Document:

EX-10.1

 

Exhibit 10.1

Employment Agreement for

Denise S. Stump

The Scotts Company LLC

October 1, 2007

 

 

Contents

	 	 	 	 	 
	Article 1. Term of Employment
	 	 	1	 
	 
	 	 	 	 
	Article 2. Definitions
	 	 	2	 
	 
	 	 	 	 
	Article 3. Position and Responsibilities
	 	 	5	 
	 
	 	 	 	 
	Article 4. Standard of Care
	 	 	5	 
	 
	 	 	 	 
	Article 5. Compensation
	 	 	6	 
	 
	 	 	 	 
	Article 6. Expenses
	 	 	7	 
	 
	 	 	 	 
	Article 7. Employment Terminations
	 	 	7	 
	 
	 	 	 	 
	Article 8. Assignment
	 	 	11	 
	 
	 	 	 	 
	Article 9. Notice
	 	 	11	 
	 
	 	 	 	 
	Article 10. Confidentiality, Noncompetition, and Nonsolicitation
	 	 	11	 
	 
	 	 	 	 
	Article 11. Miscellaneous
	 	 	12	 
	 
	 	 	 	 
	Article 12. Governing Law
	 	 	13	 
	 
	 	 	 	 
	Article 13. Indemnification
	 	 	13	 

 

 

The Scotts Company LLC

Employment Agreement for Denise S. Stump

     This EMPLOYMENT AGREEMENT is made, entered into, and is effective as of the first day of
October 2007 (herein referred to as the “Effective Date”), by and between The Scotts Company LLC
(“Company”), an Ohio corporation and Denise S. Stump (“Executive”).

     WHEREAS, the Company and the Executive intend that the Executive shall continue to serve
Scotts and the Company as Executive Vice President – Global Human Resources.

     WHEREAS, the Executive possesses considerable experience and an intimate knowledge of the
business, and, as such, the Executive has demonstrated unique qualifications to act in an executive
capacity for the Company, Scotts or any of their affiliates.

     WHEREAS, the Company is desirous of assuring the employment of the Executive in the above
stated capacity, and the Executive is desirous of such assurance.

     WHEREAS, the Company and Executive desire to enter into an agreement embodying the terms of
such employment.

     NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of
the parties set forth in this Agreement, and of other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

Article 1. Term of Employment

     The Company hereby agrees to employ the Executive and the Executive agrees to serve the
Company, Scotts and their affiliates, in accordance with the terms and conditions set forth herein,
for an initial period of three (3) years commencing as of the Effective Date; subject, however, to
earlier termination as expressly provided herein.

     The initial three (3) year period of employment shall be extended for one (1) additional year
at the end of the initial three (3) year term and then again after each successive year thereafter.
However, either party may terminate this Agreement at the end of the initial three (3) year term,
or at the end of any successive one (1) year term thereafter, by delivering to the other party
written notice of its intent not to renew at least sixty (60) days prior to the end of such initial
three (3) year term or successive term.

     In the event such notice of intent not to renew is properly delivered, this Agreement
automatically shall expire at the end of the initial three (3) year term or successive term then in
progress.

     Notwithstanding the foregoing, if at any time during the initial three (3) year term of the
Agreement or any successive term, a Change in Control occurs, then the term of this Agreement shall
be the later of the remainder of the initial three (3) year term or two (2) years beyond the month
in which the effective date of such Change in Control occurs.

 

 

Article 2. Definitions

	 	2.1	 	“Agreement” means this Employment Agreement for Denise S. Stump.
	 
	 	2.2	 	“Annual Bonus Award” means the annual bonus to be paid to the Executive in accordance
with the Company’s annual bonus program as described in Section 5.2 herein.
	 
	 	2.3	 	“Award Period” means the performance period applicable to Long-Term Incentive Awards
granted under the relevant Company long-term incentive plan.
	 
	 	2.4	 	“Base Salary” means the salary of record paid to the Executive as annual salary,
pursuant to Section 5.1, excluding all other amounts received including under incentive or
other bonus plans, whether or not deferred.
	 
	 	2.5	 	“Beneficiary” means the individuals or entities designated or deemed designated by
the Executive pursuant to Section 11.6 herein.
	 
	 	2.6	 	“Board” or “Board of Directors” means the Board of Directors of Scotts.
	 
	 	2.7	 	“Cause” means the Executive’s:

	 	(a)	 	Continued failure to substantially perform her duties with the Company,
Scotts or any of their affiliates after a written demand for substantial
performance is delivered to the Executive that specifically identifies the manner
in which the Company believes that the Executive has failed to substantially
perform her duties, and after the Executive has failed to resume substantial
performance of her duties on a continuous basis within thirty (30) calendar days of
receiving such demand; or
	 
	 	(b)	 	Conviction of a felony; or
	 
	 	(c)	 	Engagement in illegal conduct, an act of dishonesty, violation of
Scotts’ policies or other similar conduct, that in the Company’s sole discretion,
which shall be exercised in good faith, is injurious to the Company, Scotts or any
of their affiliates; or
	 
	 	(d)	 	Material breach of any provision of this Agreement; provided, however,
that the Executive’s willful and material breach of Article 4 shall not constitute
“Cause” unless the Executive has first been provided with written notice detailing
such breach and a thirty (30) day period to cure such breach; or
	 
	 	(e)	 	Breach of Scotts’ code of business conduct or ethics as determined in
good faith by the Company; or
	 
	 	(f)	 	Violation of Scotts’ insider-trading policies as determined in good
faith by the Company; or
	 
	 	(g)	 	Material breach of her fiduciary duties to the Company, Scotts or any
of their affiliates as determined in good faith by the Company.

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	 	 	 	For purposes of determining Cause, no act or omission by the Executive shall be
considered “willful” unless it is done or omitted in bad faith or without reasonable
belief that the Executive’s action or omission was in the best interests of the Company.
Any act or failure to act based upon: (i) authority given pursuant to a resolution duly
adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively
presumed to be done or omitted to be done by the Executive in good faith and in the best
interests of the Company.

	 	2.8	 	“Change in Control” means the occurrence of any of the following events after the
Effective Date of this Agreement:

	 	(a)	 	Any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
other than Scotts, subsidiaries of Scotts, an employee benefit plan sponsored by
Scotts, or Hagedorn Partnership, L.P. or its successor or any party related to
Hagedorn Partnership, L.P. (as determined by the Board of Directors) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than thirty percent (30%) of the combined voting stock of
Scotts;
	 
	 	(b)	 	The shareholders of Scotts adopt or approve a definitive agreement or
series of related agreements for the merger or other business consolidation with
another person, the agreement(s) become effective and, immediately after giving
effect to the merger or consolidation, (i) less than fifty percent (50%) of the
total voting power of the outstanding voting stock of the surviving or resulting
person is then “beneficially owned” (within the meaning of Rule l3d-3 under the
Exchange Act) in the aggregate by (x) the shareholders of Scotts immediately prior
to such merger or consolidation, or (y) if a record date has been set to determine
the shareholders of Scotts entitled to vote with respect to such merger or
consolidation, the shareholders of Scotts as of such record date and (ii) any
“person” or “group” (as defined in Section 13(d)(3) and 14(d)(2) of the Exchange
Act) has become the direct or indirect “beneficial owner” (as defined in Rule l3d-3
under the Exchange Act) of more than fifty percent (50%) of the voting power of the
voting stock of the surviving or resulting person;
	 
	 	(c)	 	Scotts, either individually or in conjunction with one or more of its
subsidiaries, sells, assigns, conveys, transfers, leases or otherwise disposes of,
or the subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of,
all or substantially all of the properties and assets of Scotts and the
subsidiaries, taken as a whole (either in one transaction or a series of related
transactions), to any person (other than Scotts or a wholly-owned subsidiary);
	 
	 	(d)	 	For any reason, Hagedorn Partnership, L.P. or its successor or any
party related to Hagedorn Partnership, L.P. (as determined by the Board of
Directors) becomes the beneficial owner, as defined above, directly or indirectly,
of securities of Scotts representing more than forty-nine percent (49%) of the
combined voting power of Scotts’ then-outstanding voting securities; or

3

 

	 	(e)	 	The adoption or authorization by the shareholders of Scotts of a plan
providing for the liquidation or dissolution of Scotts.

	 	2.9	 	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
For purposes of this Agreement, references to sections of the Code shall be deemed to
include references to any applicable regulations thereunder and any successor or similar
provision.
	 
	 	2.10	 	“Committee” means the Compensation and Organization Committee of the Board or a
subcommittee thereof, or any other committee designated by the Board to take any action
referenced in this Agreement. The members of the Committee shall be appointed from time to
time by and shall serve at the discretion of the Board. If the Committee does not exist or
cannot function for any reason, the Board may take any action under this Agreement that
would otherwise be the responsibility of the Committee.
	 
	 	2.11	 	“Company” means The Scotts Company LLC, an Ohio corporation, or any successor company
thereto as provided in Section 8.1 herein.
	 
	 	2.12	 	“Director” means any individual who is a member of the Board of Directors of Scotts.
	 
	 	2.13	 	“Disability” or “Disabled” means for all purposes of this Agreement, a consecutive
period of ninety (90) calendar days during which the Executive is unable to perform her
duties.
	 
	 	2.14	 	“Effective Date” means October 1, 2007.
	 
	 	2.15	 	“Effective Date of Termination” means the date on which a termination of the
Executive’s employment occurs. For purposes of this Agreement, references to a
“termination of employment” or any form thereof shall mean a “separation from service” as
defined under Section 409A of the Code.
	 
	 	2.16	 	“Executive” means Denise S. Stump.
	 
	 	2.17	 	“Good Reason” means, without the Executive’s consent, the existence of one or more of
the following conditions:

	 	(a)	 	A material diminution in the Executive’s base compensation;
	 
	 	(b)	 	A material diminution in the Executive’s authority, duties, or
responsibilities;
	 
	 	(c)	 	A material diminution in the authority, duties, or responsibilities of
the supervisor to whom the Executive is required to report;
	 
	 	(d)	 	A material diminution in the budget over which the Executive retains
authority;
	 
	 	(e)	 	A material change in the geographic location at which the Executive
must perform services; or

4

 

	 	(f)	 	Any other action or inaction that constitutes a material breach by the
Company of this Agreement (including under Section 8.1).

	 	 	 	Notwithstanding the foregoing, (i) an event described in this Section 2.17 shall
constitute Good Reason only if the Company fails to cure such event within thirty (30)
days after receipt from the Executive of written notice of the event which constitutes
Good Reason and (ii) Good Reason shall cease to exist for an event on the ninetieth
(90th) day following the later of its occurrence or the Executive’s knowledge
thereof, unless the Executive has given the Company written notice of such event prior
to such date.
	 
	 	2.18	 	“Long-Term Incentive Award” means the Long-Term Incentive Award to be paid to the
Executive in accordance with the Company’s long-term incentive plan as described in
Section 5.3 herein.
	 
	 	2.19	 	“Notice of Termination” means a written notice which shall indicate the specific
termination provision in this Agreement relied upon, and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provisions so indicated.
	 
	 	2.20	 	“Scotts” means The Scotts Miracle-Gro Company, an Ohio corporation.
	 
	 	2.21	 	“Specified Executive” means a “specified employee” within the meaning of Treasury
Regulation §1.409A-1(i) and as determined under the Company’s policy for determining
specified employees.
	 
	 	2.22	 	“Target Annual Bonus Award” means the amount of money determined by multiplying the
Executive’s bonus target percentage by the Executive’s then Base Salary. For example, if
the Executive’s Base Salary is $100,000.00 and the Executive’s bonus target percentage is
25%, then the Executive’s Target Annual Bonus Award is $25,000.00.

Article 3. Position and Responsibilities

     During the term of this Agreement, the Executive agrees to serve as Executive Vice President –
Global Human Resources. In her capacity as Executive Vice President – Global Human Resources, the
Executive shall report directly to the Chief Executive Officer of the Company, and shall perform
duties and responsibilities of an Executive Vice President – Global Human Resources and other
duties and responsibilities as the Chief Executive Officer may assign her during the term of this
Agreement.

Article 4. Standard of Care

     During the term of this Agreement, the Executive agrees to devote her full time, attention,
and energies to the Company’s business and shall not be engaged in any other business activity,
whether or not such business activity is pursued for gain, profit, or other pecuniary advantage
unless such business activity is approved in writing by the Board or Committee, provided, however,
that board positions with nonprofit or philanthropic organizations which do not interfere with the
Executive’s performance of her duties and responsibilities shall not require Board or Committee
approval. The Executive covenants, warrants, and represents that she shall:

	 	(a)	 	Devote her full and best efforts to the fulfillment of her employment obligations;
and

5

 

	 	(b)	 	Adhere to Scotts’ code of business conduct or ethics as determined by the Board, the
Committee or the Company and exercise the highest standards of conduct in the performance
of her duties.

Article 5. Compensation

     As remuneration for all services to be rendered by the Executive during the term of this
Agreement, and as consideration for complying with the covenants herein, the Company shall pay and
provide to the Executive the following:

     5.1 Base Salary. The Company shall pay the Executive a Base Salary in the amount of
three hundred and twenty-one thousand, four hundred dollars ($321,400.00) per year. This Base
Salary shall be paid to the Executive in equal installments throughout the year, consistent with
the normal payroll practices of the Company. The Base Salary shall be reviewed at least annually
following the Effective Date of this Agreement, while this Agreement is in force, to ascertain
whether, in the judgment of the Committee, such Base Salary should be modified. If modified, the
Base Salary as stated above shall, likewise, be modified for all purposes of this Agreement.

     5.2 Annual Bonus. The Executive shall be eligible to receive in addition to her Base Salary
an annual incentive compensation award (“Annual Bonus Award”) for services rendered during such
fiscal year. The amount of the Annual Bonus Award, if any, with respect to any fiscal year shall
be based upon performance targets and award levels determined by the Committee in its sole
discretion, in accordance with the Company’s annual incentive compensation plan as in effect for
executives from time to time.

     5.3 Long-Term Incentives. The Executive shall be eligible to receive, in addition to her Base
Salary and Annual Bonus Award, a Long-Term Incentive Award for services rendered during an Award
Period established by the Committee. The amount of the Long-Term Incentive Award, if any, with
respect to any Award Period shall be based upon performance targets and award levels determined by
the Committee in its sole discretion, in accordance with the Company’s long-term incentive
compensation plan as in effect for executives from time to time.

     5.4 Retirement Benefits. During the term of this Agreement, and as otherwise provided within
the provisions of each of the respective plans, the Company shall provide to the Executive all
retirement benefits to which other executives and employees of the Company are entitled to receive,
subject to the eligibility requirements and other provisions of such arrangements as applicable to
executives of the Company generally.

     5.5 Employee Benefits. During the term of this Agreement, and as otherwise provided within the
provisions of each of the respective plans, the Company shall provide to the Executive all benefits
to which other executives and employees of the Company are entitled to receive, subject to the
eligibility requirements and other provisions of such arrangements as applicable to executives of
the Company generally. Such benefits shall include, but shall not be limited to, life insurance,
comprehensive health and major medical insurance, dental insurance, prescription drug insurance,
vision insurance, and short-term and long-term disability. The Executive shall likewise participate
in any additional benefit as may be established during the term of this Agreement, by standard
written policy of the Company.

6

 

     5.6 Perquisites. The Company shall provide to the Executive on an annual basis an automobile
allowance of twelve thousand ($12,000.00) dollars. This allowance shall be paid to the Executive in
equal installments throughout the year, consistent with the normal payroll practices of the
Company. Additionally, the Company shall provide to the Executive on an annual basis either (a) a
four thousand dollar ($4,000.00) amount to be used in lieu of the provision of personal financial
planning, or (b) personal financial planning up to a cost or value of such amount. The value of
such services or such amount will be added to the Executive’s taxable income. Some or all of such
value or amount of the benefits described in this Section 5.6 may be tax deductible by the
Executive, but the Company makes no tax representation relating thereto.

Article 6. Expenses

     Upon presentation of appropriate documentation, the Company shall pay, or reimburse the
Executive, for all ordinary and necessary expenses, in a reasonable amount, which the Executive
incurs in performing her duties under this Agreement including, but not limited to, travel,
entertainment, professional dues and subscriptions, and all dues, fees, and expenses associated
with membership in various professional, business, and civic associations and societies in which
the Executive’s participation is in the best interest of the Company, in accordance with Company
policy.

Article 7. Employment Terminations

     7.1 Termination Due to Death. In the event of the Executive’s death during the term of this
Agreement, this Agreement shall terminate effective immediately and the Company’s obligations under
this Agreement shall immediately expire.

     Notwithstanding the foregoing, the Company shall be obligated to pay to the Executive the
following:

	 	(a)	 	Base Salary through the Effective Date of Termination within thirty
(30) days following such Effective Date of Termination;
	 
	 	(b)	 	Subject to the Executive’s estate signing and not revoking a release of
claims satisfactory to the Company (a “Release”) within sixty (60) days following
the Effective Date of Termination, a prorated Target Annual Bonus Award based on
the Executive’s target bonus opportunity established for the year in which
termination of employment occurs. The prorated amount shall be determined as a
function of time within the year that has elapsed prior to the Executive’s
Effective Date of Termination and shall be paid no later than seventy (70) days
following the Effective Date of Termination; and
	 
	 	(c)	 	All other rights and benefits the Executive is vested in, pursuant to
other plans and programs of the Company. Such rights and benefits shall be paid or
provided, as applicable, in accordance with the terms of the applicable plan or
program.

     The Company and the Executive thereafter shall have no further obligations under this
Agreement.

     7.2 Termination Due to Disability. Subject to any applicable legal requirement, in the event
that the Executive becomes Disabled during the term of this Agreement, the Company shall have the
right to terminate the Executive’s active employment by giving the Executive written notice of such

7

 

termination. Upon the Effective Date of Termination, the Company’s obligations under this
Agreement shall immediately expire.

     Notwithstanding the foregoing, the Company shall be obligated to pay to the Executive the
following:

	 	(a)	 	Base Salary through the Effective Date of Termination (subject to an
offset for any disability payments that the Executive receives during this period)
within thirty (30) days following such Effective Date of Termination;
	 
	 	(b)	 	Subject to the Executive signing and not revoking a Release within
sixty (60) days following the Effective Date of Termination, a prorated Target
Annual Bonus Award based on the Executive’s target bonus opportunity established
for the year in which termination of employment occurs. The prorated amount shall
be determined as a function of time within the year that has elapsed prior to the
Executive’s Effective Date of Termination and shall be paid no later than seventy
(70) days following the Effective Date of Termination; and
	 
	 	(c)	 	All other rights and benefits the Executive is vested in, pursuant to
other plans and programs of the Company. Such rights and benefits shall be paid or
provided, as applicable, in accordance with the terms of the applicable plan or
program.

     With the exception of the covenants referenced in Article 10 (which survive the termination of
the Executive’s employment), after the payments and execution of the Release, the Company and the
Executive thereafter shall have no further obligations under this Agreement.

     7.3 Voluntary Termination by the Executive. The Executive may terminate this Agreement at any
time by giving the Company written notice of her intent to terminate, delivered at least sixty (60)
calendar days prior to the Effective Date of Termination; provided, however, that the Company may
waive all or a portion of such sixty (60) day notice period.

     Upon the Effective Date of Termination, the Company shall pay the Executive (a) her accrued
and unpaid Base Salary at the rate then in effect, through the Effective Date of Termination within
thirty (30) days following such Effective Date of Termination, plus (b) all other benefits to which
the Executive has a vested right as of the Effective Date of Termination pursuant to the terms and
conditions of the applicable plans and programs of the Company. With the exception of the covenants
referenced in Article 10 (which survive termination of the Executive’s employment), the Company and
the Executive thereafter shall have no further obligations under this Agreement.

     7.4 Termination by the Company without Cause or by the Executive with Good Reason unrelated to
a Change in Control. At all times during the term of this Agreement, the Company may terminate the
Executive’s employment for reasons other than death, Disability, or for Cause, by providing to the
Executive a Notice of Termination, at least sixty (60) calendar days prior to the Effective Date of
Termination. Such Notice of Termination shall be irrevocable absent express written, mutual consent
of the parties. Additionally, the Executive may terminate employment with the Company for Good
Reason by providing the Company with a Notice of Termination for Good Reason. The Notice of
Termination must set forth in reasonable detail the facts and circumstances claimed to provide a
basis for such Good Reason termination.

8

 

Upon the Effective Date of Termination, the Executive shall be entitled to:

	 	(a)	 	An amount equal to the Executive’s accrued and unpaid Base Salary through the
Effective Date of Termination within thirty (30) days following such Effective Date of
Termination.
	 
	 	(b)	 	Subject to the Executive signing and not revoking a Release within sixty (60) days
following the Effective Date of Termination:

	 	(i)	 	A lump sum payment equal to two (2) times the Executive’s Base Salary,
at the rate in effect on the Effective Date of Termination.
	 
	 	(ii)	 	A lump sum payment equal to one (1) times the Executive’s Target Annual
Bonus Award, at the targeted Annual Bonus Award in effect on the Effective Date of
Termination.
	 
	 	(iii)	 	A lump sum payment equal to the product of (a) the employer portion of
the monthly cost of the Executive’s medical and dental insurance benefits as of the
Effective Date of Termination (assuming the same coverage level as in effect as of
the Effective Date of Termination), multiplied by (b) twelve (12).

	 	 	 	Except as otherwise required by Section 7.7, the lump sum payments described in this
Section 7.4(b) shall be made by the Company no later than seventy (70) days following
the Effective Date of Termination. The Company shall provide the Release to the
Executive on or shortly after the Effective Date of Termination, and the Executive shall
execute the Release during the time period permitted by applicable law. 

	 	(c)	 	All other benefits to which the Executive has a vested right as of the Effective
Date of Termination, according to the provisions of the governing plan or program. Such
rights and benefits shall be paid or provided, as applicable, in accordance with the
terms of the applicable plan or program.

     With the exception of the covenants referenced in Article 10 (which survive the termination of
the Executive’s employment), after the payments and execution of the Release, the Company and the
Executive shall have no further obligations under this Agreement.

     7.5 Termination for Cause. Nothing in this Agreement shall be construed to prevent the Company
from terminating the Executive’s employment under this Agreement for Cause.

     In the event this Agreement is terminated by the Company for Cause, the Company shall pay the
Executive her Base Salary through the Effective Date of Termination within thirty (30) days
following such Effective Date of Termination, and the Executive shall immediately thereafter
forfeit all rights and benefits (other than vested benefits) she would otherwise have been entitled
to receive under this Agreement. With the exception of the covenants referenced in Article 10
herein (which survive the termination of the Executive’s employment), the Company and the Executive
shall have no further obligations under this Agreement.

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     7.6 Subsequent to a Change in Control, Termination by the Company without Cause or by the
Executive with Good Reason. If within two (2) years following a Change in Control, the Company
terminates the Executive’s employment for any reason other than death, Disability, or Cause or the
Executive terminates employment for Good Reason, the Company shall pay and provide to the
Executive:

	 	(a)	 	An amount equal to the Executive’s accrued and unpaid Base Salary through the
Effective Date of Termination within thirty (30) days following such Effective Date of
Termination.
	 
	 	(b)	 	Subject to the Executive signing and not revoking a Release within sixty (60) days
following the Effective Date of Termination:

	 	(i)	 	A lump sum payment equal to two (2) times the Executive’s annual Base
Salary, at the Base Salary amount in effect on the Effective Date of Termination;
	 
	 	(ii)	 	A lump sum payment equal to two (2) times the Executive’s Targeted
Annual Bonus Award, at the targeted Annual Bonus Award in effect on the Effective
Date of Termination;
	 
	 	(iii)	 	A lump sum payment that is equal to a prorated Targeted Annual Bonus
Award based on the Executive’s target bonus opportunity established for the fiscal
year in which termination of employment occurs. The prorated amount shall be
determined as a function of time within the fiscal year that has elapsed prior to
the Executive’s Effective Date of Termination; and
	 
	 	(iv)	 	A lump sum payment equal to the product of (a) the employer portion of
the monthly cost of the Executive’s medical and dental insurance benefits as of the
Effective Date of Termination (assuming the same coverage level as in effect as of
the Effective Date of Termination), multiplied by (b) twenty-four (24).

	 	 	 	Except as otherwise required by Section 7.7, the lump sum payments described in this
Section 7.6(b) shall be made by the Company within seventy (70) days following the
Effective Date of Termination. The Company shall provide the Release to the Executive
on or shortly after the Effective Date of Termination, and the Executive shall execute
the Release during the time period permitted by applicable law. 

	 	(c)	 	All other benefits to which the Executive has a vested right as of the Effective Date
of Termination, according to the provisions of the governing plan or program. Such rights
and benefits shall be paid or provided, as applicable, in accordance with the terms of the
applicable plan or program.

     With the exception of the covenants referenced in Article 10 (which survive the termination of
the Executive’s employment), after the payments and execution of the Release, the Company and the
Executive shall have no further obligations under this Agreement.

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     7.7 Required Postponement for Specified Executives.

	 	(a)	 	If the Executive is considered a Specified Executive and payment of any amounts under
this Agreement is required to be delayed for a period of six (6) months after a separation
from service pursuant to Section 409A of the Code, payment of such amounts shall be
delayed as required by Section 409A of the Code, and the accumulated postponed amounts,
with accrued interest as described in subsection (b) below, shall be paid in a lump sum
payment within five (5) days after the end of the six (6) month period. If the Executive
dies during the postponement period prior to the payment of such amounts, the amounts
postponed on account of Section 409A of the Code, with accrued interest as described in
subsection (b) below, shall be paid to the Executive’s Beneficiary within sixty (60) days
after the date of the Executive’s death.
	 
	 	(b)	 	If payment of any amounts under this Agreement is required to be delayed pursuant to
Section 409A of the Code, the Company shall pay interest on the postponed payments from
the date on which the amounts otherwise would have been paid to the date on which such
amounts are paid at an annual rate equal to the prime rate as announced on the Executive’s
Effective Date of Termination by JPMorgan Chase Bank on such date.

Article 8. Assignment

     8.1 Assignment by the Company. This Agreement may and shall be assigned or transferred

     to, and shall be binding upon and shall inure to the benefit of any successor company. For the
purposes of this Section 8.1, a “successor” shall include a purchaser of all of the equity of the
Company or all or substantially all of the assets or business of the Company. Any such successor
company shall be deemed substituted for all purposes of the “Company” under the terms of this
Agreement.

     Failure of the Company to obtain the agreement of any successor company to be bound by the
terms of this Agreement prior to the effectiveness of any such succession shall be a breach of this
Agreement, and an event constituting Good Reason (as described in Section 2.17). Except as herein
provided, this Agreement may not otherwise be assigned by the Company.

     8.2 Assignment by the Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive dies during the term of
this Agreement, the Company’s obligations to make payments or provide benefits are described
entirely in Sections 7.1 and 7.7 and all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement, to the Executive’s Beneficiary.

Article 9. Notice

     Any notices, requests, demands, or other communications provided by this Agreement shall be
sufficient if in writing and if sent by registered or certified mail to the Executive at the last
address she has filed in writing with the Company or, in the case of the Company, at its principal
offices.

Article 10. Confidentiality, Noncompetition, and Nonsolicitation

     This Agreement shall not supersede or nullify in any way the Employee Confidentiality,
Noncompetition, Nonsolicitation Agreement executed by the Executive on or about August 8, 2006 and,
if applicable, on subsequent dates. The Employee Confidentiality, Noncompetition,

11

 

Nonsolicitation Agreement shall remain in full force and effect and any requirements of such
agreement shall be incorporated by reference into this Agreement. The provisions of this Article 10
shall survive the termination of this Agreement and the termination of the Executive’s employment.

Article 11. Miscellaneous

     11.1 Entire Agreement. Unless otherwise specified herein, this Agreement supersedes any prior
agreements or understandings, oral or written, between the parties hereto or between the Executive
and the Company, with respect to the subject matter hereof, including any agreement relating to
severance pay, and constitutes the entire agreement of the parties with respect thereto. Nothing
in this Section 11.1 shall be construed, however, to supersede any prior award agreements between
the parties under Scotts’ equity-based incentive compensation plan.

     11.2 Amendment or Modification. This Agreement shall not be varied, altered, modified,
canceled, changed, or in any way amended except by mutual agreement of the parties in a written
instrument executed by the parties hereto or their legal representatives. Notwithstanding the
foregoing, the Company may amend the Agreement, to take effect retroactively or otherwise, as
deemed necessary or advisable for the purpose of conforming the Agreement to any present or future
law relating to agreements of this or similar nature (including, but not limited to, Section 409A
of the Code), and to the administrative regulations and rulings promulgated thereunder.

     11.3 Severability. In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and effect.

     11.4 Counterparts. This Agreement may be executed in one (1) or more counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and the same
Agreement.

     11.5 Tax Withholding. The Company may withhold from any benefits payable under this Agreement
all federal, state, city, or other taxes as may be required pursuant to any law or governmental
regulation or ruling.

     11.6 Beneficiaries. For the purposes of any payments or benefits due under Sections 7.1 and
7.7 of this Agreement, the Executive may designate one or more individuals or entities as the
primary and/or contingent Beneficiaries of any amounts to be received. Such designation must be in
the form of a signed writing acceptable to the Company. The Executive may make or change such
designation at any time. An acceptable form is attached hereto as Exhibit A. If no Beneficiary is
validly designated, then the benefits payable under this Agreement shall be paid to the Executive’s
surviving spouse or, if there is no surviving spouse, the Executive’s estate.

     11.7 Payment Obligation Absolute. All amounts payable by the Company hereunder shall be paid
without notice or demand. Subject to the covenants set forth in Article 10 and the terms of any
bonus, long-term incentive or other such plan or program, each and every payment made hereunder by
the Company shall be final, and the Company shall not seek to recover all or any part of such
payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever.

12

 

     The restrictive covenants referenced in Article 10 are independent of any other contractual
obligations in this Agreement or otherwise owed by the Company to the Executive. Except as provided
in this Section 11.7, the existence of any claim or cause of action by the Executive against the
Company, whether based on this Agreement or otherwise, shall not create a defense to the
enforcement by the Company of any restrictive covenant contained herein.

     11.8 Contractual Rights to Benefits. Subject to approval by the Company, this Agreement
establishes and vests in the Executive a contractual right to the benefits to which she is entitled
hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or
be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other
assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

     11.9 Specific Performance. The Executive acknowledges that the obligations undertaken by her
pursuant to this Agreement are unique and that the Company will likely have no adequate remedy at
law if the Executive shall fail to perform any of her obligations hereunder. The Executive
therefore confirms that the Company’s right to specific performance of the terms of this Agreement
is essential to protect the rights and interests of the Company. Accordingly, in addition to any
other remedies that the Company may have at law or in equity, the Company shall have the right to
have all obligations, covenants, agreements, and other provisions of this Agreement specifically
performed by the Executive and the Company shall have the right to obtain preliminary injunctive
relief to secure specific performance and to prevent a breach or contemplated breach of this
Agreement by the Executive.

     11.10 Voiding of Agreement Provision. If any provision under this Agreement causes an amount
to be considered deferred under Section 409A of the Code and as such become subject to income tax,
excise tax, or penalties under the Code prior to the time such amount is paid to the Executive,
such amount shall be deemed null and void with respect to such amount deferred and the Company may
amend or modify this Agreement in order to accomplish the objectives of the Agreement without
causing early taxation of such amounts and without the Company incurring additional cost or
liability.

Article 12. Governing Law

     To the extent not preempted by federal law, the provisions of this Agreement shall be
construed and enforced in accordance with the laws of the state of Ohio, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or interpretation of the
Agreement to the substantive law of another jurisdiction.

Article 13. Indemnification

     The Company hereby covenants and agrees to indemnify and hold harmless the Executive against
and in respect to any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses, losses, and damages resulting from the Executive’s performance of her duties and
obligations under the terms of this Agreement; provided however, the Executive acted in good faith
and in a manner she reasonably believed to be in or not opposed to the best interests of the
Company or its shareholders, and with respect to a criminal action or proceeding, the Executive had
no reasonable cause to believe her conduct was unlawful.

13

 

	 	 	 	 	 
	 

	 	Executive	 	 
	 
	 	 	 	 
	 

	 	/s/ Denise Stump
 

Denise Stump
	 	 
	 
	 	 	 	 
	 

	 	Date: 12/11/07	 	 
	 
	 	 	 	 
	 

	 	The Scotts Company LLC	 	 
	 
	 	 	 	 
	 

	 	/s/ James Hagedorn
 

James Hagedorn, Chief Executive Officer
	 	 
	 
	 	 	 	 
	 

	 	Date: 19 Nov 07	 	 

14

 

EXHIBIT A

THE SCOTTS COMPANY LLC

BENEFICIARY DESIGNATION FORM

RELATING TO CONTINGENT PAYMENTS UNDER THE EMPLOYMENT AGREEMENT

ENTERED INTO BETWEEN BY AND BETWEEN DENISE S. STUMP

AND THE SCOTTS COMPANY LLC

1.00 INSTRUCTIONS FOR COMPLETING THIS BENEFICIARY DESIGNATION FORM

You may use this Beneficiary Designation Form to (1) name the person you want to receive any amount
due under the Employment Agreement effective October 1, 2007, by and between Denise S. Stump and
The Scotts Company LLC (“Agreement”) after your death or (2) change the person who will receive
these benefits.

There are several things you should know before you complete this Beneficiary Designation Form.

FIRST, if you do not elect a beneficiary, any amount due to you under the Agreement when you die
will be paid to your surviving spouse or, if you have no surviving spouse, to your estate.

SECOND, your election will not be effective (and will not be implemented) unless you complete all
applicable portions of this Beneficiary Designation Form and return it with a signed copy of the
Agreement to the legal department.

THIRD, all elections will remain in effect until they are changed (or until all death benefits are
paid).

FOURTH, this beneficiary designation supersedes and revokes all other beneficiary designations with
respect to payments under the Agreement.

2.00 DESIGNATION OF BENEFICIARY

	 	 	 	 	 
	 
	 	 	 	 
	2.01

	 	PRIMARY BENEFICIARY:	 	 
	 
	 	 	 	 
	I designate the following person as my Primary Beneficiary to receive any amount due after my death
under the Agreement:	 	 
	 
	 	 	 	 
	 	 	 
	(Name)                                                             (Relationship)	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 
	 
	 	 	 	 
	2.02

	 	CONTINGENT BENEFICIARY:	 	 
	 
	 	 	 	 
	If my Primary Beneficiary dies before I die, I direct that any amount due after my death under the
terms of the Agreement be distributed to:	 	 
	 
	 	 	 	 
	 	 	 
	(Name)                                                             (Relationship)	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 

 

 

Elections made on this Beneficiary Designation Form will be effective only after this Form is
received by the legal department and only if it is fully and properly completed and signed.

Denise S. Stump

	 	 	 	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Sign and attach this Beneficiary Designation Form to the Agreement.	 	 

	 	 	 	 	 
	 
	 	 	 	 
	 

Date

	 	 

Signature
	 	 

To be Completed by the Company:

	 	 	 	 	 
	Received on:
	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 

2EX-10.1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, entered into as of this 9th day of December, 2007, by and between:

DONITA R. KOVAL

(the “Officer”),

and

FIRST NATIONAL BANK OF PENNSYLVANIA

(the “Company”),

WITNESSETH THAT:

WHEREAS, Omega Financial Corporation (“Omega”) contemplates a consummation of an Agreement and Plan
of Merger among F.N.B. Corporation (“FNB”) and Omega (“Merger Agreement”) whereby Omega will be
merged with FNB (“Merger”); and

WHEREAS, the Officer is presently employed by Omega and the Company desires to assure itself of the
continued benefit of the Officer’s services and experience following consummation of the proposed
Merger, and the parties desire that said employment relationship continue upon the terms and
conditions herein set forth;

WHEREAS, as additional consideration for this Employment Agreement the parties desire to terminate
the December 23, 2003, Employment Agreement and forever rescind all obligations thereunder; and

WHEREAS, the Officer is willing to commit herself to serving the Company on the terms and
conditions provided in this Agreement.

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

SECTION 1 Recitals.

The foregoing recitals are incorporated by reference as if fully set forth herein.

Page 1

 

SECTION 2 Term of Agreement.

	(a)	 	Initial Term. The term of employment of the Officer under this Agreement shall be,
initially, a two (2) year term commencing on the date of consummation of the Merger (the
“Commencement Date”) and ending on the second anniversary of the Commencement Date (the
“Termination Date”). Said term shall be subject to automatic extension by operation of the
provisions of Section 2(b) hereof.
	 
	(b)	 	Renewal Extension Term. On the first anniversary of the Commencement Date and on
each succeeding anniversary date thereafter (“Renewal Commencement Date”), the term of
employment of the Officer under this Agreement shall be automatically extended for one (1)
additional year, thereby extending the contract to the second anniversary of the Renewal
Commencement Date, unless either party shall have elected to fix the expiration date of the
Officer’s term of employment.
	 
	(c)	 	Termination of Automatic Renewal.

	 	(1)	 	Each of the parties shall have the right to terminate the automatic renewal by
written notice 60 days prior to the Renewal Commencement Date and thereby fix the
expiration of the term of the Agreement under this Section;
	 
	 	(2)	 	If either party provides a notice of termination of automatic renewal to
the other, the term of the Agreement of the Officer under this Section shall continue
until the later of:

	 	(c)	 	the Termination Date of the Initial Term as described in
Section 2(a) herein; or
	 
	 	(d)	 	the anniversary as determined by the Renewal Commencement Date
as described in Section 2(b) herein.

	 	(3)	 	Said term shall not continue after December 31, 2026 whether or not such notice
shall have been given in the year 2026 as aforesaid.

	(d)	 	Examples of Operation of this Section. The following are offered merely by way
of illustration, and strictly for purposes of providing examples of the operation of Section
2(a) (Initial Term) and (b) (Renewal Extension Term) of this Agreement:
	 
	 	 	Example of Initial Term: In the event the Commencement Date is April 1, 2008, the
Initial Term is April 1, 2008, to March 31, 2010;
	 
	 	 	Example of Renewal Extension Term: The Renewal Extension Term of this
Agreement will automatically renew for an additional one (1) year term on April 1, 2009, and
on each April 1st thereafter for an additional one (1) year term; therefore, on

Page 2

 

	 	 	April 1, 2009, the Renewal Extension Term runs from April 1, 2009 to March 31, 2011; and
	 
	 	 	Example of Non-Renewal: In the event written notice of non-renewal is provided to
the employee prior to February 1, 2009 (or any February 1st thereafter), the term
of this Agreement will end on April 1, 2010 (or any April 1st thereafter).

SECTION 3 Compensation.

In consideration for services rendered to the Company under this Agreement, the Company shall pay
and provide to the Officer the following compensation and benefits:

	 	(a)	 	Salary. The Company shall pay Officer an annual minimum base salary of
$225,000 to be paid in accordance with the Company’s normal payroll practice to be
adjusted from time to time to reflect such merit increases as the Company may determine
are appropriate.
	 
	 	(b)	 	Participation in Performance and Incentive Compensation and Bonus Plans. At
the discretion of the Compensation Committee of F.N.B. Corporation, the Officer shall
be entitled to participate in incentive compensation and such other bonus plans
comparable to those given to similarly-positioned officers of the Company or its
present or future subsidiaries or affiliates only during the term of Officer’s
employment with the Company at the level 3 for annual incentive compensation.
	 
	 	(c)	 	Fringe Benefits.

	 	(1)	 	The Officer shall be entitled to vacations, retirement benefits
and other fringe benefits, including but not limited to group life, disability
and health insurance coverages comparable with those furnished to similarly
positioned officers of the Company and consistent with the prevailing
compensation policies and practices of the Company (now and in the future) as
they may change from time to time, with respect to similarly-positioned
officers of the Company or its present or future subsidiaries or affiliates.
	 
	 	(2)	 	The Company shall provide the Officer with an automobile or automobile
allowance consistent with Company’s policies.
	 
	 	(3)	 	The Company shall pay the annual dues for the Officer’s
membership in one country club of the Officer’s choosing. In addition, the
Company shall pay any

Page 3

 

	 	 	 	reasonable club usage charges related to the Company’s business upon submission
by the Officer of appropriate verifying information.

SECTION 4 Resignation.

If the Officer voluntarily resigns as an officer or employee of the Company or its significant
present or future subsidiaries or affiliates, the Officer shall no longer be considered an employee
for any purpose and the Officer shall not be entitled to any separation pay, compensation, or
benefits after the effective date of the Officer’s resignation. Notwithstanding the foregoing,
nothing contained herein shall affect the Officer’s vested rights, if any.

SECTION 5 Death.

If the Officer dies during Officer’s employment with Company, the Officer’s heirs and estate are
not entitled to any Separation Pay under the terms of this Agreement.

SECTION 6 Disability.

	 	(a)	 	The term of employment of the Officer under this Agreement may be terminated at
the election of the Company upon a determination by the Board of Directors of the
Company, in its sole discretion, that the Officer will be unable by reason of physical
or mental incapacity to perform the reasonably-expected duties assigned to her pursuant
to this Agreement for a period longer than six consecutive months or more than nine
months in any consecutive twelve-month period;
	 
	 	(b)	 	The Board of Directors shall give due consideration to such factors as it deems
appropriate to the best interests of the Company, including, but not limited to, the
opinion of the Officer’s personal physician or physicians and the opinion of any
physician or physicians selected by the Board of Directors for these purposes;
	 
	 	(c)	 	The Officer shall submit to examination by any physician(s) so selected by the
Board of Directors, and shall otherwise cooperate with the Board of Directors in making
its determination contemplated hereunder (such cooperation to include, without
limitation, consenting to the release of information by any such physician(s) to the
Company);
	 
	 	(d)	 	In the event of such termination, the Company shall thereupon be relieved of
its obligations to pay compensation and benefits under Section 3 hereof (except for
accrued and unpaid items) but shall be obligated to pay or provide to the Officer
all rights and benefits available under the Company’s officer disability policy.

SECTION 7 Termination for Proper Cause.

Page 4

 

	 	(a)	 	The occurrence of any of the following events or circumstances shall constitute
“Proper Cause” for termination, at the election of the Board of Directors of the
Company, of the employment of the Officer under this Agreement:

	 	(1)	 	the perpetration of defalcations by the Officer involving the
Company or any of its present or future subsidiaries or affiliates, or willful,
reckless or grossly negligent conduct of the Officer entailing a substantial
violation of any material provision of the laws, rules, regulations or orders
of any governmental agency applicable to the Company or its subsidiaries and
affiliates;
	 
	 	(2)	 	the repeated and deliberate failure by the Officer, after
advance written notice, to comply with reasonable policies or directives of the
Board of Directors, President, any executive officer or the Officer’s immediate
supervisor; or
	 
	 	(3)	 	the Officer shall breach this Agreement in any other material
respect which breach is not cured in all material respects to the reasonable
satisfaction of the Company within 30 days following written notice of such
breach to the Officer by the Company.

	 	(b)	 	If Company terminates the Officer for Proper Cause, the Officer shall not be an
employee nor shall the Officer be entitled to any separation pay, compensation, or
benefits after the effective date of the Officer’s termination. Notwithstanding the
foregoing, nothing contained herein shall affect the Officer’s vested rights, if any.

Page 5

 

SECTION 8 Termination Without Cause.

	 	(a)	 	Separation Pay. Company may terminate this Agreement at any time whether or
not such termination constitutes “Proper Cause” as defined in Section 7 hereof. In the
event Company terminates this Agreement without Proper Cause as defined in Section 7
hereof:

	 	(1)	 	The Officer shall not be considered an employee after the
effective date of the termination.
	 
	 	(2)	 	Company shall pay to Officer an amount equal to two (2) times
Officer’s annual salary at the time of termination (“Separation Pay”).
	 
	 	(3)	 	Company shall pay the Officer the Separation Pay over a period
of twenty-four (24) months in equal installments less all withholdings required
by law and authorized deductions, at intervals consistent with Company payroll
practices.
	 
	 	(4)	 	Officer will not be entitled to receive any benefits or bonuses
described in Section 3(b) and (c) hereof.
	 
	 	(5)	 	Officer will be entitled to receive such Separation Pay only if
the Officer executes and does not revoke a Release of all claims and
liabilities in form prescribed by Company.
	 
	 	(6)	 	Following termination without cause, Officer is entitled to
elect insurance coverage under the Consolidated Omnibus Budget Reconciliation
Act (COBRA) for a period of up to eighteen (18) months following officers
termination, and Company shall be obligated to pay on behalf of Officer the
monthly premium cost for Officer’s health/medical coverage under COBRA, less
the same contribution as required by employee’s group life and health insurance
coverages pursuant to the prevailing policies and practices of the Company (now
and in the future) with respect to similarly positioned officers of the Company
or its present or future subsidiaries or affiliates.
	 
	 	(7)	 	Nothing herein shall restrict the Officer’s vested rights, if any,
pursuant to Company’s 401(k) Plan, Retirement Income Plan, Basic Retirement
Plan, 2001 Incentive Plan, or any similar plans. Notwithstanding the Officer
receiving any payments under the

Page 6

 

	 	 	 	terms of this Section, on the date of the Officer’s termination, all vesting,
for purposes of the Company’s 401(k) Plan, Retirement Income Plan, Basic
Retirement Plan, 2001 Incentive Plan, or other such plans, shall cease.

	 	(b)	 	Suspension of Separation Pay. Without limitation of the Company’s rights and
remedies under this Agreement or as otherwise provided by law or in equity, it is
understood and agreed between the parties that the right of the Officer to receive and
retain any payments otherwise due under this Agreement shall be suspended and canceled
if and for so long as Officer shall be in violation of this Agreement. If and when the
Officer shall have cured such violation within twenty (20) days of receipt of written
notice from Company and shall have tendered to the Company any and all economic
benefits directly or indirectly received or receivable by the Officer arising
therefrom, the Officer’s right to receive payments under this Agreement shall be
automatically reinstated but only for the remainder of the period during which such
payments are due her.
	 
	 	(c)	 	Termination of Separation Pay. Notwithstanding the foregoing or any other
provision of this Agreement, the Officer shall not be entitled to any further
separation payments and the separation pay period shall end upon the occurrence of any
of the following:

	 	(1)	 	Officer files a claim, suit or submits any matter to
arbitration in violation of the Release executed in connection with Section
8(a)(5) hereof.
	 
	 	(2)	 	Officer violates any term or condition of this Agreement,
including, but not limited to, the Non-Competition, Non-Solicitation and
Confidentiality provisions of this Agreement.
	 
	 	(3)	 	Officer’s misappropriates any trade secrets.
	 
	 	(4)	 	Company learns that the Officer committed a material breach of
the Agreement during the terms of this Agreement.

SECTION 9 Change of Control.

A Change of Control (“Change of Control”) shall be defined as any merger or consolidation of
F.N.B. Corporation with another corporation, and as a result of such merger or consolidation, the
shareholders of F.N.B. Corporation as of the day preceding such

Page 7

 

transaction will own less than fifty-one percent (51%) of the outstanding voting securities of the
surviving corporation, or in the event that there is (in a single transaction or series of related
transactions) a sale or exchange of eighty percent (80%) or more of the Common Stock of F.N.B.
Corporation for securities of another entity in which shareholders of F.N.B. Corporation will own
less than fifty-one percent (51%) of such entity’s outstanding voting securities, or in the event
of the sale by F.N.B. Corporation of a substantial portion of its assets (including the capital
stock F.N.B. Corporation owns in its subsidiaries) to an unrelated third party.

SECTION 10 Resignation For Good Reason.

	 	(a)	 	Severance. In the event of a Change of Control, upon 30 days prior written
notice to the Company, the Officer shall be entitled to terminate her employment under
this Agreement and resign her position provided such resignation is for Good Reason as
defined in this section and provided that such written notice shall have been delivered
to the Company within 30 days of the event which the Officer lists as Good Reason.
Such resignation with Good Reason shall be deemed to be a termination without Proper
Cause and the Officer and the Company shall have the respective rights and obligations
set forth in Section 8.
	 
	 	(b)	 	Good Reason. Good Reason shall mean without the Officer’s written consent:

	 	(1)	 	a material diminution of the Officer’s base salary;
	 
	 	(2)	 	a material diminution of the Officer’s authority, duties, or
responsibilities;
	 
	 	(3)	 	a relocation of the Officer’s primary office more than 50 miles
from the State College, Pennsylvania, metropolitan area.

	 	(c)	 	Cure. Notwithstanding Section 10(a) above, the Company shall have a period of
30 days during which it may remedy the condition.

SECTION 11 Non-Competition.

	 	(a)	 	For purposes of this Agreement, reference to the term “Competitive Enterprise”
shall mean any bank holding company, finance company or insured depository institution
(including an institution in the organization stage or in the process of applying for
or receiving appropriate regulatory approval), including, without limitation, any
federal or state chartered bank, savings bank, savings and loan association, credit
union or other financial services provider or non-banking affiliate thereof offering
similar services or products as those offered by the Company to its customers.

Page 8

 

	 	(b)	 	During the term of this Agreement and during the two (2) year period
immediately following termination of Officer’s employment (which may include, without
limitation, Officer’s resignation or any event specified in Sections 7 and 8 hereof)
(hereinafter referred to as “Restricted Period”), the Officer shall not:

	 	(1)	 	accept a position as director, employee, consultant, advisor or
agent of any Competitive Enterprise which is located in any county in the
Company’s region to which Officer is assigned at the time of Officer’s
termination of employment and any contiguous county and any county in the
Company’s region to which Officer was assigned 24 months prior to Officer’s
termination of employment.
	 
	 	(2)	 	acquire an ownership interest (individually or in concert with
others) in a Competitive Enterprise whereby said ownership interest enables
Officer to, directly or indirectly, in any manner, control, direct, influence,
affect or impact the operations, services or business activities of the
Competitive Enterprise in any county, or county contiguous thereto, in which
Company or its subsidiaries operate an office at the time of Officer’s
termination of employment;

SECTION 12 Non-Solicitation.

During the Restricted Period the Officer shall not:

	 	(a)	 	in any way, directly or indirectly, for the purpose of selling
any product or service that competes with a product or service offered by the
Company or its present or future subsidiaries or affiliates, solicit, divert,
or entice:

	 	(1)	 	any customer or existing business of Company,
with whom the Officer solicited, became aware of, or transacted
business during Officer’s employment with Company;
	 
	 	(2)	 	any potential customer or business identified
by Company, with whom the Officer solicited, became aware of, or
transacted business during Officer’s employment with Company;

	 	(b)	 	accept or provide assistance in the accepting of (including, but not
limited to providing any service, information, assistance or other facilitation
or other involvement) business, patronage or orders from customers or any
potential customers of Company with whom the Officer has had contact,
involvement or responsibility during the term of this Agreement.
	 
	 	(c)	 	employ or assist in employing any present employee of the
Company or any of its affiliates (whether or not such employment is full time
or is pursuant to a written contract), for the purpose of having such employee
perform services for any Competitive Enterprise or other organization in
competition with the

Page 9

 

	 	 	 	business of the Company or any of its present or future subsidiaries or
affiliates;
	 
	 	(d)	 	in any way, directly or indirectly, make any oral or written
statement, comments, or other communications designed or intended to impugn,
disparage or otherwise malign the reputation, ethics, competency, morality or
qualifications of the Company or any of its directors or employees or
customers.

SECTION 13 Confidentiality.

	 	(a)	 	For purposes of this Agreement, “Proprietary Information” shall mean any
information relating to the business of the Company or any of its present or future
subsidiaries or affiliates that has not previously been publicly released by authorized
representatives of the Company or any authorized representatives of any of its present
or future subsidiaries or affiliates, and shall include (but shall not be limited to)
Company information encompassed in all marketing and business plans, financial
information, costs, pricing information, customer and client lists and relationships
between Company and dealers, distributors, sales representatives, wholesalers,
customers, clients, suppliers, and others who have business dealings with Company, and
all methods, concepts, or ideas in or reasonably related to the business of the Company
or any of its present or future subsidiaries or affiliates and not in the public
domain.
	 
	 	(b)	 	The Officer agrees to regard and preserve as confidential all Proprietary
Information that has been or may be developed or obtained by the Officer in the course
of Officer’s employment with the Company and its subsidiaries and affiliates, whether
Officer has such information in Officer’s memory, writing, electronic media or other
physical form, including information maintained by Officer on any computer, electronic
device, or other personal property owned by Officer. The Officer shall not, without
written authorization from the Company, use for Officer’s benefit or purposes, nor
disclose to others at any time, either during the term of Officer’s employment or
thereafter, except as required by the conditions of Officer’s employment hereunder, any
Proprietary Information connected with the business or development of the Company or
its subsidiaries or affiliates. This prohibition shall not apply after the Proprietary
Information has been voluntarily disclosed to the public, independently developed and
disclosed by others, or otherwise enters the public domain through lawful means.

SECTION 14 Removal of Documents or Objects.

The Officer agrees not to remove from the premises of the Company or any of its present or future
subsidiaries or affiliates, except as an employee of the Company in pursuit of the business of the

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Company or any of its present or future subsidiaries or affiliates, or except as specifically
permitted in writing by the Company, any document or object containing or reflecting any
Proprietary Information. The Officer recognizes that all such documents, tangible and intangible
property and objects, whether developed by her by someone else, are the exclusive property of the
Company.

SECTION 15 Remedies.

In addition to any other rights and remedies Company may have if Officer violates this Agreement,
the Company and Officer agree as follows:

	 	(a)	 	It is understood and agreed by and between the parties hereto that the services
to be rendered by the Officer hereunder are of a special, unique, extraordinary and
intellectual character, which gives them a peculiar value, the loss of which may not be
reasonably or adequately compensated in damages, and additionally that a breach by the
Officer of the covenants set out in Sections 11, 12, 13 and 14 of this Agreement will
cause the Company great and irreparable injury and damage. The Officer hereby
expressly agrees that the Company shall be entitled to the remedies of injunction,
specific performance and other equitable relief to prevent a breach of Sections 11, 12,
13 and 14 of this Agreement by the Officer. This provision shall not, however, be
construed as a waiver of any of the remedies which the Company may have for damages or
otherwise.
	 
	 	(b)	 	In the event Officer shall be in violation of any of the aforementioned
restrictive covenants, the time limitation thereof with respect to them shall be
extended for a period of time equal to the period of time during which breach or
breaches should occur; and in the event the Company should be required to seek relief
from such breach in any court, board of arbitration or other tribunal, the covenants
shall be extended for a period of time equal to the pendency of such proceedings,
including appeals.

SECTION 16 Subsidiaries and Affiliates.

It is understood and agreed by the parties hereto that, at the election and direction of the
Company’s Board of Directors and without modification of the terms and provisions hereof, the
Officer may be required to serve as an officer of any one or more present or future subsidiaries or
affiliates of the Company and, when and as so determined by the Board and any such subsidiary or
affiliate, the rights, duties and obligations of the Officer and Company expressed and implied in
this Agreement shall inure to the benefit of and bind any such subsidiary or affiliate with the
same force and effect as would be obtained if the subsidiary or affiliate were a party hereto
jointly and severally with the Company.

SECTION 17 Successors, Assigns, Etc.

	 	(a)	 	This Agreement shall be binding upon, and shall inure to the benefit of, the
Officer and the Company and their respective permitted successors, assigns, heirs,
legal representatives and beneficiaries.

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	 	(b)	 	Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge or hypothecation or to execution, attachment, levy, or
similar process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no effect; provided,
however, that nothing in this Section shall preclude the assumption of such rights by
executors, administrators or other legal representatives of the Officer or Officer’s
estate and their assigning any rights hereunder to the person or persons entitled
thereto.
	 
	 	(c)	 	Nothing in this Agreement shall preclude the Company from consolidating or
merging into or with or transferring all or substantially all of its assets to another
corporation which assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or transfer of assets and
assumption the term “Company” as used herein shall mean such other corporation and this
Agreement shall continue in full force and effect.

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SECTION 18 Notices.

	 	(a)	 	All notices and other communications which are required or may be given under
this Agreement shall be in writing and shall be deemed to have been given on the date
delivered personally or if sent by registered or certified mail, return receipt
requested, postage prepaid, on the date deposited in the mail.
	 
	 	(b)	 	All notices shall be provided to the following address or to such other place
as either party shall have specified by notice in writing to the other:

	 	(1)	 	To the Company, at the address designated as its headquarters,
Attention: CEO. With a copy to F.N.B. Corporation, One F.N.B. Boulevard,
1st Floor, Hermitage, Pennsylvania 16148, Attention: Corporate
Counsel.
	 
	 	(2)	 	To the Officer, at his/her address provided to Company from
time to time for salary and other similar purposes.

SECTION 19 Governmental Regulation.

Nothing contained in this Agreement shall be interpreted, construed or applied to require the
commission of any act contrary to law and whenever there is any conflict between any provision of
this Agreement and any statute, law ordinance, order or regulation, the latter shall prevail; but
in such event any such provision of this Agreement shall be curtailed and limited only to the
extent necessary to bring it within applicable legal requirements.

SECTION 20 Arbitration.

Any dispute or controversy as to the validity, interpretation, construction, application or
enforcement of, or otherwise arising under or in connection with this Agreement, shall be submitted
at the request of either party hereto for resolution and settlement through arbitration in
Pennsylvania in accordance with the rules then prevailing of the American Arbitration Association.
Any award rendered therein shall be final and binding on each of the parties hereto and their
heirs, executors, administrators, successors and assigns, and judgment may be entered thereon in
any court having jurisdiction. The foregoing provisions of this paragraph shall not be deemed to
limit the rights and remedies reserved to the Company under and pursuant to Section 15 hereof which
rights and remedies may be pursued through arbitration.

SECTION 21 Indemnification.

The Officer shall at all times during her employment by Company and thereafter, be
indemnified by the Company to the fullest extent permitted by applicable law for any matter in any
way relating to the Officer’s affiliation with the Company, or its affiliates; provided, however,
that if the Officer’s employment shall be terminated by the Company for Proper Cause, then, to the
extent indemnification is prohibited by law, the Company shall have no obligation whatsoever to
indemnify the Officer for any claim arising out of the matter for which her employment shall have
been terminated for Proper Cause or for any conduct of the Officer not within the scope of the
Officer’s duties under this Agreement.

SECTION 22 Governing Law.

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

SECTION 23 Divisibility.

Should a court or arbitrator declare any provision hereof to be invalid, such declaration shall not
affect the validity of the Agreement as a whole or any part thereof, other than the specific
portion declared to be invalid.

SECTION 24 Headings.

The headings to the Sections and paragraphs hereof are placed herein for convenience of reference
only and in case of any conflict the text of this Agreement, rather than the headings, shall
control.

SECTION 25 Entire Agreement; Amendment.

This Agreement sets forth the entire understanding of the parties in respect of the subject matter
contained herein and supersedes all prior agreements, arrangements and understandings relating to
the subject matter and may only be amended by a written agreement signed by both parties hereto or
their duly-authorized representatives.

[the remainder of this page intentionally left blank]

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

	 	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Daniel Warfel	 	 	 	/s/ Donita R. Koval	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Donita R. Koval	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	First National Bank of Pennsylvania	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Charles C. Casalnova
 

Assistant Secretary

	 	 
	 	By:

Name:
	 	/s/ Stephen J. Gurgovits
 

Stephen J. Gurgovits
	 	 
	 

	 	 	 	Title:
	 	President	 	 

Page 15

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