Document:

ex10-4.htm

Exhibit 10.4

 

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

 

AMENDMENT TO

SUPPLY AND DISTRIBUTION AGREEMENT

This Amendment, effective as of June 1, 2011 (the “Effective Date”), modifies the Supply and Distribution Agreement between Heska Corporation (“Heska”) and Boule Medical AB (“Boule”), dated June 17, 2003, hereinafter referred to as “Amendment No. 7”, as modified by Amendment Letter dated June 1, 2004 (hereinafter referred to as “Amendment No. 1”), Amendment Letter dated December 31, 2004 (hereinafter referred to as “Amendment No. 2”), Amendment Letter dated July 12, 2005 (hereinafter referred to as “Amendment No. 3”), Amendment Letter dated March 20, 2007 (hereinafter referred to as “Amendment No. 4”), Amendment Letter dated January 23, 2008 (hereinafter referred to as “Amendment No. 5”) and Amendment to Supply and Distribution Agreement effective as of October 1, 2008 (hereinafter referred to as “Amendment No. 6”), collectively referred to as the “Original Agreement”.

	
1.  

	
Section 1.2.  Section 1.2 “Analyzer”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
1.2 “Analyzer” means the BM800 Veterinary Hematology Analyzer (HemaTrueTM Veterinary Hematology Analyzer) manufactured by Boule or a similar three (3) part veterinary analyzer sold by Boule in the future replacing the BM800 Veterinary Hematology Analyzer.

	
2.  

	
Section 1.10.  A new Section 1.10 “Out-of-Box Failure” consisting of the following is hereby added to the Original Agreement:

	
  

	
1.10 “Out-of-Box Failure” means an Analyzer which is not in compliance with the specifications as set forth in Appendix B the first time an analyzer is under installation by a Heska employee or subdistributor in a clinic if during the Warranty Period defined in Section 6.1(c).

	
3.  

	
Section 1.11.  A new Section 1.11 “Region” consisting of the following is hereby added to the Original Agreement:

	
  

	
1.11 “Region” means Europe (excluding Denmark, Finland, Norway and Sweden), Australia, New Zealand and Brazil.

	
4.  

	
Section 2.1.  Section 2.1 “Distribution Right”, of the Original Agreement is hereby modified by adding the following as the final sentence of Section 2.1:

	
  

	
Boule hereby grants Heska the non-exclusive right to promote, market, sell and distribute Product in the Field and within the Region.

  

1

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

	
5.  

	
Section 2.2.  Section 2.2 “Subdistributors”, of the Original Agreement is hereby modified by adding the following as the final sentence of Section 2.2:

	
  

	
Heska shall have the right to appoint subdistributors to promote, market, sell and distribute Product in the Field and within the Region.

	
6.  

	
Section 2.3.  Section 2.3 “Restrictions”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
2.3 Restrictions.  Without the prior written consent of Boule, Heska undertakes not to manufacture or distribute within the Territory or the Region any products that are similar or identical to or otherwise competing with any of the Products, except that Heska shall have the right to manufacture and/or distribute a five (5) part differential hematology system within the Territory and/or the Region.

	
  

	
Moreover, Heska will refrain without Boule’s prior written consent, to the extent admissible under any mandatory law applicable to this Agreement, from selling, directly or indirectly, any Products to customers outside the Territory, Region and/or the Field or, to the best of Heska’s knowledge, Products otherwise intended for use outside the Territory, Region and/or outside the Field.

	
7.  

	
Section 2.5.  Section 2.5 “New Product Development”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
Boule shall provide timelines acceptable to Heska for the development of [***].  Should Boule fail [***], Heska shall have the right to sell a similar system without the loss of rights to distribute Boule products Heska is then currently distributing, including, without limitation, the rights to distribute Products.

	
8.  

	
Section 3.4.  The first paragraph of Section 3.4 “Delivery and Acceptance”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
3.4 Delivery and Acceptance.  Product shall be delivered F.O.B. Stockholm, Sweden or F.O.B Beijing, China (INCOTERMS 2000), at Boule’s option, and shall otherwise be delivered in accordance with Heska’s instructions and to the location specified by Heska.

	
9.  

	
Section 3.7 “New Products”, of the Original Agreement is hereby modified by adding the following as the final sentence of Section 3.7:

Should the Parties fail to reach such terms within 90 days, Heska shall have the right to sell a similar system without the loss of rights to distribute Boule products Heska is then currently distributing, including, without limitation, the rights to distribute Products according to this Agreement, and Boule shall have the right to distribute such New Product through other distributors within the Territory and Region; provided, however, that Boule shall not offer or enter into any agreement or other arrangement with respect to such New Product with a third party on terms more favorable to such third party than those offered in writing to Heska.

  

2

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

 

	
10.  

	
Section 5.4.  Section 5.4 “Complaints/Recalls”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
5.4 Complaints/Recalls.  Boule will use reasonable efforts to assist Heska in investigating and correcting any problems Heska or its customers may experience with the Product.  Such efforts will include visiting the Territory or Region by Boule’s representatives only where deemed necessary by Boule.  Heska will use reasonable efforts to implement any corrective action deemed necessary by Boule.  Heska further agrees to reasonably cooperate with Boule in any mandatory or voluntary Product recall by assisting in the notification of all affected customers, using materials and documentation that are mutually acceptable to the Parties. The sharing of Heska’s expenses to implement the corrective action shall be negotiated in good faith.

	
11.  

	
Section 5.7.  Section 5.7 “Approvals, Etc.”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
5.7 Approvals, Etc.  Heska shall at its own expense obtain all approvals and other authorizations and file all notices which are required to be obtained or filed for the sale and use of the Product in the Territory or the Region.  Moreover, Heska shall keep Boule currently informed of all laws, rules and regulations applicable in the Territory or the Region directly affecting the sale and use of the Product.  The Parties acknowledge the Products are currently not regulated by any government agency within the Territory or the Region.   Should the Products become regulated during the term of this Agreement, the Parties shall negotiate in good faith terms and conditions for allocating the responsibility and costs for obtaining regulatory approval.

	
12.  

	
Section 6.1.  Part (c) of Section 6.1 “Warranty”, of the Original Agreement is hereby deleted in its entirety and replaced with the following:

	
  

	
(c) the Product conforms to the specifications as set forth in Appendix B and are free from defects in material and workmanship during a fifteen (15) month warranty period under normal use from the date of delivery as per Section 3.4 (“Warranty Period”) for the Analyzers and 12 month minimum expiration dating for reagents.  The warranty covers, at Boule’s exclusive choice, its replacement or repair of the non-conforming or defective Product.  If requested by Boule, Heska shall return to Boule at Boule’s cost and expense the non-conforming or

  

3

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

	
  

	
defective Product.  In order to avail itself of its rights hereunder Heska shall have given Boule notice in writing of the non-conforming or defective Product within the Warranty Period.  Save as stipulated in this paragraph (c) Boule shall not be liable in any respect of any non-conforming or defective Product.

	
13.  

	
Section 6.2 Section 6.2 “Repairs”, of the Original Agreement is hereby deleted is hereby deleted in its entirety and replaced with the following:

	
  

	
6.2  Repairs: The following is applicable for repairs:

 

	
  

	
(a)  

	
Out-Of-Box Failure Repairs. For Out-of-Box Failures, Boule shall reimburse or credit Heska at $[***] USD per hour up to a maximum of [***] hours per Analyzer for time required to repair such non-conforming Analyzer. In addition, Boule shall reimburse Heska for actual shipping expenses incurred to transport such non-conforming Product to Heska’s designated repair facility up to a maximum of $[***] per Analyzer, and Boule shall provide all parts required to perform repair for Product at no cost to Heska.  If requested by Boule, Heska shall return to Boule at Boule’s cost and expense the non-conforming or defective Parts. Heska shall provide Boule an invoice for labor including a copy of the Service Work Order documenting the Out-of-Box Failure repair, and any transportation charges associated with the return of the Product to Heska’s designated service facility.

	
  

	
(b)  

	
Warranty Repairs.  During the Warranty Period, Heska shall at the request of Boule and may at Heska’s choice elect to provide warranty service at Heska's designated facilities for the repair of defective Products.  Boule shall provide all parts required to perform repair for Product under warranty at no cost to Heska. Boule agrees to provide, at Boule's sole expense, one (1) week of service training to Heska's personnel at Heska's facility.  Boule further agrees to provide additional training, as requested by Heska, at a mutually acceptable consulting rate.  Boule will provide an initial pool of five (5) Analyzers to the extent the BM800  Veterinary Hematology Analyzer (HemaTrueTM Veterinary Hematology Analyzer) is replaced by a similar three (3) part veterinary analyzer, to serve as loaners to Heska's customers during warranty service repairs.  The Parties agree that additional Analyzers may be added to the pool of loaner units depending on mean time between failure (MTBF) rates and service turn around times required to perform warranty service repairs.

	
         13.

	
Purchase Minimum. Boule acknowledges Heska has met its minimum purchase obligation for 2008, 2009 and 2010.  The minimum purchase commitment for 2011 shall be [***] Analyzers.

	
  

	 

	
         14.

	
Appendix A4.  Appendix A4 of the Original Agreement is hereby deleted in its entirety and replaced with Appendix A4 attached hereto.

  

4

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

 

	
         15.

	
Appendix A5.  Appendix A5 of the Original Agreement is hereby deleted in its entirety and replaced with Appendix A5 attached hereto.

	
         16.

	
Appendix B. Appendix B of the Original Agreement is hereby deleted in its entirety and replaced with Appendix B attached hereto.

	
         17.

	
Mutual Waiver.  Both parties agree that all invoices issued as of the Effective Date are proper, accurate and complete and neither party deems the other to be in breach of the Original Agreement as of the Effective Date.

	
         18.

	
No Other Changes.  Except as expressly modified by this Amendment No. 7, all other provisions of the Original Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment by their duly authorized representatives.

SIGNED:

Heska Corporation                                                                           Boule Medical AB

By:  /s/ Michael J. McGinley                                                          By:  /s/ Ernst Westman                                                      

Name: Michael J. McGinley                                                           Name: Ernst Westman

Title: President and Chief Operating Officer                               Title: Chief Executive Officer

Date:  June 29, 2011                                                                         Date:   June 23, 2011                                                                

  

5

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

Appendix A4

 

This Appendix forms an integrated part of the Supply and Distributorship Agreement between BOULE and HESKA.

Payment for one hundred percent (100%) of the units of the Products listed below shall be made in Euros.  The initial Euro price for each of such Products shall be the price set forth below, subject to adjustment for actual changes in raw material and labor costs pursuant to the last paragraph of Section 4.1 of the Supply and Distribution Agreement.

 

	
Boule P/N

	
Description

	
Price Net

	
1010464

	
Instrument cover, Heska

	
[***] eur

	
1010849

	
Display Grounding Bar Short

	
[***] eur

	
1010851

	
Display Grounding Bar Long

	
[***] eur

	
1010921_S

	
Start plate VET

	
[***] eur

	
1020144

	
Lid to Cubitainer

	
[***] eur

	
1021136_S

	
Tube holder, Heska

	
[***] eur

	
1030122

	
Flat display cable, shielded

	
[***] eur

	
1030127_S

	
Power cord Main board

	
[***] eur

	
1030128_S

	
Cable blood detector

	
[***] eur

	
1030129_S

	
BB cable, Mixingchamber cable

	
[***] eur

	
1030140_S

	
Cable Coax WBC

	
[***] eur

	
1030142_S

	
Cable, photometer

	
[***] eur

	
1030143_S

	
Ground cable

	
[***] eur

	
1030146

	
Valve cable 5 assy

	
[***] eur

	
1040017_S

	
Contact plate cover ground x10

	
[***] eur

	
1040079

	
Extension spring

	
[***] eur

	
1050159

	
Keyboard folio CBC

	
[***] eur

	
1060046

	
Rubber washer

	
[***] eur

	
1080030

	
Transport Fuse, Tubing

	
[***] eur

	
1080048

	
Door, CBCDiff

	
[***] eur

	
1080055

	
Tube holder

	
[***] eur

	
1080058_S

	
Pinch valve head x10

	
[***] eur

	
1090719_S

	
Switch cable MCI

	
[***] eur

	
1090787_S

	
Cable, Start Micro switch

	
[***] eur

	
1090796_S

	
Switch

	
[***] eur

	
1090836

	
Start plate 1

	
[***] eur

	
1090842

	
Motor assy connected Heska

	
[***] eur

	
1090910_S

	
Tube valve complete

	
[***] eur

	
1090916_S

	
Membrane pump

	
[***] eur

	
1090919_S

	
Level detector complete

	
[***] eur

	
1090921_S

	
WBC measuring chamber complete

	
[***] eur

	
1090922_S

	
Cap. Holder complete RBC

	
[***] eur

	
1090927_S

	
Shear valve complete

	
[***] eur

	
1090928_S

	
Display complete

	
[***] eur

	
1090929_S

	
Display incl. touch BM800

	
[***] eur

	
1090933_S

	
Asp. washing cup complete

	
[***] eur

	
1090941_S

	
Drain cup

	
[***] eur

  

6

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

	
1090945_S

	
RBC measuring chamber complete

	
[***] eur

	
1091002

	
Barcode reader, Medonic

	
[***] eur

	
1091043_S

	
RBC pipette incl. tubes

	
[***] eur

	
1091044_S

	
WBC metering unit incl. tubes

	
[***] eur

	
1091050_S

	
RBC metering unit incl. tubes

	
[***] eur

	
1091061_S

	
WBC pipette incl. tubes

	
[***] eur

	
1091091_S

	
Mixer motor

	
[***] eur

	
1091149

	
Clog Filter Device

	
[***] eur

	
1091152_S

	
Aspiration whole blood

	
[***] eur

	
1091159

	
Level Detector Lyse Vet

	
[***] eur

	
1091160

	
Level Detector Diluent Vet

	
[***] eur

	
1091161_S

	
Liquid filter kpl.

	
[***] eur

	
1091165_S

	
Capillary holder WBC

	
[***] eur

	
1091220

	
Front assy. BM800 Heska

	
[***] eur

	
1091227_S

	
MPA handle assy

	
[***] eur

	
1091232_S

	
MPA assy

	
[***] eur

	
1091234_S

	
CPU board, assy

	
[***] eur

	
1091244_S

	
Valve board BM800 tested

	
[***] eur

	
1091249

	
Bottle tray assy

	
[***] eur

	
1091250_S

	
Level detector yellow assy

	
[***] eur

	
1091251_S

	
Level detector red assy

	
[***] eur

	
1091252_S

	
Level detector blue assy

	
[***] eur

	
1091268_S

	
DC air pump assy.

	
[***] eur

	
1110047

	
Lifting strap

	
[***] eur

	
1120074_S

	
Display board BM800

	
[***] eur

	
1120078_S

	
Switched Powerboard

	
[***] eur

	
1140103

	
Cylindr.isol. C15/15 M4x4 55

	
[***] eur

	
1140111

	
Locking washer

	
[***] eur

	
1140165

	
Locking washer black CCLR2

	
[***] eur

	
1140258

	
Tube PVC 3,0 x 1,5

	
[***] eur

	
1140614

	
Port, Reagent Level Sensor,Red

	
[***] eur

	
1140615

	
Port, Reagent lvl sensor, Ylow

	
[***] eur

	
1140641

	
Clips for door

	
[***] eur

	
1140643_S

	
Transformer BM800

	
[***] eur

	
1140703_S

	
Cable for CAN COM. 0,5m BM800

	
[***] eur

	
1150495_S

	
KNF Liquid Pump

	
[***] eur

	
1150521

	
Repairkit Waste pump KNF

	
[***] eur

	
1200064

	
Back Flush Syringe Kit

	
[***] eur

	
1301077

	
MPA accessories kit

	
[***] eur

	
2604013

	
Case long, complete

	
[***] eur

	
2604014

	
Case short, complete

	
[***] eur

	
2606002

	
Handle complete

	
[***] eur

	
4804014

	
Ind. lower

	
[***] eur

	
5303042

	
Cover plate filter board

	
[***] eur

	
5304002

	
Indicator housing

	
[***] eur

	
5304008

	
Rolled threadball screw

	
[***] eur

	
5304011

	
Guiding rod

	
[***] eur

	
5304015

	
Guiding wheel

	
[***] eur

	
5304026

	
Measuring tube

	
[***] eur

	
5304048

	
Rear valve

	
[***] eur

	
5304075

	
Housing upper glass cyl.

	
[***] eur

 

 

 

7

 

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

 

	
5304077

	
Glass Cylinder

	
[***] eur

	
5304085

	
Lacquer notation

	
[***] eur

	
5304097

	
Detector

	
[***] eur

	
5304116

	
Rear valve part US

	
[***] eur

	
5304167

	
Tube, ground connector

	
[***] eur

	
5304174

	
Gearbox machining

	
[***] eur

	
5306002

	
Capillary Tube Holder, Complete

	
[***] eur

	
5306003

	
Counting cup RBC compete

	
[***] eur

	
5306004

	
Counting cup WBC compete

	
[***] eur

	
5306006

	
Gearbox complete

	
[***] eur

	
5306007

	
Asp. Pipette Whole Blood

	
[***] eur

	
5306008

	
Sealing rod complete

	
[***] eur

	
5306009

	
Sealing piston complete

	
[***] eur

	
5306026_S

	
Mixing cup complete

	
[***] eur

	
5306078

	
MPA mounted

	
[***] eur

	
5306081

	
Motor assy connected

	
[***] eur

	
5306103

	
Waste pump 60Hz mounted

	
[***] eur

	
5308002

	
Detector cable mix cup CBC

	
[***] eur

	
5308004

	
Cable blood detector

	
[***] eur

	
5308005

	
Cable Assy servo potm.

	
[***] eur

	
5308008

	
Photocell, HGB, complete

	
[***] eur

	
5308009_S

	
Cable, coax, RBC, L=420

	
[***] eur

	
5308011

	
Cable Assy Start/Stop

	
[***] eur

	
5308013

	
Cable Assay HGB lamp

	
[***] eur

	
5308014

	
Cable Assy optoswitch/syring

	
[***] eur

	
5309001

	
PCB CPU 530 complete tested

	
[***] eur

	
5309011

	
PCB power mounted tested

	
[***] eur

	
5309021

	
PCB amplifier mounted & tested

	
[***] eur

	
5814036

	
Mixing cup

	
[***] eur

	
5814064

	
Asp. pip. predil. blood / upps

	
[***] eur

	
5814142

	
Valve part f.

	
[***] eur

	
5814143

	
Valve house

	
[***] eur

	
6209001

	
PCB display mounted tested

	
[***] eur

	
9970119

	
Tubing FEP 0.7 x 1.5

	
[***] eur

	
9980001

	
Repair kit for waste pump

	
[***] eur

	
9990455

	
Washer 0734 nylon svart

	
[***] eur

	
9990598

	
Filter VG9 4mm Ø 8

	
[***] eur

	
9990970

	
Pin CP 4*25 A1m6

	
[***] eur

	
9990973

	
Gearbox type F, 4 1/6

	
[***] eur

	
9991148

	
Rod Sealing Guidence Cap

	
[***] eur

	
9991161

	
Plastic cover PVC print Medoni

	
[***] eur

	
9991197

	
Plastic cover PVC 350*430*

	
[***] eur

	
9991619

	
Bi pin lamp with tech.addendum

	
[***] eur

	
N/A

	
Vet Mixing rotor 3 ml (HemaTrue)

	
[***] eur

  

8

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

Appendix A5

 

This Appendix forms an integrated part of the Supply and Distributorship Agreement between BOULE and HESKA.

 

Heska agrees to make orders of the following Products in units divisible by two.  Payment for fifty percent (50%) of the units in each shipment shall be made in Euros and fifty percent (50%) in U.S. dollars.  The Euro price shall be as listed below, subject to adjustment for actual changes in material and labor costs pursuant to the last paragraph of Section 4.1of the Supply and Distribution Agreement.  The U.S. dollar prices shall be as listed below, subject to adjustment for actual changes in material and labor costs pursuant to the last paragraph of Section 4.1of the Supply and Distribution Agreement.

	
Art no

	
Description

	
Price Net Euro

	
Price Net USD

	  	  	  
	
INSTRUMENTS

	  	  
	
1400060

	
HemaTrueTM Veterinary Hematology Analyzer System with MPA

	
[***]

	
[***]

	  	  	  

  

9

  

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

Appendix B

Product Specifications: HemaTrueTM Veterinary Hematology Analyzer

	
Measuring principle RBC, WBC, PLT

	
Impedance

	
Measuring principle HGB

	
Photometer, Cyanide free method 535nm ±5nm

	
Programmable WBC Discriminator

	
Yes

	
Sampling system

	
Closed shear valve

	
Parameters reported

	
RBC, MCV, HCT, PLT, MPV, HGB, MCH, MCHC, WBC, RDW%, RDW abs, LYMPH abs, MONO abs, GRAN abs, LYMPH%, MONO%, GRAN %

	
Size distributions printed for

	
RBC, PLT and WBC diff

	
Aspirated blood volume (open tubes)

	
< 125 μl

	
Blood volume using the Micropipette Adapter (MPA)

	
20 μl

	
LCD

	
Graphical color touch screen, 240 columns x 320 rows

	
Keyboard

	
Virtual incorporated keyboard (External keyboard possible)

	
Analysis time

	
< 1 minute

	
QC capabilities

	
Mean, SD, CV, Levey-Jennings

	
HGB correction on high WBC counts

	
Yes

	
System information messages on parameter abnormalities

	
Yes

	
Floating discriminator RBC/PLT

	
Yes (position printed)

	
Automatic HGB blank on each sample

	
Yes

	
Carry over

	
RBC, HGB, WBC ≤ 1%, PLT ≤ 2%

	
Barcode reader input

	
Yes

	
Serial output

	
Yes (Conformed to standard EN 60950)

	
Power consumption (operational)

	
Max 100 VA

	
Power consumption (standby)

	
Max 20 VA

	
Mains frequency

	
50-60 HZ

	
Mains voltage

	
100-240 VHZ

	
Effective mains current

	
Max. 2 A

	
Certified external mains power supply

	
AML 150PS24 >2556 or FDF 1503-A-24-C14 (51441)

	
Built-in test/adjustment programs

	
Yes

	
Temperature

	
18-32° C (64-90° F)

	
Humidity (non-condensing)

	
Up to 80%

	
Dimensions

	
(HxWxD) 410x290x460 mm (16.1 x 11.4 x 18.1 in)

	
Weight

	
≤ 18 kg (Standard Version) (≤ 40 lb)

  

10ex10_1.htm

EMPLOYMENT AGREEMENT

This Agreement is effective as of August 1, 2011, between Fulton Financial Corporation, a Pennsylvania corporation (“Fulton”), and Craig Roda, an adult individual (the “Executive”).

 

BACKGROUND

 

Executive is currently employed with Fulton.  Fulton and Executive previously entered into an Agreement (“Original Agreement”), which provides for certain payments to Executive upon the occurrence of an employment termination in connection with a change in control of Fulton.   Fulton now desires to enter into a comprehensive Employment Agreement with the Executive (“Agreement”), replacing the Original Agreement, and addressing more broadly the terms and conditions of Executive’s employment, including but not limited to the consequences of an employment termination in connection with a change in control.  The Executive desires to continue in the employment of Fulton, on the terms and conditions contained in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

 

Section 1. Capacity and Duties. 

 

1.1 Employment:  Continuation of Employment. Fulton hereby continues the employment of the Executive, and Executive hereby agrees to continue Executive's employment by Fulton, for the period and upon the terms and conditions hereinafter set forth.

 

1.2 Capacity and Duties.

 

(a) Executive shall serve hereunder initially as a Senior Executive Vice President of Fulton, and thereafter during the term of this Agreement in such other or additional positions as may be assigned by the Board of Directors of Fulton (the “Board”), or by the Chief Executive Officer or another senior executive officer of Fulton acting on behalf of the Board.  Executive shall perform such duties and shall have such authority consistent with Executive's position as may from time to time reasonably be specified by the Board, or by the Chief Executive Officer or another senior executive officer acting on behalf of the Board.  Executive shall report directly to the Chief Executive Officer or another senior executive officer of Fulton and shall perform Executive's duties for Fulton principally at Fulton's headquarters in Lancaster, Pennsylvania, or at such other locations determined by the Board, or by the Chief Executive Officer or another senior executive officer of Fulton acting on behalf of the Board, except for periodic travel that may be necessary or appropriate in connection with the performance of Executive's duties hereunder.  The terms and conditions of this Agreement have been reviewed and approved by the committee of the Board responsible for executive compensation (the “Executive Compensation Committee”), and such Executive Compensation Committee shall review the Agreement on a three year cycle, or

 

  

  

  

(b) more frequently, to assess its continuing appropriateness in light of Fulton's then-current needs.

 

(c) Executive shall devote Executive's full working time, energy, skill and best efforts to the performance of Executive's duties hereunder, in a manner that will faithfully and diligently further the business and interests of Fulton, and shall not be employed by or participate or engage in or be a part of in any manner the management or operation of any business enterprise other than Fulton without the prior written consent of the Board, or the Chief Executive Officer or another senior executive officer of Fulton acting on behalf of Board, which consent may be granted or withheld in Fulton's sole discretion.

 

Section 2. Term of Employment. 

 

2.1 Term.  The term of the Executive's employment under this Agreement (the “Employment Period”) shall commence on the effective date of the Agreement first entered above (the “Effective Date”) and shall continue until the earliest of (a) the voluntary termination of Executive's employment by the Executive other than for Good Reason (as defined in Section 4.2), (b) the termination of the Executive's employment by the Executive for Good Reason, (c) the termination of the Executive's employment by Fulton for any reason other than Cause (as defined in Section 4.3), (d) the termination of the Executive's employment by Fulton for Cause, (e) termination of the Executive's employment with Fulton due to the Disability (as defined in Section 4.4), (f) the termination of Executive's employment with Fulton due to his retirement upon attaining age 65, or (g) the death of the Executive.

 

Section 3. Compensation. 

 

3.1 Basic Compensation.  As compensation for Executive's services hereunder, Fulton shall pay to Executive a salary at an initial annual rate equal to $363,000, payable in periodic installments in accordance with Fulton's regular payroll practices in effect from time to time.  Executive's annual salary, as determined in accordance with this Section 3.1, is hereinafter referred to as Executive's “Base Salary.”  For years subsequent to the initial year of this Agreement, Executive's Base Salary shall be set by Fulton at an amount no less than the initial annual rate set herein.  For each year in the Employment Period, Executive shall be a participant in any bonus or incentive compensation program for executives, including in particular any annual cash bonus plan and equity-based long term incentive plan, that Fulton may implement and administer from time to time during the Employment Period, and the amount and form of such bonus and incentive compensation shall be determined annually by Fulton consistent with its Board's executive compensation practices.  References herein to the amount of the Executive's Base Salary or annual cash bonus or cash incentive compensation shall be to the gross amount of such compensation element, exclusive of any elective compensation deferral agreements entered into by the Executive from time to time.

 

3.2 Employee Benefits.  In addition to the compensation provided for in Section 3.1, Executive shall participate during the Employment Period in those of Fulton's broad-based employee retirement plans, welfare benefit plans, and other benefit programs for which Executive is eligible under the terms of the plan or program, on the same terms and conditions

 

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3.3 that are applicable to employees generally.  Further, Executive shall be eligible during the Employment Period to participate in any Fulton executive-only retirement plan, deferred compensation plan, welfare benefit plan, or other benefit programs, as and to the extent any such benefit programs, plans or arrangements are or may from time to time be in effect during the Employment Period.

 

3.4 Vacation and Leave.  Executive shall be entitled to annual paid vacation, leave of absence and leave for illness or temporary disability in conformity with Fulton's regular policies and practices, and any leave on account of illness or temporary disability shall not constitute a breach by the Executive of Executive's agreements hereunder.

 

3.5 Other Executive Benefits.  Executive shall also receive such other general executive perquisites as approved from time to time by the Executive Compensation Committee such as company paid club memberships and employer-provided automobiles.

 

3.6 Expense Reimbursement.  During the term of Executive's employment, Fulton shall reimburse Executive for all reasonable expenses incurred by Executive in connection with the performance of Executive's duties hereunder in accordance with its regular reimbursement policies as in effect from time to time and upon receipt of itemized vouchers therefor and such other supporting information as Fulton may reasonably require.

 

Section 4. Termination of Employment. 

 

4.1 Voluntary Termination or Age 65 Retirement.  In the event Executive's employment is voluntarily terminated by the Executive other than for Good Reason (as defined in Section 4.2) or terminates due to Executive's retirement upon attaining age 65, Fulton shall be obligated to pay Executive's Base Salary through the effective date of Executive's termination, together with applicable expense reimbursements and all accrued and unpaid benefits and vested benefits in accordance with the applicable employee benefit plans.  Upon making the payments described in this Section 4.1, Fulton shall have no further compensation obligation to Executive hereunder.

 

4.2 Termination for Good Reason:  Termination Without Cause.

 

(a) In the event:

 

(i) Executive's employment is terminated during the term hereof by Executive for “Good Reason” (as defined herein) within two years of the initial existence of the Good Reason condition; or

 

(ii) Executive's employment is terminated during the term hereof by Fulton for any reason other than “Cause” (as defined herein);

 

then Fulton shall continue to pay Executive all of the consideration provided for in the following sentence for twelve (12) months following such termination.  For purposes of the foregoing, the consideration payable under this Section 4.2 shall include the Base Salary (as in effect immediately prior to the termination) and may include an additional cash bonus amount determined in the sole and absolute discretion of Fulton, which discretion shall be exercised by

 

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the Executive Compensation Committee (or its successor) and approved by the Board (all exclusive of any election to defer receipt of compensation the Executive may have made).  During such twelve (12) month period, the Executive shall also continue to be eligible to participate in the employee benefit plans referred to in Section 3.2 to the extent Executive remains eligible under the applicable employee benefit plans and to the extent Executive's eligibility is not contrary to, or does not negate, the tax favored status of the plans or of the benefits payable under the plan.  If Executive is unable to continue to participate in any employee benefit plan or program provided for under this Agreement, Executive shall be compensated in respect of such inability to participate through payment by Fulton to Executive, on an annual basis in advance, of an amount equal to the annual cost that would have been incurred by Fulton if the Executive were able to participate in such plan or program plus an amount which, when added to the Fulton annual cost, would be sufficient after Federal, state and local income and payroll taxes (based on the tax returns filed by the Executive most recently prior to the date of termination) to enable the Executive to net an amount equal to the Fulton annual cost.

 

(b) As used herein, the Executive shall have “Good Reason” to terminate his employment if one of the following conditions (i) through (iii) comes into existence, the Executive provides notice to Fulton of the existence of the condition within 90 days of its initial existence, and Fulton fails to remedy the condition within 30 days of receiving notice of its existence:

 

(i) There has occurred a material breach of Fulton's material obligations under this Agreement;

 

(ii) Fulton, without Executive's prior written consent, changes or attempts to change in any material respect the authority, duties, compensation, benefits or other terms or conditions of Executive's employment in a manner that is adverse to the Executive; or

 

(iii) Fulton requires Executive to be based at a location outside a thirty-five (35) mile radius of the location where Executive previously was based, except for reasonably required travel on Fulton's business.

 

4.3 Termination for Cause.  Executive's employment hereunder shall terminate immediately upon notice of termination for “Cause” (as defined herein), in which event Fulton shall not thereafter be obligated to make any further payments hereunder other than amounts (including salary, expense reimbursement, etc.) accrued under this Agreement as of the date of such termination in accordance with generally accepted accounting principles.  As used herein, “Cause” shall mean the following:

 

(a) Executive shall have committed an act of dishonesty constituting a felony and resulting or intending to result directly or indirectly in gain or personal enrichment at the expense of Fulton;

 

(b) Executive's use of alcohol or other drugs which interferes with the performance by the Executive of Executive's duties;

 

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(c) Executive shall have deliberately and intentionally refused or otherwise failed (for reasons other than incapacity due to accident or physical or mental illness) to perform Executive's duties to Fulton, with such refusal or failure continuing for a period of at least 30 consecutive days following the receipt by Executive of written notice from Fulton setting forth in detail the facts upon which Fulton relies in concluding that Executive has deliberately and intentionally refused or failed to perform such duties; or

 

(d) Executive's conduct that brings public discredit on or injures the reputation of Fulton, in Fulton's reasonable opinion.

 

4.4 Benefits Following Death or Disability.

 

(a) Following Executive's total disability (“Disability”, as defined below) or death during the term of this Agreement, the employment of the Executive will terminate automatically, in which event the Bank shall not thereafter be obligated to make any further payments hereunder other than amounts (including salary, expense reimbursement, etc.) accrued under this Agreement as of the date of such termination in accordance with generally accepted accounting principles or as otherwise specifically provided herein.  For purposes hereof, Disability shall mean that the Executive, by reason of a medically determinable physical or medical impairment that can be expected to result in death or expected to last for a continuous period of at least twelve months, (i) is unable to engage in any substantial gainful activity or (ii) has received income replacement benefits for a period of at least three months under an accident or health plan of Fulton.

 

(b) 

 

(i) In the event of a termination of this Agreement as a result of the Executive's death, the Executive's dependents, beneficiaries and estate, as the case may be, will receive such survivor's income and other benefits as they may be entitled under the terms of the benefit programs, plans, and arrangements described in Section 3.2 which provide benefits upon the death of the Executive.

 

(ii) In the event of a termination of this Agreement as a result of the Executive's Disability, (A) Fulton shall pay the Executive an amount equal to at least six months' Base Salary at the rate and as required by Section 3.1 and in effect immediately prior to the date of Disability, (B) thereafter for as long as Executive continues to be disabled Fulton shall continue to pay an amount equal to at least 60% of Base Salary in effect immediately prior to the date of Disability until the earlier of Executive's death or December 31 of the calendar year in which Executive attains age 65; and (C), to the extent not duplicative of the foregoing, Executive shall receive those benefits customarily provided by Fulton to disabled former employees, which benefits shall include, but shall not be limited to, life, medical, health, accident insurance and a survivor's income benefit.

 

(iii) For the purposes of (i) and (ii) above, the Executive or Executive's dependents shall pay the same percentage of the total cost of coverage under the

 

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applicable employee benefit plans as Executive was paying when Executive's employment terminated. The total cost of the Executive's continued coverage shall be determined using the same rates for health, life and/or disability coverage that apply from time to time to similarly situated active employees.

 

4.5 Death or Disability Following Termination of Employment.  Executive's disability or death following Executive's termination pursuant to Section 4.2 shall not affect Executive's right, or if applicable, the right of Executive's beneficiaries, to receive the payments for the balance of the period described in Section 4.2, nor will it affect the right of Executive or Executive's beneficiaries to receive the balance of payments due under Sections 6 and 7 herein.

 

4.6 Beneficiary Designation.  Executive may, at any time, by written notice to Fulton, name one or more beneficiaries of any benefits which may become payable by Fulton pursuant to this Agreement.  If Executive fails to designate a beneficiary any benefits to be paid pursuant to this Agreement shall be paid to Executive's estate.

 

Section 5. Restrictive Covenants. 

 

5.1 Confidentiality.  Executive acknowledges a duty of confidentiality owed to Fulton and shall not, at any time during or after Executive's employment by Fulton, retain in writing, use, divulge, furnish, or make accessible to anyone, without the express authorization of the Board or senior management of Fulton, any trade secret, private or confidential information or knowledge of Fulton or any of their affiliates obtained or acquired by Executive while so employed.  All computer software, business cards, customer lists, price lists, contract forms, catalogs, books, records, files and know-how acquired while an employee of Fulton are acknowledged to be the property of Fulton (or the applicable affiliate) and shall not be duplicated, removed from Fulton's possession or made use of other than in pursuit of Fulton's business and, upon termination of employment for any reason, Executive shall deliver to Fulton, without further demand, all copies thereof which are then in Executive's possession or under Executive's control.

 

5.2 Non-Competition and Nonsolicitation.  Executive shall not, during the Employment Period and for a period of one (1) year thereafter, directly or indirectly:

 

(a) be or become an officer, director or employee or agent of, or a consultant to or give financial or other assistance to, any person or entity considering engaging in commercial banking, or so engaged, anywhere within the geographic market of Fulton;

 

(b) seek, in competition with the business of Fulton, to procure orders from or do business with any customer of Fulton;

 

(c) solicit or contact any person who is an employee of the Fulton with a view to the engagement or employment of such person by a third party;

 

(d) seek to contract with or engage (in such a way as to adversely affect or interfere with the business of Fulton) any person or entity who has been contracted with or engaged to provide goods or services to Fulton; or

 

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(e) engage in or participate in any effort or act to induce any of the customers, associates, consultants, or employees of Fulton to take any action which might be disadvantageous to Fulton;

 

provided, however, (i) that nothing herein shall prohibit the Executive and Executive's affiliates from owning, as passive investors, in the aggregate not more than 5% of the outstanding publicly traded stock of any corporation so engaged and (ii) in the event the Executive's employment is terminated by the Executive for Good Reason or by Fulton other than for Cause, the covenants in this Section 5.2 shall not apply.

 

For the purpose of Sections 5.1 and 5.2, Fulton shall be deemed to refer to Fulton and all of its present or future affiliates.

 

5.3 Injunctive and Other Relief.

 

(a) Executive acknowledges and agrees that the covenants contained herein are fair and reasonable in light of the consideration paid hereunder, and that damages alone shall not be an adequate remedy for any breach by Executive of Executive's covenants which then apply and accordingly expressly agrees that, in addition to any other remedies which Fulton may have, Fulton shall be entitled to injunctive relief in any court of competent jurisdiction for any breach or threatened breach of any such covenants by Executive.  Nothing contained herein shall prevent or delay Fulton from seeking, in any court of competent jurisdiction, specific performance or other equitable remedies in the event of any breach or intended breach by Executive of any of its obligations hereunder.

 

(b) In the event Executive breaches Executive's obligations under Section 5.2, the period specified therein shall be tolled during the period of any such breach and any litigation seeking remedies for such breach and shall resume upon the conclusion or termination of any such breach and any such litigation.  The remedies set forth in this Section are cumulative and in addition to any and all other remedies available to Fulton at law or in equity.

 

Section 6. Payments for Termination in Connection with a Change in Control. 

 

6.1 Definitions.

 

(a) For purposes of this Agreement, a Change in Control of Fulton shall be deemed to have occurred when:

 

(i) Any person or group of persons acting in concert, shall have acquired ownership of more than 50 percent of the total fair market value or total voting power of the stock of Fulton; or

 

(ii) The composition of the Board of Fulton shall have changed such that during any period of 12 consecutive months during the term of this Agreement,  the majority of the Board is replaced by directors whose appointment

 

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or election is not endorsed by a majority of the members of Fulton’s board before the appointment or election; or

 

(iii) Any person or group of persons acting in concert acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition) ownership of 30 percent or more of the total voting power of the stock of Fulton; or

 

(iv) Any person or group of persons unrelated to Fulton acting in concert acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition) ownership of a portion of Fulton’s assets that has a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of Fulton before the acquisition or acquisitions, with the asset values determined without regard to any liabilities associated with such assets.

 

(b) For purposes of Section 6. 1 (a) (i) and (iii) above, a person shall be deemed to be the beneficial owner of any shares the person is deemed to own under the stock attribution rules of Code section 318(a).

 

(c) A “Change in Control Period” shall mean the period commencing 90 days before a Change in Control and ending two (2) years after such Change in Control.

 

6.2 Amount of Payments.  Except as provided in Section 6.2(d) and in lieu of amounts payable under Section 4, Fulton will pay the Executive the amounts specified in the circumstances below.

 

(a) If, during the Change in Control Period, the Executive is terminated by Fulton in the circumstances described Section 4.2(a)(ii), or the Executive resigns for Good Reason as described in Section 4.2(a)(i), Fulton will pay, or cause to be paid, to the Executive:

 

(i) an amount equal to two (2) times the sum of (A) the Base Salary immediately before the Change in Control and (B) the highest annual cash bonus or other incentive compensation awarded to the Executive over the past three years in which cash bonus or other incentive compensation was awarded (all exclusive of any election to defer receipt of compensation the Executive may have made); and

 

(ii) an amount equal to that portion, if any, of Fulton's contribution to the Executive's 401 (k), profit sharing, deferred compensation or other similar individual account plan which is not vested as of the date of termination of Executive's employment (the “Date of Termination”) (the “Unvested Company Contribution”), plus an amount which, when added to the Unvested Company Contribution, would be sufficient after Federal, state and local income taxes (based on the tax returns filed by the Executive most recently prior to the Date of Termination) to enable the Executive to net an amount equal to the Unvested Company Contribution; and

 

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(iii) Fulton shall pay the Executive up to $10,000 for executive outplacement services utilized by the Executive upon the receipt by Fulton of written receipts or other appropriate documentation; and

 

(iv) Except for the payment provided in (iii) above, such payments shall be made in one lump sum within 15 business days after the Executive's termination or resignation.

 

(b) Except as provided in Section 6(d), if the Executive is terminated as described in Section 6.2(a), the Executive shall continue to receive all employee benefits available to Executive pursuant to Section 3.2 of this Agreement that Executive was receiving immediately before such termination, as provided in Section 4.2(a), and also the benefits available to Executive immediately before such termination pursuant to Section 3.4.  The Executive shall continue to receive all such benefits for a period of two (2) years after the date of a termination described in Section 6.2(a).  The Executive shall pay the same percentage of the total cost of coverage under the applicable employee benefit plans as Executive was paying when Executive's employment terminated.  The total cost of the Executive's continued coverage shall be determined using the same rates for health, life and/or disability coverage that apply from time to time to similarly situated active employees.  In addition, Fulton shall pay to the Executive in a single lump sum as soon as practicable after Executive's termination described in Section 6.2(a) an aggregate amount equal to two (2) additional years of Fulton retirement plan contributions under each tax qualified or nonqualified defined contribution type of retirement plan in which the Executive was a participant immediately prior to Executive's termination or resignation and equal to the actuarial present value of two (2) additional years of benefit accruals under each tax qualified or nonqualified defined benefit type of retirement plan in which the Executive was a participant immediately prior to Executive's termination or resignation, calculated in each case as if the Executive had continued as a plan participant for the number of additional years indicated above, Executive's annual compensation for plan purposes in the most recently completed plan year of each plan continued unchanged through these additional years, and the retirement plans continued to operate unchanged through the additional years.  The actuarial equivalence factors and assumptions generally in use under any defined benefit plan shall be applied in determining lump sum present values of any defined benefit plan additional accruals payable hereunder.

 

(c) Upon the occurrence of a Change in Control, the vesting and exercise rights of all stock options, shares of restricted stock, and other equity-based compensation units held by the Executive pursuant to any stock option plan, stock option agreement, restricted stock agreement, or other long term incentive plan shall be governed by the terms of such plan or agreement, but in the event the plan or agreement is silent on the subject of change in control, all such options, shares, and units shall immediately become vested and exercisable as to all or any part of the shares and rights covered thereby.

 

(d) The Executive is to receive no payments under Section 6.2(a) and no benefits under 6.2(b) if the Executive is terminated by Fulton during a Change in Control Period upon the death or Disability of the Executive or for Cause.  In an instance of death

 

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or Disability of the Executive, however, the Executive and Executive's dependents, beneficiaries and estate shall receive any benefits payable to them under Section 4.4.

 

(e) References in this Section 6.2 and in Section 7 to “Fulton” shall include the successors of Fulton and the Bank, as applicable.

 

(f) In the event the payment described in this Section 6.2, when added to all other amounts or benefits provided to or on behalf of Executive in connection with his termination of employment, would result in the imposition of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended, such payments shall be retroactively (if necessary) reduced to the extent necessary to avoid such excise tax imposition.  Upon written notice to Executive, together with calculations of Fulton’s independent auditors, Executive shall remit to Fulton the amount of the reduction (only if such amount has been paid to Executive) plus such interest as may be necessary to avoid the imposition of such excise tax.  Notwithstanding the foregoing or any other provision of this Agreement to the contrary, if any portion of the amount herein payable to Executive is determined to be non-deductible pursuant to the regulations promulgated under Section 280G of the Internal Revenue Code of 1986, as amended, Fulton shall be required only to pay to Executive the amount determined to be deductible under Section 280G.

 

Section 7. Miscellaneous. 

 

7.1 Invalidity.  If any provision hereof is determined to be invalid or unenforceable by a court of competent jurisdiction, Executive shall negotiate in good faith to provide Fulton with protection as nearly equivalent to that found to be invalid or unenforceable and if any such provision shall be so determined to be invalid or unenforceable by reason of the duration or geographical scope of the covenants contained therein, such duration or geographical scope, or both, shall be considered to be reduced to a duration or geographical scope to the extent necessary to cure such invalidity.

 

7.2 Assignment: Benefit.  This Agreement shall not be assignable by Executive, and shall be assignable by Fulton only to any affiliate or to any person or entity which may become a successor in interest (by purchase of assets or stock, or by merger, or otherwise) to Fulton in the business or a portion of the business presently operated by it. Subject to the foregoing, this Agreement and the rights and obligations set forth herein shall inure to the benefit of, and be binding upon, the parties hereto and each of their respective permitted successors, assigns, heirs, executors and administrators, including the restrictive covenants of this Agreement.

 

7.3 Notices.  All notices hereunder shall be in writing and shall be sufficiently given if hand-delivered, sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested or by telegram, fax or telecopy (confirmed by U. S. mail), receipt acknowledged, addressed as set forth below or to such other person and/or at such other address as may be furnished in writing by any party hereto to the other.  Any such notice shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor, in all other cases.  Any and all service of process and any other notice in any such action, suit or proceeding shall be effective against any

 

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party if given as provided in this Agreement; provided that nothing herein shall be deemed to affect the right of any party to serve process in any other manner permitted by law.

 

(a) If to Fulton:

 

Fulton Financial Corporation

One Penn Square

Lancaster, PA  17604

                 Attention: General Counsel

 

(b) If to Executive:

 

Craig Roda

[REDACTED]

 

7.4 Entire Agreement and Modification.  This Agreement constitutes the entire agreement between the parties hereto with respect to the matters contemplated herein and supersedes all prior agreements and understandings with respect thereto.  The Original Agreement, if any, shall be terminated, with no further rights or obligations thereunder due to or from either party, as of the effective date hereof. Any amendment, modification, or waiver of this Agreement shall not be effective unless in writing and agreed and executed by Fulton and the Executive.  Neither the failure nor any delay on the part of any party to exercise any right, remedy, power or privilege shall preclude any other or further exercise of the same or of any other right, remedy, power, or privilege with respect to any occurrence and such failure or delay to exercise any right shall be construed as a waiver of any right, remedy, power, or privilege with respect to any other occurrence.

 

7.5 Governing Law.  This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania (and United States federal law, to the extent applicable), without giving effect to otherwise applicable principles of conflicts of law.

 

7.6 Headings; Counterparts.  The headings of sections and subsections in this Agreement are for convenience only and shall not affect its interpretation.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall be deemed to constitute but one and the same Agreement.

 

7.7 Further Assurances.  Each of the parties hereto shall execute such further instruments and take such other actions as any other party shall reasonably request in order to effectuate the purposes of this Agreement.

 

7.8 Attorneys' Fees and Related Expenses.  All attorneys' fees and related expenses incurred by Executive in connection with or relating to enforcement by Executive of Executive's rights under this Agreement shall be paid in full by the Bank, provided Executive prevails in connection with enforcing Executive's rights under this Agreement.

 

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7.9 Mitigation.  Executive shall not be required to mitigate the amount of any payment or benefit provided for in Sections 4 or 6 hereto by seeking employment or otherwise and the Bank shall not be entitled to setoff against the amount of any payments made pursuant to Sections 4 or 6 hereto with respect to any compensation earned by Executive arising from other employment.

 

7.10 Indemnification.  Except to the extent inconsistent with Fulton's certificate of incorporation or bylaws, Fulton will indemnify the Executive and hold Executive harmless to the fullest extent permitted by law with respect to Executive's service as an officer and employee of Fulton and its subsidiaries, which indemnification shall be provided following termination of employment for so long as the Executive may have liability with respect to Executive's service as an officer or employee of Fulton and its subsidiaries.  The Executive will be covered by a directors' and officers' insurance policy with respect to Executive's acts as an officer to the same extent as all other Bank officers under such policies.

 

7.11 409A Safe Harbor.  Notwithstanding anything in this Agreement to the contrary, in no event shall Fulton be obligated to commence payment or distribution to the Executive of any amount that constitutes nonqualified deferred compensation within the meaning of Internal Revenue Code section 409A (“Code section 409A”) earlier than the earliest permissible date under Code section 409A that such amount could be paid without additional taxes or interest being imposed under Code section 409A.  The Companies and the Executive agree that they will execute any and all amendments to this Agreement as they mutually agree in good faith may be necessary to ensure compliance with the distribution provisions of Code section 409A and to cause any and all amounts due under this Agreement, the payment or distribution of which is delayed pursuant to Code section 409A, to be paid or distributed in a single sum payment at the earliest permissible date under Code section 409A.  Without limiting the generality of the foregoing, in the event the Executive is to receive a payment of compensation hereunder that is on account of a separation from service, such payment is subject to the provisions of Code section 409A, and the Executive is a key employee of Fulton, then payment shall not be made before the date that is six months after the date of separation from service (or, if earlier than the end of the six month period, the date of the Executive’s death).  Amounts otherwise payable during such six month payment shall be accumulated and paid in a lump sum on the first day of the seventh month.  For purposes hereof, Executive is a key employee of Fulton if on his date of separation from service Fulton is publicly traded and he met the definition key employee found in Code section 416(i)(1)(A)(i), (ii) or (iii) (disregarding section 416(i)(5)) as of the last day of the calendar year preceding the date of separation.

 

7.12 Funding of Grantor Trust Upon Change in Control.  Fulton shall establish and maintain with an unaffiliated trustee an irrevocable grantor trust (the “Trust”), the assets of which shall at all times be subject to the claims of Fulton's creditors in the event of Fulton's insolvency.  Upon the occurrence of a Change in Control, Fulton shall deposit with the trustee of the Trust, to be credited to an account established under the Trust in the name of and for the benefit of the Executive, assets sufficient in value to satisfy fully the obligations of Fulton to the Executive under this Agreement that would arise in the event that subsequent to the Change in Control, and during the period the Executive continues to be covered by the severance benefit protections of this Agreement, the Executive is terminated by Fulton without Cause or the Executive terminates his own employment for Good Reason.  The contingent obligations to be funded under the Trust shall include in particular those specified in Section 6 and Section 7.8 hereof.  In the event the Executive's entitlement to benefits under the Agreement expires or the amounts funded are in excess of the amount needed to fully satisfy the claims under the Agreement of the Executive, any excess amounts in the Executive's account under the Trust shall revert to Fulton.

 

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

 

FULTON FINANCIAL CORPORATION

By:           /s/ Craig H. Hill                                                      /s/ Craig Roda                                                              

Name:  Craig H. Hill                                                                  EXECUTIVE: Craig Roda

        Title:    Senior Executive Vice President

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