EX-10.12






CHANGE IN CONTROL AGREEMENT




THIS AGREEMENT (“Agreement”) made as of the 19TH day of December 2005, between
Sterling Financial Corporation, a Pennsylvania business corporation (the “Corporation”), Bank of
Lancaster County N.A., a national banking association (the “Bank” and, with the Corporation, the
“Employers”) and MaryAnn Detwiler, an individual (the “Executive”).



WITNESSETH:




WHEREAS, the Executive is serving as an Chief Accounting Officer for the Employers; and



WHEREAS, the Employers consider the continued services of the Executive to be in the best
interest of the Employers and the shareholders of the Corporation; and



WHEREAS, the Employers desire to induce the Executive to remain in the employ of their
Employers on an impartial and objective basis in the event of a transaction pursuant to which a
Change in Control (as defined in Section 2(c)) of the Employers occurs.



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




	 	1.	 	Term of Agreement.






	 	(a)	 	The term of this Agreement shall commence on the date hereof
and terminate on December 31, 2006 unless the Executive’s employment is sooner
terminated as provided herein (as may be extended pursuant to this Agreement,
the “Term”). On each December 31st hereafter, the Term shall
automatically be extended for an additional calendar year unless either party
gives written notice to the other, by no later than the preceding November
30th, that he or she does not concur in such extension. For the
purposes of the preceding sentence, the Employers shall be considered one
party.






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






	 	(i)	 	prior to a Change in Control, termination
for any reason; and






	 	(ii)	 	concurrent with or following a Change in
Control, termination following (A) the Executive’s conviction or plea
of guilty or nolo contendere to a felony, a crime of falsehood, or a
crime involving fraud or moral turpitude, or the actual incarceration
of the Executive for a period of 45 consecutive days, (B) the
Executive’s failure to follow the lawful instructions of the
Employers after receipt of written notice of such instructions from
an appropriate corporate official, other than a failure resulting
from the Executive’s incapacity because of physical or mental
illness, or (C) a government regulatory agency recommends or orders
in writing that the employment of the Executive be so terminated.






If the Executive’s employment is terminated for Cause, his/her rights under this
Agreement will 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 Executive’s employment
(other than in accordance with Section 2), his/her retirement or his/her
death. In any such event, the Executive’s rights under this Agreement will
cease as of the effective date of such termination; provided, however, that if
the Executive dies after a Notice of Termination (as defined in Section 2(b))
is delivered by him/her 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 Executive’s employment by reason of his/her Disability. In such event,
the Executive’s rights under this Agreement will cease as of the effective
date of such termination; provided, however, that if the Executive becomes
disabled after a Notice of Termination is delivered by him/her in accordance
with Section 2(b), he/she 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
Executive is rendered unable to perform the services required of his/her by
him/her then position with the Employers for a period of six consecutive
months.




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	 	2.	 	Termination Following a Change in Control.






	 	(a)	 	Termination For Good Reason After a Change in
Control. If a Change in Control occurs and, in anticipation thereof,
concurrently therewith or thereafter during the Term an event constituting
Good Reason also occurs with respect to the Executive, he/she may terminate
his/her employment in accordance with the provisions of Section 2(b) and,
thereupon, will become entitled to the payments described in Section 3.






	 	(b)	 	Notice of Termination. Upon the occurrence of a
Change in Control and an event of Good Reason, the Executive may, within 90
days of the occurrence of any such event, resign from employment by a notice
in writing (“Notice of Termination”) delivered to the Corporation, whereupon
he/she will become entitled to the payments described in Section 3. In the
case of a termination described in Clause (i) of Section 2(d), the Executive
will confirm his/her involuntary termination, in writing, within 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 in
Sections 13(d) and 14(d) (2) of the Securities and Exchange Act of
1934 (the “Exchange Act”)), other than the Employers, a subsidiary of
the Employers, an employee benefit plan of the Employers or a
subsidiary of the Employers (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 the
Employers representing more than 20% of the combined voting power of
the Employers’ then outstanding securities;






	 	(ii)	 	the occurrence of, or execution of an
agreement providing for, a sale of all or substantially all of the
assets of the Employers to an entity which is not a direct or
indirect subsidiary of the Employers;






	 	(iii)	 	the occurrence of, or execution of an
agreement providing for, a reorganization, merger, consolidation or
similar transaction involving the Employers, unless (A) the
shareholders of the Corporation immediately prior to the consummation
of any such transaction will initially own securities representing a
majority of the voting power of the surviving or resulting
corporation, and (B) the directors of the Employers immediately prior
to the consummation of such transaction will initially represent a
majority of the directors of the surviving or resulting corporation;
or






	 	(iv)	 	any other event which is at any time
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 the Employers.






	 	(d)	 	Good Reason Defined. As used in this Agreement, the
term “Good Reason” means any of the following events:






	 	(i)	 	the involuntary termination of the
Executive, other than an involuntary termination permitted in
Sections 1(b) and (d);






	 	(ii)	 	a reduction in the Executive’s title,
responsibility (including reporting responsibility) or authority as
in effect immediately prior to the Change in Control; provided,
however, that the assignment of the Executive to a position with a
reasonably similar title, responsibility and authority will not
constitute an event of Good Reason if the Executive’s actual or
targeted compensation in such new position is not less than the
Executive’s actual and targeted compensation immediately prior to the
Change in Control;






	 	(iii)	 	the assignment to the Executive of duties
inconsistent with his/her position immediately prior to the Change in
Control, except for an assignment of duties consistent with a
position permitted in Clause (ii);






	 	(iv)	 	a reduction in the Executive’s annual base
salary in effect immediately prior to the Change in Control;






	 	(v)	 	reassignment of the Executive to a
principal office which is more than 30 miles from the Executive’s
principal office in Lancaster, Pennsylvania;






	 	(vi)	 	the failure to provide the Executive with
welfare, pension, incentive compensation, fringe and other benefits
to which he/she was entitled immediately prior to the Change in
Control, unless such failure occurs by reason of a reduction or
change in such benefits for employees generally or similarly situated
executive employees of the corporation which is the acquiring,
resulting or successor corporation in the Change in Control (or an
affiliate thereof); or






	 	(vii)	 	any material breach of this Agreement by
the Employers which is not cured within 30 days after receipt of
written notice of such breach from the Executive.






	 	3.	 	Rights in the Event of Certain Terminations Following Change in
Control. In the event the Executive validly and timely delivers a Notice of
Termination to the Corporation, he/she will be entitled to receive the following
payments and benefits:






	 	(a)	 	Basic Payments.  The Executive will be paid an amount
equal to one times the Base Amount. “Base Amount” shall mean an amount equal
to the average annual compensation payable by the Employers to the Executive
and includable by the Executive in gross income for the most recent five (5)
taxable years, or such shorter period as the Executive shall have been
employed by the Employers, ending before the date on which the Change of
Control occurred. The Executive at his/her election, will be paid the Basic
Payments in either (i) 12 equal monthly installments, or (ii) a lump sum equal
to the present value of the amounts payable under this subsection; commencing
within 30 days after his/her termination of employment. For purposes of the
preceding sentence, present value will be determined by using the short-term
applicable federal rate under Section 1274 of the Internal Revenue Code of
1986, as amended (the “Code”), in effect on the date of termination of
employment. For purposes of this subsection, to the extent necessary, base
salary and bonuses with any predecessor of the Employers or an affiliate
thereof shall be taken into account.






	 	(b)	 	Supplemental Payment in Lieu of Certain Benefits. In
lieu of continued pension, welfare and other benefits, a one-time lump sum
cash payment equaling 25% of the Basic Payments calculated above will be paid
to the Executive within 30 days following the date of termination






	 	(c)	 	Stock Options. Upon a Change in Control, all stock
options theretofore granted to the Executive by the Corporation and not
previously exercisable shall become fully exercisable to the same extent and
in the same manner as if they had become exercisable by passage of time or by
virtue of the Employers achieving certain performance objectives in accordance
with the relevant provisions of any plan and any agreement.






	 	(d)	 	Section 280G. Notwithstanding any other provisions of
this Agreement or any other agreement entered into by the Executive and the
Employers (“Other Agreement”), and notwithstanding any formal or informal plan
or other arrangement heretofore or hereafter adopted by the Company for the
direct or indirect provision of compensation to the Executive (including
groups of participants or beneficiaries of which the Executive is a member),
whether or not such compensation is deferred, is in cash, or is in the form of
a benefit to or for the Executive (a “Benefit Plan”), the Executive shall not
have any right to receive any payment or other benefit under this Agreement,
any Other Agreement, or any Benefit Plan if such payment or benefit, taking
into account all other payments or benefits to or for the Executive under this
Agreement, all Other Agreements, and all Benefit Plans, would cause any
payment to the Executive under this Agreement to be considered a “parachute
payment” within the meaning of Section 280G of the Code as then in effect (a
“Parachute Payment”). In the event that the receipt of any such payment or
benefit under this Agreement, any Other Agreement, or any Benefit Plan would
cause the Executive to be considered to have received a Parachute Payment
under this Agreement, then the Executive shall have the right, in the
Executive’s sole discretion, to designate those payments or benefits under
this Agreement, any Other Agreements and/or any Benefit Plans, which should be
reduced or eliminated so as to avoid having the payment to the Executive under
this Agreement to be deemed to be a Parachute Payment.






	 	4.	 	Attorney’s Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in
addition to any other relief that may be proper; provided, however, that the Executive
shall not be responsible for the Employers’ attorney’s fees and costs if the
Executive’s action is brought in good faith.






	 	5.	 	Notices. Any notice required or permitted to be given under this
Agreement will, to be effective hereunder, be given to the Employers, in the case of
notices given by the Executive, and will, to be effective hereunder, be given by the
Employers, in the case of notices given to the Executive. 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 residence of the Executive, in
the case of notices to the Executive, and to the principal office of the Employers, in
the case of notices to the Employers.






	 	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 Executive and an executive officer of the Employers specifically
designated by the Boards of Directors of the Employers. 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;
the Employers provided, however, that the Employers may assign their rights hereunder,
including, without limitation, the restrictive covenants in Sections 9 and 10, to any
successor in interest to the respective businesses of the Employers.






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






	 	9.	 	Successors; Binding Agreement.






	 	(a)	 	The Employers 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 the Employers 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 the Employers, or any affiliated
company of either would be required to perform it if no such succession had
taken place. Failure by the Employers to obtain such assumption and agreement
prior to the effectiveness of any such succession will constitute a material
breach of this Agreement. As used in this Agreement, the “Employers” means
the Employers as herein before defined and any successor to the business
and/or assets of the Employers as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.






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






	 	10.	 	Continuation of Certain Provisions. Any termination of the
Executive’s employment under this Agreement or of this Agreement shall be subject to
the 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 Section 18, nothing herein will
be construed as limiting, restricting or eliminating any rights the Executive may have
under any plan, contract or arrangement to which he/she is a party or in which he/she
is a vested participant; provided, however, that any termination payments required
hereunder will be in lieu of any severance benefits to which she may be entitled under
a severance plan or arrangement of the Employers or any affiliated company of either;
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 the Employers may determine.






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






	 	13.	 	Validity. The invalidity or unenforceability of any provisions of
this Agreement will 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 will be governed by and construed in accordance with the domestic internal
law of the Commonwealth of Pennsylvania.






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






	 	16.	 	Headings. The headings of the sections and subsections of this
Agreement are for convenience only and will 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 the Employers will be
deemed to include a reference to the Employers and/or the Corporation, individually or
collectively, as appropriate in the relevant context.






	 	18.	 	Effective Date; Termination of Prior Agreement. This Agreement will
become effective immediately upon the execution and delivery of this Agreement 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 will be subject to withholding for taxes as required by law.






	 	20.	 	Individual Agreement. This Agreement is an agreement solely between
and among the parties hereto. It is intended to constitute a nonqualified unfunded
arrangement for the benefit of a key management employee and will be construed and
interpreted in a manner consistent with such intention.






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




Sterling Financial Corporation




By /s/ Kathleen A. Prime

Attest: Jean Svoboda, Corporate Secretary

Executive





 /s/ MaryAnn Detwiler



MaryAnn Detwiler




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