Document:

Wolverine World Wide Exhibit 10.27 to Form 10-K - 02/26/08

EXHIBIT 10.27

WOLVERINE WORLD WIDE INC.

SEPARATION AND RELEASE AGREEMENT

          This Separation and Release Agreement (the "Agreement") is entered into by and between Wolverine World Wide, Inc. ("Company") and the Employee identified on the Agreement signature page (the "Employee").  The Company and the Employee agree as follows regarding the conclusion of Employee's employment with the Company. 

          1.          Conclusion of Employment.  Effective as August 24, 2007, (the "Separation Date"), the Employee hereby voluntarily resigns her position as Vice President, Human Resources, and from all other offices which she holds at the Company or any of its affiliates or subsidiaries.  All benefits not expressly addressed in this Agreement or which the Company is not obligated by applicable law to continue beyond the Separation Date, shall cease as of the Separation Date.

          2.          Employee's Separation Payment.  Subject to the Employee fulfilling all of her obligations under this Agreement, the Company will pay the Employee severance compensation in the amount of $170,000.00 less all applicable deductions for federal, state, and local taxes, social security, medical coverage premiums, wage withholding and other taxes (the "Separation Payment"), subject to the qualifications in this Section.  The Separation Payment shall be paid in twenty-one (21) installments.  The first installment of the Separation Payment shall be Eight Thousand Three Hundred Thirty-Three and 33/100 Dollars ($8,333.33) and shall be paid on the first bi-weekly payroll payment date for executives subsequent to the expiration of the revocation period referred to in Paragraph 16 below.  The next nineteen (19) installments each in the amount of Eight Thousand Three Hundred Thirty-Three and 33/100 Dollars ($8,333.33) shall be paid on successive payroll payment dates in accordance with the Company's current bi-weekly payroll practices for corporate executives.  The last installment shall be in the amount of Three Thousand Three Hundred Thirty-Three and 40/100 Dollars ($3,333.40) which shall be paid on the first payroll payment date for executives following the 20th installment payment.  The "Separation Payment Period" shall begin on the Effective Date and shall end on the date the last installment payment of the Separation Payment is paid in accordance with the terms of this Section.  The Company agrees to pay the Employee for all accrued, unused vacation, less applicable deductions for federal, state, and local taxes, social security, wage withholding, and other taxes.

          3.          Outplacement Assistance.  The Company shall provide the Employee outplacement assistance through Right Management, described as the Executive Program, for a period not to exceed nine (9) months.

          4.          Outstanding Balances.  Prior to the Effective Date, the Employee shall reimburse the Company for any outstanding personal expenses paid by the Company on her behalf.  The Employee shall pay any balances outstanding for personal purchases or expenses charged to any Company credit card or any business expenses already reimbursed.  If the Employee does not pay these expenses in full on or before to her Effective Date, the Employee hereby consents to the Company deducting such amounts from her last paycheck or Separation Payments, if necessary.

          5.          Stock Awards.  The Employee will not be eligible for any stock awards or any other awards or grants of stock incentives after the Separation Date. Any restricted stock for which the restrictions have not lapsed by the Separation Date will have the restrictions lapse

according to the terms of the applicable restricted stock agreements and plans.  Any options the Employee has as of the Separation Date will vest or expire according to the terms of the applicable option agreements and plans.

          6.          Other Benefits; Health Insurance Coverage.

          (a)          The Company and the Employee agree that all Company benefits, including, but not limited to, employee discount, long-term disability, short-term disability and life insurance coverage will cease as of the Separation Date, except to the extent explicitly set forth in this Agreement.  The Employee will not continue to earn vacation or other paid time off after the Separation Date.  The Employee's right to contribute to the Company's 401(k) plan shall cease as of the Separation Date, in accordance with the terms of that plan.

          (b)          Employee will not be eligible for any bonus for fiscal year 2007 under any of the Company's bonus plans, including the Short-Term Incentive Plan (Annual Bonus Plan) and Long-Term Incentive Plan (3-Year Plan).

          (c)          For nine (9) months following the Separation Date, Employee will be eligible to continue her use of AYCO Financial, provided Employee pays her required portion of this benefit.

          (d)          As of the Separation Date, the Employee will be eligible for continued health care coverage, as permitted under the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").  Provided the Employee timely elects to continue receiving group medical coverage and/or dental coverage pursuant to COBRA, the Company agrees to pay for the Employee's COBRA coverage as of the Separation Date through the end of the month in which the last installment of the Separation Payment is paid.  The Company's obligation to pay for the Employee's COBRA coverage, however, shall be reduced by the amount that the Employee will pay toward such coverage, which shall be equal to the amount of the Employee's medical coverage premiums as of the Separation Date.  Employee will be required to pay her COBRA contributions directly to the Company's COBRA administrator each month.  At the end of the month in which the last installment of the Separation Payment is paid, all continuing COBRA coverage shall be at the Employee's sole election and expense.  To the extent that the Employee begins new employment on or before the conclusion of the Separation Payment Period, the Employee shall immediately notify the Company of such employment.  In the event Employee becomes eligible for coverage through a new employer, Employee shall elect such coverage.  Upon Employee electing such coverage, the Company's obligation to pay for COBRA coverage shall immediately cease. If the Employee timely elects COBRA coverage, the Employee may use any unused balance in her Medical Flexible Spending Account.

          The Company may substitute for its current health insurance plan and retiree medical insurance plan such coverage and employee contribution requirements as are then being furnished by the Company to its similarly situated active employees.

          7.          Future Communications.  Should inquiries be made of the Company regarding the Employee's employment by the Company, the Company will limit the information it releases to

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the dates of her employment and the positions held, except to the extent it is otherwise required by law to release information regarding her employment.

          8.          Non-Disparagement.  The Employee shall not voice criticisms of the Company, its management or its operation in any conversation, correspondence or other communications with any employees of the Company, its customers, vendors, suppliers or with the general public.  The Employee understands and agrees that the commitment in this Section is a significant and material provision of this Agreement, and that the Company shall be entitled to immediately stop making any payments set forth in this Agreement should the Employee fail to comply with this provision or any other provision of this Agreement.

          9.          Confidential Information.  The Employee shall not use for personal benefit or another's benefit, or disclose to anyone, any Confidential Information obtained during her employment by the Company.  "Confidential Information" includes technical data, methods, processes, software, compositions, equipment, research data, marketing and sales information, personnel data, customer lists, books, records, reports, statements, financial and other data, plans and all the other know-how and trade secrets pertaining in any respect to the Company or the Company's business or customers.

          The Employee acknowledges that the confidentiality covenants set forth in this Section are a significant and material provision of this Agreement.  The Employee recognizes and agrees that, in the event of any breach by her of the confidentiality covenants, the Company shall be entitled to (1) reimbursement from her of any Separation Payments made to or on behalf of the Employee in accordance with this Agreement; (2) cease any payments set forth in this Agreement that would otherwise be paid to the Employee after the date of the breach under this Agreement; (3) State or federal court injunctive relief restraining the Employee from further violation of this Agreement; (4) money damages suffered by the Company as a result of the Employee's breach; and (5) reimbursement of court costs and attorney fees and costs reasonably incurred by the Company in securing the Employee's compliance with this Agreement.

          10.          Return of Property.  All documents, including memoranda, notes, records, reports, photographs, drawings, plans, papers, or other documents, samples or analyses, or electronically stored information, whether or not they contain Confidential Information, are the property of the Company and must be returned to the Company on or before the Separation Date.  The Employee shall return to the Company all of its property in her possession, including, but not limited to, keys, office equipment, credit cards, personal computers, files, correspondence, customer lists, business notes, documents and all other materials relating to the Company's business on or before the Separation Date.  The Employee agrees not to keep photocopies, facsimiles or electronically stored forms of any Company materials.

          11.          Non-Solicitation.  The Employee agrees that for the period beginning on her Separation Date through August 31, 2009, she will not directly or indirectly solicit or otherwise attempt to induce any Company employee to terminate employment with the Company.

          12.          Interpretation by Court.  If any provision of this Agreement as applied to the Company or Employee or to any circumstance shall be adjudged by a court of competent jurisdiction to be invalid or unenforceable, that provision and determination shall in no way

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affect any other provision of this Agreement, the application of such provision in any other circumstances, or the validity or enforceability of this Agreement.  The Company and the Employee agree that the provisions of this Agreement are reasonable and they intend this Agreement to be enforced as written.  If, however, any provision, or part any part of a provision is held to be unenforceable because of its duration or the types of activities restricted by it, all parties agree that a Court of competent jurisdiction making such determination shall have and should exercise the power to (1) reduce the duration of the provision or types of activities restricted to the maximum duration permitted by applicable law; (2) delete specific words or phrases; and (3) enforce the provision in its reduced form.

          13.          Waiver and Release.  In consideration of the payments and benefits set forth herein, Employee hereby releases, waives, and forever discharges the Company and each of its affiliates, operating divisions, officers, directors, shareholders, employees, agents, professionals, and other representatives from all claims, demands, obligations, damages, and liabilities of every kind and nature and form all actions and causes of action which Employee may now have or may have or maintain hereafter against any of them whether in law, or in equity, known or unknown, arising in any way out of Employee's employment with the Company.

          (a)          Included Statutes.  This Release and Waiver includes but is not limited to, any and all claims, including claims arising under the Civil Rights Act of 1964, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Family & Medical Leave Act, the Age Discrimination in  Employment Act, the Older Workers Benefit Protection Act, Michigan's Elliot-Larsen Civil Rights Act, the Michigan Persons With Disabilities Civil Rights Act, and all other relevant local, state and federal statutes.

          (b)          Included Claims.  This Agreement also includes, but is not limited to, all claims for past due or future wages, severance pay, bonuses, vacation pay, medical insurance, life or disability insurance, and other benefits (except vested retirement benefits) and all claims for violation of any express or implied agreement, written or verbal, that occurred before the execution of this Agreement, or for any violation of any common law duty or statute.

          (c)          Excluded Claims.  Employee does not waive rights or claims that may arise after the "Effective Date" of this Agreement.  This waiver and release shall not constitute a waiver or release by the Employee of any of her rights to file a discrimination complaint/charge with any local, state, or federal agency.

          (d)          This release shall not constitute a release by the Employee of her entitlement to any payments or benefits described in this Agreement or any right by the Employee to be indemnified by the Company as provided by statute, the Company's By-Laws, or any Directors and Officers liability insurance policy maintained by the Company for any acts or omissions during the term of her employment to the same extent she would have had the right to be indemnified absent this release.

          (e)          This waiver and release does not affect the Employee's right to continue COBRA continuation coverage after the Company paid period, if any, of COBRA coverage.

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          14.          Retirement Plans.  The parties recognize that the Employee may have certain vested interests in a "401(k)" retirement and/or other pension plan to which the Company has made contributions on her behalf.  The waiver and release of claims set forth in Section 13 does not apply to the Employee's vested interests in such plans.

          15.          Opportunity for Review and Consultation.  The Employee acknowledges having read this Agreement and understands all of its provisions.  The Employee knowingly and voluntarily agrees to all of the terms and provisions of this Agreement.  The Employee acknowledges that she has had twenty-one (21) days to enter into this Agreement.  If this Agreement was executed prior to the expiration of the twenty-one (21) day deliberation period, the Employee warrants such execution was voluntary and without coercion by the Company.  The Company encourages Employee to consult with an attorney regarding this Agreement.  The Employee acknowledges that she has either consulted with an attorney regarding this Agreement or has intentionally chosen not to exercise the right to do so.

          16.          Revocation Period.  Employee has seven (7) days after signing this Agreement to revoke the Agreement and the Agreement will not be effective until that revocation period has expired ("Effective Date.")  Notice of revocation shall be in a signed document delivered to Kenneth A. Grady before the expiration of the revocation period.

          17.          Disclosures and Subpoena. The Employee agrees that the Employee will not, directly or indirectly, and without the Company's prior written consent, voluntarily provide information, documents, or statements to any entity or person, including current or former employees of the Company (except the Employee's counsel, tax preparer, and immediate family) regarding: (a) any other person's employment with, or termination of employment from, the Company; or (b) any information or documents concerning the Company. In the event that a subpoena or other lawful process is properly served upon the Employee requiring production or disclosure of information or documents concerning the foregoing matters, the Employee shall promptly notify the Company, in accordance with the Notices provisions detailed herein, and shall provide it with copies of any subpoena or other process served upon the Employee. The Employee shall thereafter make such documents available to the Company for inspection and copying at a reasonable time and place designated by the Company prior to their production. In the event that the subpoena or other process requires testimony or statements from the Employee, the Employee agrees to meet, telephonically or in person, with attorneys or agents designated by the Company, at a reasonable time and place designated by the Company and prior to giving the testimony or the production of documents, for the purpose of discussing the same. Nothing herein shall give the Company the right to control or dictate the content of any testimony given by the Employee, or any documents produced by the Employee pursuant to subpoena or other lawful process. It is understood that the Employee shall provide all information lawfully required of the Employee, but shall not waive any matters of attorney-client privilege without the Company's express consent. In the event that the Company requires any information or testimony from the Employee in connection with any claim made against the Company, or any claims made by the Company against persons or entities not party to this Agreement, the Employee agrees to cooperate fully with and without cost to the Company, including: (a) appearing at any deposition, trial, hearing or arbitration; (b) meeting telephonically or in person with attorneys or agents designated by the Company, at a reasonable time and place designated by the Company and prior to the giving of testimony, for the purpose of discussing

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such testimony; and (c) providing the Company with any relevant documentation in the Employee's custody, control or possession.  The Company will, however, pay for or reimburse the Employee for any reasonable expenses, not including attorneys fees, she incurs in connection with such cooperation provided that the Company has agreed in advance to such expenses.

          18.          Future Cooperation. The Employee agrees that, in the future, she will cooperate with the Company and will execute such documents that the Company requests in order to fulfill her obligations hereunder.

          19.          Assignment/Binding Effect.  This Agreement is personal in nature as to Employee and may not be assigned by her.  The terms of this Agreement shall inure to the benefit of the Company and its successors and assigns.

          20.          Amendment.  This Agreement may be amended or modified only by a writing signed by the Company and Employee.

          21.          Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of Michigan.  The Company and the Employee irrevocably agree and consent to the exclusive jurisdiction of the Circuit Court for Kent County, Michigan for the resolution of claims, disputes and controversies under this Agreement.  This Agreement constitutes the entire Agreement between Employee and the Company with respect to the subject matter of this Agreement and supersedes all earlier agreements and understandings, oral and written, between the parties.

          22.          Entire Agreement.  This Agreement constitutes the entire agreement between Employee and the Company with respect to the subject matter of this Agreement and supersedes all earlier agreements and understandings, oral and written, between the parties.

	
AGREED:
	 	
AGREED:

	 	 	 
	 	 	 
	 	 	 
	/s/ Cheryl L. Johnson
	 	/s/ Kenneth A. Grady

	
Cheryl L. Johnson
	 	
Wolverine World Wide, Inc.

	
Employee
	 	
By:  Kenneth A. Grady

       General Counsel and Secretary

	 	 	 
	 	 	 
	September 17, 2007
	 	September 21, 2007

	
Date
	 	
Date

6ex10a.htm

    
      

    

    EMPLOYMENT
      AGREEMENT

    

    Employment
      Agreement (the "Employment Agreement") made as of this 20th day of February,
      2008 and effective as of January 23, 2008 (the "Effective Date) is by and
      between TERRY THOMPSON,
      an individual residing at 36 Beacon Hill, Sparta, New Jersey 07871 (the
      "Employee"), SUSSEX
      BANK, a state chartered bank with its principal place of business located
      at 399 State Highway 23, Franklin, New Jersey 07416 (the “Employer”), and SUSSEX BANCORP, a New Jersey
      corporation with its principal place of business located at 399 State Highway
      23, Franklin, New Jersey 07416 (the "Company").

     

    WHEREAS,
      the Board of
      Directors of the Employer and the Board of Directors of the Company have each
      determined that it is in the best interests of each of the Employer and the
      Company to enter into this Agreement with Employee, and each respective Board
      has authorized the Employer and the Company to enter into this
      Agreement;

     

    WHEREAS,
      the Employee agrees
      to be employed pursuant to the terms and conditions of this
      Agreement;

     

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

     

    1.           Employment.  The
      Employer agrees to employ the Employee, and the Employee hereby accepts such
      employment, upon the terms and conditions set forth herein.

     

    2.           Position
      and
      Duties.  The Employee shall be employed as President and the
      Chief Operating Officer of the Employer, to perform such services in that
      capacity as are usual and customary for comparable institutions and as shall
      from time-to-time be established by the Chief Executive Officer and the Board
      of
      Directors of the Employer.  Employee agrees that he will devote his
      full business time and efforts to his duties hereunder.

     

    3.           Cash
      Compensation.  Employer shall pay to the Employee compensation
      for his services as follows:

     

    (a)           Base
      Salary.  The Employee shall be entitled to receive, commencing
      upon the date of this Agreement, an annual base salary (the "Base Salary")
      of
      $140,343, which shall be payable in installments in accordance with Employer's
      usual payroll method.  Annually thereafter, on or prior to the
      anniversary date of this Agreement, the Chief Executive Officer
      and

    
      
         
          

      

      
        1

        
          

        

      

      
         
          

      

    

    Board
      of
      Directors shall review the Employee's performance, the status of Employer and
      such other factors as the Board of Directors or a committee thereof shall deem
      appropriate and shall adjust the Base Salary accordingly. Employee acknowledges
      that his Base Salary hereunder may be adjusted upward or downward; provided,
      however, that in no event will his Base Salary be adjusted downward below the
      minimum base salary established by the Employer as part of its regular annual
      employee review process for employees having the same grade as
      Employee.

     

    (b)           Discretionary
      Bonus.  Employee may be entitled to receive annually at the
      discretion of the Board of Directors or a committee thereof a cash
      bonus.

     

    4.           Other
      Benefits; Fringe
      Benefits.  The Employee shall be entitled to the exclusive and
      unlimited use of an automobile or a cash allowance to be used for the purpose
      of
      maintaining an automobile of a type and style commensurate with the Employee's
      status as President of the Employer.  In addition, the Employee shall
      be entitled to receive hospital, health, medical, and life insurance of a type
      currently provided to and enjoyed by other senior officers of Employer, and
      shall be entitled to participate in any other employee benefit or retirement
      plans offered by Employer to its employees generally or to its senior
      management.

     

    5.           Term.   The
      term of this Agreement shall be three (3) years, commencing on the date hereof
      and continuing until the third anniversary of the date hereof; provided,
      however, that the term of this Agreement shall automatically renew for one
      (1)
      additional year on the third anniversary  hereof unless, at least
      three (3) months prior to such anniversary date, either Employer or Employee
      shall have provided the other with written notice of their intention not to
      extend the term of this Agreement; further provided, however, that in the event
      the term of this Agreement is so extended, it shall also automatically renew
      for
      one (1) additional year on the fourth anniversary  hereof unless, at
      least three (3) months prior to such anniversary date, either Employer or
      Employee shall have provided the other with written notice of their intention
      not to further extend the term of this Agreement.

     

    6.           Termination.  Employee
      may be terminated at any time, without prejudice to Employee's right to
      compensation or benefits as provided herein.  Employee's rights upon a
      termination shall be as follows:

     

    (a)           Cause.  As
      used in this Agreement, the term "Cause" shall mean the Employee's personal
      dishonesty, willful misconduct, breach of fiduciary duty involving
      personal

    
      
         
          

      

      
        2

        
          

        

      

      
         
          

      

    

    profit,
      intentional failure to perform stated duties, willful violation of any law,
      rule
      or regulation (other than traffic violations or similar offenses) or final
      cease-and-desist order, or a material breach of any provision of this
      Agreement.  Notwithstanding the above, the Employee shall not be
      deemed to have been terminated for cause unless and until there shall have
      been
      delivered to him a copy of a resolution duly adopted by the affirmative vote
      of
      not less than three-fourths of the members of the Board of Directors of the
      Employer at a meeting of its Board called and held for that purpose (after
      reasonable notice to the Employee and an opportunity for him, together with
      counsel, to be heard before such Board of Directors), finding that in the good
      faith opinion of the Board of Directors, the Employee was guilty of conduct
      justifying termination for cause and specifying the particulars thereof in
      detail; provided, however, that nothing contained herein shall prohibit Employee
      from being suspended from his duties hereunder by a duly authorized agent of
      the
      Board upon a good faith determination that "cause" exists.  Such
      suspension shall last until such time as the Board meeting provided for above
      shall have occurred, provided that such Board meeting shall occur within a
      reasonable period of time.  During such suspension Employee shall
      continue to be an employee, entitled to all salary and benefits provided for
      hereunder.

     

    (b)           Termination
      With
      Cause.  Employer shall have the right to terminate the Employee
      for "cause", upon written notice to him of such determination, specifying the
      alleged "cause".  In the event of such termination, the Employee shall
      not be entitled to any further benefits under this Agreement.

     

    (c)           Termination
      Without
      Cause.   Upon a termination of Employee's employment
      hereunder without "cause", Employee shall be entitled to receive his then
      current base salary for the remaining term of this Agreement.  Such
      payments may be made over the remaining term of this Agreement in periodic
      payments in the same manner in which the Employee's salary was paid through
      the
      time of such termination, or by a lump sum payment of the discounted present
      value of all base salary payments through the remaining term of this
      Agreement.  The determination of the method of payment shall be made
      mutually by Employer and the Employee; provided, however, that in the event
      the
      parties cannot agree on the method of payment, Employer shall be entitled to
      choose.  In addition, Employer shall continue to provide the Employee
      with hospital, health, medical and life insurance, and any other like benefits
      in

    
      
         
          

      

      
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    effect
      at
      the time of such termination through the end of the term of this
      Agreement.  The Employee shall have no duty to mitigate damages in
      connection with his termination by Employer without "cause".  However,
      if the Employee obtains new employment and such new employment provides for
      hospital, health, medical and life insurance, and other benefits, in a manner
      substantially similar to the benefits payable by Employer hereunder, Employer
      may permanently terminate the duplicative benefits it is obligated to provide
      hereunder.

     

    (d)           Suspension
      and Special Regulatory Rules.

     

    (i)           If
      the Employee is suspended and/or temporarily prohibited from participating
      in
      the conduct of the affairs of the Employer by a notice served under Section
      8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act ("FDI Act"),
      Employer's obligations under this Agreement shall be suspended as of the date
      of
      service, unless stayed by appropriate proceedings.

     

    (ii)           If
      the Employee is removed and/or permanently prohibited from participating in
      the
      conduct of the affairs of the Employer by an order issued under Section 8(e)
      or
      Section 8(g)(1) of the FDI Act, all obligations of Employer under this Agreement
      shall terminate as of the effective date of the order and the Employee shall
      not
      be entitled to received the payments provided for under Paragraph (c)
      above.

     

    (iii)           If
      the Employer is in default, as defined in Section 3(x)(1) of the FDI Act, all
      obligations of Employer under this Agreement shall terminate as of the date
      of
      default.

     

    7.           Resignation
      for
      Cause.  During the term of this Agreement, the Employee shall
      be entitled to resign from his employment with Employer, and receive the
      payments provided for below, in the event that the Employee is not in breach
      of
      this Agreement and Employer (i) reassigns the Employee to a position of lesser
      rank or status than President, or (ii) reduces the Employee's compensation
      or
      other benefits below the amounts provided for under Sections 3 and 4
      hereof.  Upon the occurrence of any of these events, the Employee
      shall have thirty days to provide Employer notice of his intention to terminate
      this Agreement.  In the event the Employee elects to so terminate this
      Agreement, such termination shall be treated as a termination without "cause"
      by
      Employer under Section 6(c) hereof, and the Employee shall be entitled to
      receive all payments and other benefits called for under such Section
      6(c).

    
      
         
          

      

      
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    8.           Change
      in
      Control.

     

    (a)           Upon
      the occurrence of a Change in Control (as herein defined) followed at any time
      during the term of this Agreement by the involuntary termination of the
      Employee's employment other than for "cause", as defined in Section 6(a) hereof,
      or, as provided below the voluntary termination of the Employee within eighteen
      (18) months of such Change in Control, Employee shall become entitled to receive
      the payments provided for under paragraph (c) below.  Upon the
      occurrence of a Change in Control, the Employee shall have the right to elect
      to
      voluntarily terminate his employment within eighteen (18) months of such Change
      in Control following any demotion, loss of title, office of significantly
      authority, reduction in his annual compensation or benefits, or relocation
      of
      his principal place of employment by more than thirty (30) miles from its
      location immediately prior to the Change in Control.

     

    (b)           A
      "Change in Control" shall mean:

     

    
      	
               
                

            	
              (i)

            	
              a
                reorganization, merger, consolidation or sale of all or substantially
                all
                of the assets of the Company, or a similar transaction, in which
                the
                shareholders of the Company prior to such transaction hold less than
                a
                majority of the voting power of the resulting
                entity;

            

    

    

    
      	
               
                

            	
              (ii)

            	
              individuals
                who constitute the Incumbent Board (as herein defined) of the Company
                cease for any reason to constitute a majority
                thereof;

            

    

    

    
      	
               
                

            	
              (iii)

            	
              an
                event of a nature that would be required to be reported in response
                to
                Item I of the current report on Form 8-K, as in effect on the date
                hereof,
                pursuant to Section 13 or 15(d) of the Securities Exchange Act of
                1934
                (the "Exchange Act") if Employer were a reporting company subject
                to the
                Exchange Act; or

            

    

    

    
      	
               
                

            	
              (iv)

            	
              Without
                limitation, a change in control shall be deemed to have occurred
                at such
                time as any "person" (as the term is used in Section 13(d) and 14(d)
                of
                the Exchange Act) other than the Company or the Employer or the trustees
                or any administration of any employee stock ownership plan and trust,
                or
                any other employee benefit plans, established by the Company or the
                Employer from time-to-time in is or becomes a "beneficial owner"
                (as
                defined in Rule 13-d under the Exchange Act) directly or indirectly,
                of
                securities of the Employer representing 25% or more of the Company’s
                outstanding securities ordinarily having the right to vote at the
                election
                of directors (the “Trigger
                Amount”);

            

    

    
      
         
          

      

      
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    provided,
      however, that in the event any such person acquires the Trigger Amount in a
      transaction (i) which has been approved in advance by the Incumbent Board and
      (ii) which does not result in such person controlling a majority  of
      the voting power of the full Board of Directors of the Company, then any such
      transaction shall not be deemed a Change in Control under this subsection (iv);
      or

    

    
      	
               
                

            	
              (v)

            	
              A
                tender offer is made for 25% or more of the voting securities of
                the
                Company and the shareholder owning beneficially or of record 25%
                or more
                of the outstanding securities of the Company have tendered or offered
                to
                sell their shares pursuant to such tender and such tendered shares
                have
                been accepted by the tender
                offeror.

            

    

    

    For
      these
      purposes, "Incumbent Board" means the Board of Directors of the Company on
      the
      date hereof, provided that any person becoming a director subsequent to the
      date
      hereof whose election was approved by a voting of at least three-quarters of
      the
      directors comprising the Incumbent Board, or whose nomination for election
      by
      members or stockholders was approved by the same nominating committee serving
      under an Incumbent Board, shall be considered as though he were a member of
      the
      Incumbent Board.

     

    (c)           In
      the event the conditions of Section (a) above are satisfied, Employee shall
      be
      entitled to receive a lump sum payment equal to 2.99 times Employee's then
      current Base Salary; provided, however,
      that
      in no event shall any payments provided for hereunder constitute an "excess
      parachute payment" under Section 280G of the Internal Revenue Code of 1986,
      as
      amended or any successor thereto, and in order to avoid such a result the
      benefits provided for hereunder will be reduced, if necessary, to an amount
      which is One Dollar ($1.00) less than an amount equal to three (3) times
      Employee's "base amount" as determined in accordance with such Section
      280G.  In addition to the foregoing, Employee shall be entitled to
      receive from Employer, or its successor, hospital, health, medical and life
      insurance on the terms and at the cost to Employee as Employee was receiving
      such benefits upon the date of his termination.  Employer's obligation
      to continue such insurance benefits will be for a period of three (3)
      years.

     

    9.           Covenant
      Not to
      Compete.  Employee agrees that during the term of his
      employment hereunder and for a period of one (1) year after the termination
      of
      his employment, he will not in any way, directly or indirectly, manage, operate,
      control, accept employment or a consulting position with or otherwise advise
      or
      assist or be connected with or own or have any

    
      
         
          

      

      
        6

        
          

        

      

      
         
          

      

    

    other
      interest in or right with respect to (other than through ownership of not more
      than five percent (5%) of the outstanding shares of a corporation whose stock
      is
      listed on a national securities exchange or on the National Association of
      Securities Dealers Automated Quotation System) any enterprise which competes
      with the Company in the financial services business  in the counties
      in which the Company conducts its business on the date of Employee's
      termination.  In the event that this covenant not to compete shall be
      found by a court of competent jurisdiction to be invalid or unenforceable as
      against public policy, such court shall exercise discretion in reforming such
      covenant to the end that Employee shall be subject to a covenant not to compete
      that is reasonable under the circumstances and enforceable by the
      Company.  Employee agrees to be bound by any such modified covenant
      not to compete.

     

    10.           Miscellaneous.

     

    (a)           Governing
      Law.  In the absence of controlling Federal law, this Agreement
      shall be governed by and interpreted under the substantive law of the State
      of
      New Jersey.

     

    (b)           Severability.  If
      any provision of this Agreement shall be held to be invalid, void, or
      unenforceable, the remaining provisions hereof shall in no way be affected
      or
      impaired, and such remaining provisions shall remain in full force and
      effect.

     

    (c)           Entire
      Agreement;
      Amendment.  This Agreement sets for the entire understanding of
      the parties with regarding to the subject matter contained herein and supersedes
      any and all prior agreements, arrangements or understandings relating to the
      subject matter hereof and may only be amended by written agreement signed by
      both parties hereto or their duly authorized representatives.

     

    
        
        (d)          
        Successors
        and
        Assigns.  This Agreement shall be binding upon and become
        the legal obligation of the successors and assigns of
        Employer.

    

     

    [this
      space left intentionally blank; signature for Employment Agreement on next
      page]

    
      
         
          

      

      
        7

        
          

        

      

      
         
          

      

    

     

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

    

    
      	 
              	
              SUSSEX
                BANK

            
	 
              	 
              	 
              
	 
              	 
              	 
              
	 
              	
              By:

            	 
              
	 
              	 
              	
              Name:   Donald
                L. Kovach

            
	 
              	 
              	
              Title:     Chief
                Executive Officer

            
	 
              	 
              	 
              
	 
              	 
              	 
              
	 
              	
              EMPLOYEE:

            
	 
              	 
              	 
              
	 
              	 
              	 
              
	 
              	
              Name:   Terry
                Thompson

            

    

    

    

    Sussex
      Bancorp guarantees the payments
      described in paragraphs 4(b), 6(c), 7 & 8(c) of this Agreement and executes
      this Agreement solely for that purpose.

    

    

    
      	 
              	
              SUSSEX
                BANCORP

            
	 
              	 
              	 
              
	 
              	 
              	 
              
	 
              	
              By:

            	 
              
	 
              	 
              	
              Name:  Donald
                L. Kovach

            
	 
              	 
              	
              Title:    President
                and Chief Executive Officer

            

    

    

     

    8

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