common stock by reason of such acquisition and thereafter becomes the
beneficial owner, directly or indirectly, of any additional voting stock or
securities or common stock (other than by reason of a stock split, stock
dividend or similar transaction), then a Change in Control will thereupon be
deemed to have occurred.


 


(d)  Termination of Proposed Change in
Control Transaction.  If, following a
public announcement described in subsection (a), a proposed transaction is
terminated without completion, this Agreement shall thereafter be construed as
though no such announcement had ever been made; provided, however, that the
rights associated with any termination of 


 


4





















 


employment
or the giving of a Notice of Termination during the interim period shall be
determined without regard to this subsection.


 


3.  Rights in the
Event of Certain Terminations Following Change in Control.  In the event the Employee validly and timely
delivers a Notice of Termination to Leesport, the Employee shall be entitled to
receive the following payments and benefits:


 


(a)  Basic Payments.  During the initial three (3) year term
of this agreement, the Employee shall be paid an amount equal to two (2.0)
times the sum of (i) the Employee’s highest annualized base salary paid to
the Employee during the year of termination of employment or the immediately
preceding two (2.0) calendar years and (ii) the highest cash bonus paid to
the Employee in or with respect to the year of termination of employment or the
immediately preceding two (2.0) calendar years. 
Payments under this Section 3(a) shall be made monthly in
twenty-four (24) equal installments (without interest) beginning on the first
day of the month immediately following the month in which the Employee delivers
the Notice of Termination and continuing on the first day of each month
thereafter.


 


For each term thereafter,
the Employee shall be paid an amount equal to one (1.0) times the sum of (i) the
Employee’s highest annualized base salary paid to the Employee during the year
of termination of employment or the immediately preceding two (2.0) calendar
years and (ii) the highest cash bonus paid to the Employee in or with
respect to the year of termination of employment or the immediately preceding
two (2.0) calendar years.  Payments,
under this Section 3(a) shall be made monthly in twenty-four (24)
equal installments (without interest) beginning on the first day of the month
immediately following the month in which the Employee delivers the Notice of
Termination and continuing on the first day of each month thereafter.


 


(b)  Health and Medical Benefits.  For a period of one (1.0) year from the date
of termination of employment, the Employee shall be provided, at no charge, with
a continuation of health and medical benefits no less favorable than the health
and medical benefits in effect on the date of termination of the Employee’s
employment.  To the extent such benefits
cannot be provided under a plan because the Employee is no longer an employee
of the Employer, a dollar amount equal to the after-tax cost (estimated in good
faith by Leesport) of obtaining such benefits, or substantially similar
benefits, shall be paid to the Employee periodically, as appropriate.


 


(c)  Excise Tax Matters.  Notwithstanding anything in this Section or
elsewhere in this Agreement to the contrary, in the event the payments and
benefits payable hereunder to or on behalf of the Employee, when added to all
other amounts and benefits payable to or on behalf-of the Employee, would
result in the imposition of an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, the amounts and benefits payable
hereunder shall be reduced to such extent as may be necessary to avoid such
imposition.  The Employee shall have the
right, within thirty (30) days of receipt of written notice from Leesport, to
specify which amounts and benefits shall be reduced to satisfy the requirements
of this subsection.  All calculations
required to be made under this subsection will be made by Leesport’s
independent public accountants, subject to the right of the Employee’s
representative to review the same.  The
parties recognize that the actual implementation of the provisions of this subsection are
complex 


 


5





















 


and
agree to deal with each other in good faith to resolve any questions or
disagreements arising hereunder.


 


(d)  Primary Obligor.  The obligation to make payments and provide
benefits under this Section shall primarily be those of the Employee’s
Employer as of the date of the Employee’s termination of employment.  In the event the Employer is not Leesport or
the Bank, Leesport will cause such Employer to make required payments and
provide required benefits.  To the extent
Leesport fails or is unable to do so, it shall make such payments and provide
such benefits.


 


4.  Legal Expenses.  Leesport will pay (or cause to be paid) to
the Employee all reasonable legal fees and expenses when incurred by the
Employee in seeking to obtain or enforce any right or benefit provided by this
Agreement, provided the Employee acts in good faith with respect to issues
raised.


 


5.  Notices.  Any notice required or permitted to be given
under this Agreement will, to be effective hereunder, be given to Leesport, in
the case of notices given by the Employee, and will, to be effective hereunder,
be given by Leesport, in the case of notices given to the Employee.  Any such notice will be deemed properly given
if in writing and if mailed by registered or certified mail, postage prepaid
with return receipt requested, to the last known residence address of the
Employee, in the case of notices to the Employee, and to the principal office
of Leesport, in the case of notices to Leesport.


 


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


 


7.  Assignment.  This Agreement is not assignable by any party
hereto, except by Leesport and the Bank to any successor in interest to the
respective businesses of Leesport and the Bank.


 


8.  Entire
Agreement.  This
Agreement contains the entire agreement of the parties relating to the subject
matter hereof and, in accordance with the provisions of Section 18,
supersedes any prior agreement of the parties.


 


9.  Successors;
Binding Effect.


 


(a)  Successors.  Leesport will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of Leesport and/or the Bank to
expressly assume and agree to perform this Agreement (or cause it to be
performed) in the same manner and to the same extent that Leesport, the Bank or
any affiliated company of either would be required to perform it if no such
succession had taken place.  Failure by
Leesport to obtain such assumption and agreement prior to the effectiveness of 


 


6





















 


any
such succession shall constitute a material breach of this Agreement under Section 2(a)(vi).  As used in this Agreement, “Leesport” and the
“Bank” mean Leesport and the Bank as hereinbefore defined and any successor to
the business and/or assets of Leesport and/or the Bank as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.


 


(b)  Binding Effect.  This Agreement shall inure to the benefit of
and be enforceable by the Employee’s personal or legal representatives,
executors, administrators, heirs, distributees, devisees, and legatees.  If the Employee should die while any amount
is payable to the Employee under this Agreement if the Employee had continued
to live, all such amounts, unless otherwise provided herein, will be paid in
accordance with the terms of this Agreement to the Employee’s surviving spouse
or, if there is no such person, to the Employee’s estate.


 


10.  Continuation of
Certain Provisions.  Any
termination of the Employee’s employment under this Agreement or of this
Agreement will not affect the benefit provisions of Section 3 or 4, which
will, if relevant, survive any such termination and remain in full force and
effect in accordance with their respective terms.


 


11.  Other Rights.  Except as provided in Sections 3(c) and
18, nothing herein shall be construed as limiting, restricting or eliminating
any rights the Employee may have under any plan, contract or arrangement to
which the Employee is a party or in which the Employee is a vested participant;
provided, however, that any termination payments required hereunder will be in
lieu of any severance benefits to which the Employee may be entitled under a
severance plan or arrangement of Leesport, the Bank, an affiliate of either, or
an entity which is the successor of any of them or an affiliate thereof; and
provided further, that if the benefits under any such plan or arrangement may
not legally be eliminated, then the payments hereunder will be correspondingly
reduced in such equitable manner as the Board of Directors of Leesport may
determine.


 


12.  No Mitigation
or Offset.  The
Employee shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking employment or otherwise; nor shall
any amounts or benefits payable or provided hereunder be reduced in the event
the Employee does secure employment.


 


13.  Validity.  The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect.


 


14.  Applicable Law.  Except to the extent preempted by federal law,
this Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania without regard to its conflicts of law
principles.


 


15.  Number.  Words used herein in the singular shall be
construed as being used in the plural, as the context requires, and vice versa.


 


7





















 


16.  Headings.  The headings of the sections and subsections
of this Agreement are for convenience only and shall not control or affect the
meaning or construction or limit the scope or intent of any of the provisions
of this Agreement.


 


17.  References to
Entities.  All
references to Leesport shall be deemed to include references to the Bank, or
any affiliate of either, as appropriate in the relevant context, and vice
versa; provided, however, that this Section shall not be construed in a
manner that results in a determination that a transaction constitutes a Change
in Control unless such transaction is literally described in the definition of
such term.


 


18.  Effective Date:
 Termination of Prior Agreements.  This Agreement shall become effective
immediately upon the execution and delivery of the same by the parties hereto.  Upon the execution and delivery of this
Agreement, any prior agreement relating to the subject matter hereof will be
deemed automatically terminated and be of no further force or effect.


 


19.  Withholding For
Taxes.  All amounts and benefits paid
or provided hereunder shall be subject to withholding for taxes as required by
law.


 


20.  Nonsolicitation
of Employees and Customers.  During the period of time that any payments
and benefits are to be provided to Employee under Section 3, the Employee
shall refrain from directly or indirectly soliciting for employment or business
relationship purposes pertaining to the financial services business of Leesport
or the Bank employees or customers of Leesport, the Bank or any affiliate of
either or any successor to either as of the date of the Employee’s termination
of employment.  In the event of a breach
of this section, the Employee’s right to payments and benefits under Sections 3
and 4 shall immediately terminate.  Leesport
or any successor shall be entitled to recover any payments or benefits made
following the commencement of the prohibited conduct, but before discovery of
the same, and may commence an action in any court of competent jurisdiction for
such additional legal and equitable relief as it may deem necessary or
appropriate to recover damages incurred by reason of such conduct and to preclude
continued violation of this section.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement, or caused it to be
executed, as of the date first above written.


 


	
   

  	
  LEESPORT
  FINANCIAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D.
  Davis

  
	
   

  	
   

  	
  Robert D. Davis

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Jenette L.
  Eck

  	
   (SEAL)

  
	
   

  	
   

  	
  Corporate
  Secretary

  
							



 


8

















 


	
   

  	
  LEESPORT
  BANK

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D.
  Davis

  
	
   

  	
  Robert D. Davis

  	
   

  
	
   

  	
  President and
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Jenette L.
  Eck

  	
    (SEAL)

  
	
   

  	
  Corporate
  Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Donna Kowalski

  	
   

  	
  /s/ Christina McDonald

  	
    (SEAL)

  
	
   

  	
       Christina McDonald

  	
   

  
										



 


9