Document:

Exhibit 10.12

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made as of this 23rd day of
December, 2002, between SUN BANCORP, INC.
(“Corporation”), a Pennsylvania business corporation having a place of business
at 2-16 South Market Street, Selinsgrove, Pennsylvania 17870, SUN BANK (“Bank”), a Pennsylvania chartered
banking institution having a place of business at 2-16 South Market Street,
Selinsgrove, Pennsylvania 17870, MID-PENN INSURANCE ASSOCIATES, INC. (“Agency”),
a Pennsylvania business corporation having a place of business at 51 South
Fourth Street, Sunbury, Pennsylvania 17801,  and CHERYL
A. ZELLERS,  (“Executive”), an individual whose
address is R.R. # 3, Box 243 1⁄2, Sunbury, Pennsylvania 17801  (collectively, the “Parties” and,
individually, sometimes a “Party”).

 

 

WHEREAS, Corporation is a registered bank
holding company;

 

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

 

WHEREAS, Agency will be a subsidiary of
Corporation or Bank;

 

WHEREAS, any reference solely to
Corporation in this Agreement shall mean Corporation, Bank or Agency;

 

WHEREAS, Corporation, Bank and Agency desire
to employ Executive to serve in the capacity of Secretary/Treasurer and Vice
President, Personal Lines of Agency under the terms and conditions set forth in
this Agreement; and

 

WHEREAS, Executive desires to accept
employment with Corporation, Bank and Agency under the terms and conditions set
forth in this Agreement.

 

 

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

 

1.                                       Employment.  
Corporation, Bank and Agency hereby employ Executive and Executive
hereby accepts employment with Corporation, Bank or Agency, on the terms and
conditions set forth in this Agreement.

 

2.                                       Duties and Position
of Executive.  Executive shall perform and discharge well
and faithfully such duties as an executive officer of Agency as may be assigned
to Executive from time to time by the Board of Directors of Corporation.  Executive shall be employed as
Secretary/Treasurer and Vice President, Personal Lines of Agency, and shall
hold such other titles as may be given to her from time to time by the Board of
Directors of Corporation.

 

3.                                       Engagement in Other
Employment.  Executive shall devote her full time,
attention and energies to the business of Corporation, Bank and Agency during
the Employment Period (as defined in Section 4(a) of this Agreement);
provided, however, that this Section 3 shall not be construed as
preventing Executive from (a) investing Executive’s personal assets in
enterprises that do not compete with Corporation, Bank and Agency or any of
their subsidiaries or affiliates, (b) being involved in any charitable or civic
activity, or (c) being involved in any other activity with the prior approval
of the Boards of Directors of Corporation, Bank and Agency.  The Executive shall not engage in any
business or commercial activities, duties or pursuits which compete with the
business or commercial activities of Corporation, Bank, Agency or any of their
subsidiaries or affiliates, nor may the Executive serve as a director or

 

 

officer or in any other
capacity in a company which competes with Corporation, Bank, Agency 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 “Employment
Period”) beginning on the date first mentioned above, and if not previously
terminated pursuant to the terms of this Agreement, the Employment Period shall
end three (3) years later.

 

(b)                                 Cause. 
Notwithstanding the provisions of Section 4(a) of this Agreement,
this Agreement shall terminate automatically for Cause (as defined herein) upon
written 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 her 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 her 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;

  
	
   

  	
   

  
	
  (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, Bank and Agency;

  
	
   

  	
   

  
	
  (xiv)

  	
  direction or
  recommendation of a state or federal bank regulatory authority to remove the
  Executive from her 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 Agency
  and approved in writing by the Boards of Directors of Corporation, Bank and
  Agency 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
Agency’s compensation and employment obligations under this Agreement shall
terminate.

 

(c)                                  Notwithstanding the provisions of
Section 4(a) of this Agreement, all of Corporation, Bank and Agency’s
obligations under this Agreement shall terminate automatically upon 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 unable
to perform all of the essential job functions of her position on a full time
basis, taking into account any reasonable accommodation required by law, and
without posing a direct threat to herself and others, for a period up to one
hundred eighty (180) days, all obligations of Corporation, Bank and Agency to
pay Executive the compensation as set forth in this Agreement are
suspended.  Any paid time off, sick
leave, or short term disability pay Executive may be entitled to receive,
pursuant to an established disability plan or program of the Agency, Bank
and/or Corporation, if any exists, shall be considered part of the compensation
Executive shall receive while disabled, and shall not be in addition to the compensation
received by Executive under this provision of the Agreement.  Executive further agrees that should she
remain unable to perform all of the essential functions of her position on a
full time basis, taking into account any reasonable accommodation required by
law, and without posing a direct threat to herself or others, after one hundred
eighty (180) days, the Agency, Bank and Corporation will suffer an undue
hardship by continuing Executive in her position.  Upon this event, all compensation and employment obligations of
the Agency, Bank and Corporation under this Agreement shall cease (except

 

 

Executive’s rights under
the Corporation’s then existing short term and/or long term disability plans,
if any), and this Agreement shall terminate.

 

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

 

5.                                       Employment Period Compensation.

 

(a)                                  Annual Base Salary. 
For services performed by Executive under this Agreement, Corporation
shall pay Executive an Annual Base Salary in the aggregate during the
Employment Period at the rate of Fifty-Two Thousand Dollars ($52,000.00) per year,
payable at the same times as salaries are payable to other executive employees
of Corporation.  Corporation may, from
time to time, increase Executive’s Annual Base Salary, and any and all such
increases shall be deemed to constitute amendments to this Section 5(a) to
reflect the increased amounts, effective as of the date established for such
increases by the Board of Directors of Corporation or any committee of such
Board in the resolutions authorizing such increases.

 

(b)                                 Bonus. 
Executive may be eligible for incentive compensation under the terms and
conditions of any incentive compensation plan that Corporation may have in
effect from time to time or as determined by Corporation in its sole
discretion.

 

(c)                                  Vacations. 
During the term of this Agreement, Executive shall be entitled to a
total of five (5) weeks of paid annual vacation and sick leave, in accordance
with the policies as established from time to time by the Board of Directors of
Corporation, Bank and Agency.  However,
Executive shall not be entitled to receive any additional compensation from
Corporation for failure to take a vacation, nor shall Executive be able to
accumulate unused vacation time from one year to the next, except to the extent
authorized by the Board of Directors of Corporation.

 

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

 

(e)                                  Business Expenses. 
During the term of this Agreement, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by her, which
expenses are properly accounted for, in accordance with the policies and
procedures established by the Board of Directors of Corporation for its
executive officers.

 

(f)                                    Automobile. 
During the term of this Agreement, Executive shall be provided with use
of an automobile, no more than three (3) years old and with a value of $30,000
- $35,000.  All maintenance, including
gas, repairs and registration of said vehicle, will be the responsibility of
Corporation.  The Executive’s family, in
addition to Executive, shall be permitted to use the automobile provided under
this Agreement for personal use.  The
Executive will be responsible for recording and reporting mileage for personal
use for tax purposes.

 

 

6.                                       Rights in Event of
Termination of Employment.

 

(a)                                  In the event that Executive’s
employment is involuntarily terminated by Corporation without Cause, Corporation
shall pay Executive an amount equal to one (1) times the average of the
Executive’s annual compensation (base salary and cash incentive compensation)
for the three (3) previous calendar years or the period of time that Executive
was employed under this Agreement, whichever is less, which amount shall be
payable in twelve (12) equal monthly installments.  In addition, Executive shall be entitled to a continuation of
health, accident, life and disability insurance benefits for twelve (12) months
or until Executive secures substantially similar benefits through other
employment, whichever shall first occur. 
However, if the payment described herein, when added to all other
amounts or benefits provided to or on behalf of the Executive in connection
with her termination of employment, would result in the imposition of an excise
tax under Code Section 4999, such payments shall be retroactively (if
necessary) reduced to the extent necessary to avoid such imposition.  Upon written notice to Executive, together with
calculations of Corporation’s independent auditors, Executive shall remit to
Corporation the amount of the reduction plus such interest as may be necessary
to avoid the imposition of such excise tax. 
Notwithstanding the foregoing or any other provision of this contract to
the contrary, if any portion of the amount herein payable to the Executive is
determined to be non-deductible pursuant to the regulations promulgated under
Section 280G of the Code, then Corporation shall be required only to pay
to Executive the amount determined to be deductible under Section 280G.

 

(b)                                 The amounts payable pursuant to this
Section 6 shall constitute Executive’s sole and exclusive remedy in the
event of involuntary termination, without cause, of Executive’s employment by
Corporation.

 

(c)                                  In the event that Executive
voluntarily terminates her employment all of Executive’s rights under this
Agreement shall cease as of the effective date of termination and all of
Corporation, Bank and Agency’s compensation and employment obligations under
this Agreement shall terminate.

 

7.                                       Restrictive
Covenant.

 

(a)                                  Executive hereby acknowledges and
recognizes the highly competitive nature of the business of Corporation, Bank
and Agency and, accordingly, agrees that, beginning on the date first mentioned
above and continuing until the third anniversary date of the effective date of
termination of Executive’s employment with Corporation, Bank and Agency,
Executive shall not:

 

(i)                                     except for Corporation, Bank, Agency
or their subsidiaries or affiliates, be engaged, directly or indirectly, either
for her own account or as agent, consultant, employee, partner, officer,
director, proprietor, investor (except as an investor owning less than 5% of
the stock of a publicly owned company) or otherwise of any person, firm,
corporation or enterprise engaged in (1) the insurance banking or financial
services industry (including bank holding company), or (2) any other activity
in which Corporation, Bank, Agency or any of their subsidiaries or affiliates are
engaged during the Employment Period, in any county in which, at any time
during the Employment Period or on the date of termination of the Executive’s
employment, a branch, office or other facility of Corporation, Bank, Agency or
any of their subsidiaries or affiliates is located (the “Non-Competition
Area”); or

 

 

(ii)                                  provide financial or other
assistance to any person, firm, corporation, or enterprise engaged in (1) the
insurance, banking or financial services industry (including bank holding company),
or (2) any other activity in which Corporation, Bank, Agency or any of their
subsidiaries or affiliates are engaged during 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 a
customer or referral source of Corporation, Bank, Agency or any of their
subsidiaries or affiliates, during the term of Executive’s employment or on the
date of termination of Executive’s employment to be a customer or referral
source of any person or entity other than Corporation, Bank, Agency or their
subsidiaries or affiliates; or

 

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

 

(b)                                 It is expressly understood and
agreed that, although Executive, Corporation, Bank and Agency consider the
restrictions contained in Section 7(a) reasonable for the purpose of
preserving for Corporation, Bank, Agency and their subsidiaries or affiliates,
their good will and other proprietary rights, if a final judicial determination
is made, by a court or arbitration panel having jurisdiction, that the time or territory
or any other restriction contained in Section 7(a) is an unreasonable or
otherwise unenforceable restriction against Executive, the provisions of
Section 7(a) shall not be rendered void, but shall be deemed amended to
apply as to such maximum time and territory and to such other extent as such
court may judicially determine or indicate to be reasonable.

 

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

 

9.                                       Work Made for Hire. 
Any work performed by the 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 for the express benefit of Corporation,

 

 

Bank, Agency and their
subsidiaries and affiliates.  In the
event it should be established that such work does not qualify as a Work Made
for Hire, the Executive agrees to and does hereby assign to Corporation, Bank,
Agency and their affiliates and subsidiaries, all of her rights, title, and/or
interest in such work product, including, but not limited to, all copyrights,
patents, trademarks, and proprietary rights. 
Executive further agrees that any business that she generates, produces
or sells during her employment is the exclusive business of Corporation, Bank
and Agency and Executive has no individual rights to or ownership of such
business.

 

10.                                 Return of Company
Property and Documents.  The Executive agrees that, at the time of
termination of her employment, regardless of the reason for termination, he
will deliver to Corporation, Bank, Agency and their subsidiaries and
affiliates, any and all company property, including, but not 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 or property, or
reproductions of any of the aforementioned items developed or obtained by the
Executive during the course of her employment.

 

11.                                 Resignation as
Director.  Executive agrees that in the event
that this Agreement or her employment under this Agreement is terminated,
Executive shall resign as a director of Corporation, Bank, Agency or any of
their affiliates or subsidiaries, if she is then serving as a director of any
such entities.

 

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

 

	
  If to the Executive:

  	
   

  	
  Ms. Cheryl A. Zellers

  
	
   

  	
   

  	
  R.R. #3, Box 243 1⁄2

  
	
   

  	
   

  	
  Sunbury, Pennsylvania
  17801

  

 

 

	
  If to the Agency:

  	
   

  	
  Board of Directors

  
	
   

  	
   

  	
  Mid-Penn Insurance
  Associates, Inc.

  
	
   

  	
   

  	
  51 South Fourth Street

  
	
   

  	
   

  	
  Sunbury, Pennsylvania
  17801

  
	
   

  	
   

  	
   

  
	
  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

  

 

13.                                 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 Executive and an executive officer specifically designated by the
Board of Directors of Corporation, Bank and Agency.  No waiver by either party, at any time, of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  Notwithstanding this
Section 13, a promotion of Executive in accordance with Section 2 of
this Agreement shall not constitute a breach of this Agreement or require an
amendment in writing.

 

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

 

15.                                 Entire Agreement. 
This Agreement contains the entire agreement of the parties relating to
the employment of Executive and supersedes any and all agreements, either oral
or in writing, between the parties with regard to the employment of Executive
by Corporation.

 

16.                                 Successors; Binding Agreement.

 

(a)                                  Corporation, Bank and Agency will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the businesses
and/or assets of Corporation, Bank and Agency to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
Corporation, Bank and Agency would be required to perform it if no such
succession had taken place.

 

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

 

17.                                 Arbitration.  
Corporation, Bank, Agency and Executive recognize that in the event a
dispute should arise between them concerning the interpretation or
implementation of this Agreement (except for any enforcement sought with respect
to Sections 7, 8, 9, or 10, which may be litigated in court), lengthy and
expensive litigation will not afford a practical resolution of the issues
within a reasonable period of time. 
Consequently, each party agrees that all

 

 

disputes, disagreements
and questions of interpretation concerning this Agreement are to be submitted
for resolution, in Philadelphia, Pennsylvania, to the American Arbitration
Association (the “Association”) in accordance with the Association’s National
Rules for the Resolution of Employment Disputes or other applicable rules then
in effect (“Rules”).  Corporation or
Executive may initiate an arbitration proceeding at any time by giving notice
to the other in accordance with the Rules. 
Corporation and Executive may, as a matter or right, mutually agree on
the appointment of a particular arbitrator from the Association’s pool.  The arbitrator shall not be bound by the
rules of evidence and procedure of the courts of the Commonwealth of
Pennsylvania, but shall be bound by the substantive law applicable to this
Agreement.  The decision of the
arbitrator, absent fraud, duress, incompetence or gross and obvious error of
fact, shall be final and binding upon the parties and shall be enforceable in
courts of proper jurisdiction. 
Following written notice of a request for arbitration, Corporation,
Bank, Agency and Executive shall be entitled to an injunction restraining all
further proceedings in any pending or subsequently filed litigation concerning
this Agreement, except as otherwise provided herein or any enforcement sought
with respect to Sections 7, 8, 9, or 10.

 

18.                                 Attorney’s Fees and
Costs.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, each party shall
bear her or its own attorney’s fees, costs, and expenses incurred in connection
with the litigation, unless mandated by statute.

 

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

 

20.                                 Applicable Law.  This Agreement shall be governed by and construed in accordance
with the domestic, internal laws of the Commonwealth of Pennsylvania, without
regard to its conflicts of laws principles.

 

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

 

 

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

 

	
  ATTEST:

  	
  SUN BANCORP, INC.

  
	
   

  	
   

  
	
  /s/ Thomas W. Bixler

  	
   

  	
  /s/ Robert J.
  McCormack

  	
   

  
	 
	Robert J. McCormack

	
   

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  SUN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas W. Bixler

  	
   

  	
  /s/ Robert J.
  McCormack

  	
   

  
	
   

  	
  Robert J. McCormack

  
	
   

  	
  President & CEO

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/ Cheryl A. Zellers

  	
   

  	
  /s/ Daniel R. Geise

  	
   

  
	
   

  	
  MID-PENN INSURANCE

  
	
   

  	
  ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
  Daniel R. Geise

  	
  (print name)

  
	
   

  	
  President

  	
  (print title)

  
	
   

  	
   

  
	
  WITNESS:

  	
  EXECUTIVE

  
	
   

  	
   

  
	
  /s/ Cheryl A. Zellers

  	
   

  	
  /s/ Cheryl A. Zellers

  	
   

  
	
   

  	
  Cheryl A. ZellersExhibit 10.13

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made as of this 23rd day of
December, 2002, between SUN BANCORP, INC.
(“Corporation”), a Pennsylvania business corporation having a place of business
at 2-16 South Market Street, Selinsgrove, Pennsylvania 17870, SUN BANK (“Bank”), a Pennsylvania chartered
banking institution having a place of business at 2-16 South Market Street,
Selinsgrove, Pennsylvania 17870, MID-PENN INSURANCE ASSOCIATES, INC.
(“Agency”), a Pennsylvania business corporation having a place of business at
51 South Fourth Street, Sunbury, Pennsylvania 17801,  and DANIEL R. GEISE,  (“Executive”), an
individual whose address is R.R. #5, Box 315, Sunbury, Pennsylvania 17801
(collectively, the “Parties” and, individually, sometimes a “Party”).

 

WHEREAS, Corporation is a registered bank
holding company;

 

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

 

WHEREAS, Agency will be a subsidiary of
Corporation or Bank;

 

WHEREAS, any reference solely to Corporation
in this Agreement shall mean Corporation, Bank or Agency;

 

WHEREAS, Corporation, Bank and Agency desire
to employ Executive to serve in the capacity of President and Vice President,
Commercial Lines of Agency under the terms and conditions set forth in this
Agreement; and

 

WHEREAS, Executive desires to accept
employment with Corporation, Bank and Agency under the terms and conditions set
forth in this Agreement.

 

 

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

 

1.                                       Employment.  
Corporation, Bank and Agency hereby employ Executive and Executive
hereby accepts employment with Corporation, Bank or Agency, on the terms and
conditions set forth in this Agreement.

 

2.                                       Duties and Position
of Executive.  Executive shall perform and discharge well
and faithfully such duties as an executive officer of Agency as may be assigned
to Executive from time to time by the Board of Directors of Corporation.  Executive shall be employed as President and
Vice President, Commercial Lines of Agency, and shall hold such other titles as
may be given to him from time to time by the Board of Directors of Corporation.

 

3.                                       Engagement in Other
Employment.  Executive shall devote his full time,
attention and energies to the business of Corporation, Bank and Agency during
the Employment Period (as defined in Section 4(a) of this Agreement);
provided, however, that this Section 3 shall not be construed as
preventing Executive from (a) investing Executive’s personal assets in
enterprises that do not compete with Corporation, Bank and Agency or any of
their subsidiaries or affiliates, (b) being involved in any charitable or civic
activity, or (c) being involved in any other activity with the prior approval
of the Boards of Directors of Corporation, Bank and Agency.  The Executive shall not engage in any
business or commercial activities, duties or pursuits which compete with the
business or commercial activities of Corporation, Bank, Agency or any of their
subsidiaries or affiliates, nor may the Executive serve as a director or
officer or in any other capacity in a company which competes with Corporation,
Bank, Agency or any of their subsidiaries or affiliates.  Notwithstanding any

 

 

other provision of this
Agreement, Executive shall be permitted to form, own and operate an insurance
agency for the sole purpose of marketing and selling property, casualty and
accident insurance products offered by the Brotherhood Mutual Insurance
Company, or any other Church insurance carrier in the event that Agency can no
longer maintain a relationship with Brotherhood Mutual Insurance Company,
consistent with Agency’s past practices, to Churches.  Executive will direct any inquiries for insurance received from
any individuals or entities, other than Churches, to Agency.  For purposes of this Agreement, a “Church”
shall mean an entity that qualifies as an exempt organization organized and
operated exclusively for religions purposes, pursuant to Section 501(c)(3)
of the Internal Revenue Code.

 

4.                                       Term of Agreement.

 

(a)                                  Employment Period. 
This Agreement shall be for a three (3) year period (the “Employment
Period”) beginning on the date first mentioned above, and if not previously
terminated pursuant to the terms of this Agreement, the Employment Period shall
end three (3) years later.

 

(b)                                 Cause. 
Notwithstanding the provisions of Section 4(a) of this Agreement,
this Agreement shall terminate automatically for Cause (as defined herein) upon
written 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;

  
	
   

  	
   

  
	
  (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, Bank and Agency;

  
	
   

  	
   

  
	
  (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 Agency
  and approved in writing by the Boards of Directors of Corporation, Bank and
  Agency 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 Agency’s compensation and employment obligations under this Agreement
shall terminate.

 

(c)                                  Notwithstanding the provisions of
Section 4(a) of this Agreement, all of Corporation, Bank and Agency’s
obligations under this Agreement shall terminate automatically upon 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 unable
to perform all of the essential job functions of his position on a full time
basis, taking into account any reasonable accommodation required by law, and
without posing a direct threat to himself and others, for a period up to one
hundred eighty (180) days, all obligations of Corporation, Bank and Agency to
pay Executive the compensation as set forth in this Agreement are
suspended.  Any paid time off, sick
leave, or short term disability pay Executive may be entitled to receive,
pursuant to an established disability plan or program of the Agency, Bank
and/or Corporation, if any exists, shall be considered part of the compensation
Executive shall receive while disabled, and shall not

 

 

be in addition to the
compensation received by Executive under this provision of the Agreement.  Executive further agrees that should he
remain unable to perform all of the essential functions of his position on a full
time basis, taking into account any reasonable accommodation required by law,
and without posing a direct threat to himself or others, after one hundred
eighty (180) days, the Agency, Bank and Corporation will suffer an undue
hardship by continuing Executive in his position.  Upon this event, all compensation and employment obligations of
the Agency, Bank and Corporation under this Agreement shall cease (except
Executive’s rights under the Corporation’s then existing short term and/or long
term disability plans, if any), and this Agreement shall terminate.

 

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

 

5.                                       Employment Period
Compensation.

 

(a)                                  Annual Base Salary. 
For services performed by Executive under this Agreement, Corporation
shall pay Executive an Annual Base Salary in the aggregate during the
Employment Period at the rate of Ninety-Five Thousand Dollars ($95,000.00) per
year, payable at the same times as salaries are payable to other executive
employees of Corporation.  Corporation
may, from time to time, increase Executive’s Annual Base Salary, and any and
all such increases shall be deemed to constitute amendments to this
Section 5(a) to reflect the increased amounts, effective as of the date
established for such increases by the Board of Directors of Corporation or any
committee of such Board in the resolutions authorizing such increases.

 

(b)                                 Bonus. 
Executive may be eligible for incentive compensation under the terms and
conditions of any incentive compensation plan that Corporation may have in
effect from time to time or as determined by Corporation in its sole
discretion.

 

(c)                                  Vacations. 
During the term of this Agreement, Executive shall be entitled to a
total of five (5) weeks paid annual vacation and sick leave, in accordance with
the policies as established from time to time by the Board of Directors of
Corporation, Bank and Agency.  However,
Executive shall not be entitled to receive any additional compensation from
Corporation for failure to take a vacation, nor shall Executive be able to
accumulate unused vacation time from one year to the next, except to the extent
authorized by the Board of Directors of Corporation.

 

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

 

(e)                                  Business Expenses. 
During the term of this Agreement, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by him, which
expenses are properly accounted for, in accordance with the policies and
procedures established by the Board of Directors of Corporation for its
executive officers.

 

 

(f)                                    Automobile. 
During the term of this Agreement, Executive shall be provided with use
of an automobile, no more than three (3) years old and with a value of $30,000
- $35,000.  All maintenance, including
gas, repairs and registration of said vehicle, will be the responsibility of
Corporation.  The Executive’s family, in
addition to Executive, shall be permitted to use the automobile provided under
this Agreement for personal use. The Executive will be responsible for
recording and reporting mileage for personal use for tax purposes.

 

6.                                       Rights in Event of
Termination of Employment.

 

(a)                                  In the event that Executive’s
employment is involuntarily terminated by Corporation without Cause,
Corporation shall pay Executive an amount equal to one (1) times the average of
the Executive’s annual compensation (base salary and cash incentive
compensation) for the three (3) previous calendar years or the period of time that
Executive was employed under this Agreement, whichever is less, which amount
shall be payable in twelve (12) equal monthly installments.  In addition, Executive shall be entitled to
a continuation of health, accident, life and disability insurance benefits for
twelve (12) months or until Executive secures substantially similar benefits
through other employment, whichever shall first occur.  However, if the payment described herein,
when added to all other amounts or benefits provided to or on behalf of the
Executive in connection with his termination of employment, would result in the
imposition of an excise tax under Code Section 4999, such payments shall
be retroactively (if necessary) reduced to the extent necessary to avoid such
imposition.  Upon written notice to
Executive, together with calculations of Corporation’s independent auditors,
Executive shall remit to Corporation the amount of the reduction plus such
interest as may be necessary to avoid the imposition of such excise tax.  Notwithstanding the foregoing or any other
provision of this contract to the contrary, if any portion of the amount herein
payable to the Executive is determined to be non-deductible pursuant to the
regulations promulgated under Section 280G of the Code, then Corporation shall
be required only to pay to Executive the amount determined to be deductible
under Section 280G.

 

(b)                                 The amounts payable pursuant to this
Section 6 shall constitute Executive’s sole and exclusive remedy in the
event of involuntary termination, without cause, of Executive’s employment by
Corporation.

 

(c)                                  In the event that Executive
voluntarily terminates his employment all of Executive’s rights under this
Agreement shall cease as of the effective date of termination and all of
Corporation, Bank and Agency’s compensation and employment obligations under
this Agreement shall terminate.

 

7.                                       Restrictive
Covenant.

 

(a)                                  Executive hereby acknowledges and
recognizes the highly competitive nature of the business of Corporation, Bank
and Agency and, accordingly, agrees that, beginning on the date first mentioned
above and continuing until the third anniversary date of the effective date of
termination of Executive’s employment with Corporation, Bank and Agency,
Executive shall not:

 

(i)                                     except for Corporation, Bank, Agency
or their subsidiaries or affiliates, be engaged, directly or indirectly, either
for his own account or as agent, consultant, employee, partner, officer,
director, proprietor, investor (except as an investor owning less than 5% of
the stock of a publicly owned company) or otherwise of

 

 

any person, firm,
corporation or enterprise engaged in (1) the insurance banking or financial
services industry (including bank holding company), or (2) any other activity
in which Corporation, Bank, Agency or any of their subsidiaries or affiliates
are engaged during the Employment Period, in any county in which, at any time
during the Employment Period or on the date of termination of the Executive’s
employment, a branch, office or other facility of Corporation, Bank, Agency or
any of their subsidiaries or affiliates is located (the “Non-Competition
Area”); or

 

(ii)                                  provide financial or other
assistance to any person, firm, corporation, or enterprise engaged in (1) the
insurance, banking or financial services industry (including bank holding
company), or (2) any other activity in which Corporation, Bank, Agency or any
of their subsidiaries or affiliates are engaged during 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 a
customer or referral source of Corporation, Bank, Agency or any of their
subsidiaries or affiliates, during the term of Executive’s employment or on the
date of termination of Executive’s employment to be a customer or referral
source of any person or entity other than Corporation, Bank, Agency or their
subsidiaries or affiliates; or

 

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

 

(b)                                 It is expressly understood and
agreed that, although Executive, Corporation, Bank and Agency consider the
restrictions contained in Section 7(a) reasonable for the purpose of
preserving for Corporation, Bank, Agency and their subsidiaries or affiliates,
their good will and other proprietary rights, if a final judicial determination
is made, by a court or arbitration panel having jurisdiction, that the time or
territory or any other restriction contained in Section 7(a) is an
unreasonable or otherwise unenforceable restriction against Executive, the
provisions of Section 7(a) shall not be rendered void, but shall be deemed
amended to apply as to such maximum time and territory and to such other extent
as such court may judicially determine or indicate to be reasonable.

 

(c)                                  Notwithstanding any other provision
of this Agreement, Executive shall be permitted to form, own and operate an
insurance agency for the sole purpose of marketing and selling property,
casualty and accident insurance products offered by the Brotherhood Mutual
Insurance Company, or any other Church insurance carrier in the event that
Agency can no longer maintain a relationship with Brotherhood Mutual Insurance
Company, consistent with Agency’s past practices, to Churches.  Executive will direct any inquiries for
insurance received from any individuals or entities, other than Churches, to
Agency.  For purposes of this Agreement,
a “Church” shall mean an entity that qualifies as an exempt organization
organized and operated exclusively for religions purposes, pursuant to
Section 501(c)(3) of the Internal Revenue Code.

 

 

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

 

9.                                       Work Made for Hire. 
Any work performed by the 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 for the express benefit of Corporation, Bank,
Agency and their subsidiaries and affiliates. 
In the event it should be established that such work does not qualify as
a Work Made for Hire, the Executive agrees to and does hereby assign to
Corporation, Bank, Agency and their affiliates and subsidiaries, all of his
rights, title, and/or interest in such work product, including, but not limited
to, all copyrights, patents, trademarks, and proprietary rights.  Executive further agrees that any business
that he generates, produces or sells during his employment is the exclusive
business of Corporation, Bank and Agency and Executive has no individual rights
to or ownership of such business.

 

10.                                 Return of Company
Property and Documents.  The Executive agrees that, at the time of
termination of his employment, regardless of the reason for termination, he
will deliver to Corporation, Bank, Agency and their subsidiaries and
affiliates, any and all company property, including, but not 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 or property, or
reproductions of any of the aforementioned items developed or obtained by the
Executive during the course of his employment.

 

11.                                 Resignation as
Director.  Executive agrees that in the event
that this Agreement or his employment under this Agreement is terminated,
Executive shall resign as a director of Corporation, Bank, Agency or any of
their affiliates or subsidiaries, if he is then serving as a director of any
such entities.

 

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

 

	
  If to the Executive:

  	
   

  	
  Mr. Daniel R. Geise

  
	
   

  	
   

  	
  R.R. #5, Box 315

  
	
   

  	
   

  	
  Sunbury, Pennsylvania
  17801

  

 

 

	
  If to the Agency:

  	
   

  	
  Board of Directors

  
	
   

  	
   

  	
  Mid-Penn Insurance
  Associates, Inc.

  
	
   

  	
   

  	
  51 South Fourth Street

  
	
   

  	
   

  	
  Sunbury, Pennsylvania
  17801

  
	
   

  	
   

  	
   

  
	
  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

  

 

13.                                 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 Executive and an executive officer specifically designated by the
Board of Directors of Corporation, Bank and Agency.  No waiver by either party, at any time, of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  Notwithstanding this
Section 13, a promotion of Executive in accordance with Section 2 of
this Agreement shall not constitute a breach of this Agreement or require an
amendment in writing.

 

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

 

15.                                 Entire Agreement. 
This Agreement contains the entire agreement of the parties relating to
the employment of Executive and supersedes any and all agreements, either oral
or in writing, between the parties with regard to the employment of Executive
by Corporation.

 

16.                                 Successors; Binding
Agreement.

 

(a)                                  Corporation, Bank and Agency will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the businesses
and/or assets of Corporation, Bank and Agency to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
Corporation, Bank and Agency would be required to perform it if no such
succession had taken place.

 

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

 

17.                                 Arbitration.  
Corporation, Bank, Agency and Executive recognize that in the event a
dispute should arise between them concerning the interpretation or implementation
of this Agreement (except for any enforcement sought with respect to Sections
7, 8, 9, or 10, which may be litigated in court), lengthy and expensive
litigation will not afford a practical resolution of the issues within a
reasonable period of time.  Consequently,
each party agrees that all

 

 

disputes, disagreements
and questions of interpretation concerning this Agreement are to be submitted
for resolution, in Philadelphia, Pennsylvania, to the American Arbitration
Association (the “Association”) in accordance with the Association’s National
Rules for the Resolution of Employment Disputes or other applicable rules then
in effect (“Rules”).  Corporation or
Executive may initiate an arbitration proceeding at any time by giving notice
to the other in accordance with the Rules. 
Corporation and Executive may, as a matter or right, mutually agree on
the appointment of a particular arbitrator from the Association’s pool.  The arbitrator shall not be bound by the
rules of evidence and procedure of the courts of the Commonwealth of
Pennsylvania, but shall be bound by the substantive law applicable to this
Agreement.  The decision of the
arbitrator, absent fraud, duress, incompetence or gross and obvious error of
fact, shall be final and binding upon the parties and shall be enforceable in
courts of proper jurisdiction. 
Following written notice of a request for arbitration, Corporation,
Bank, Agency and Executive shall be entitled to an injunction restraining all
further proceedings in any pending or subsequently filed litigation concerning
this Agreement, except as otherwise provided herein or any enforcement sought
with respect to Sections 7, 8, 9, or 10.

 

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

 

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

 

20.                                 Applicable Law.  This Agreement shall be governed by and construed in accordance
with the domestic, internal laws of the Commonwealth of Pennsylvania, without
regard to its conflicts of laws principles.

 

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

 

 

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

 

	
  ATTEST:

  	
  SUN BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas W. Bixler

  	
   

  	
  /s/ Robert J.
  McCormack

  	
   

  
	 
	Robert J. McCormack

	
   

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  SUN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas W. Bixler

  	
   

  	
  /s/ Robert J.
  McCormack

  	
   

  
	
   

  	
  Robert J. McCormack

  
	
   

  	
  President &CEO

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/ Cheryl A. Zellers

  	
   

  	
  /s/ Daniel R. Geise

  	
   

  
	
   

  	
  MID-PENN INSURANCE

  
	
   

  	
  ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
  Daniel R. Geise

  	
  (print name)

  
	
   

  	
  President

  	
  (print title)

  
	
   

  	
   

  
	
  WITNESS:

  	
  EXECUTIVE

  
	
   

  	
   

  
	
  /s/ Cheryl A. Zellers

  	
   

  	
  /s/ Daniel R. Geise

  	
   

  
	
   

  	
  Daniel R. Geise

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