Document:

Employment Agreement between Susquehanna Bancshares, Inc. and James G. Pierne

 Exhibit 10.4 
  
 EMPLOYMENT AGREEMENT 
  
 AGREEMENT made as of this 25th day of March, 2005, by and between SUSQUEHANNA BANCSHARES, INC., a Pennsylvania corporation (the
“Company”), and FARMERS & MERCHANTS BANK AND TRUST, a Maryland state chartered bank and a wholly-owned subsidiary of the Company (the “Bank”), on the one side, and JAMES G. PIERNE, an adult individual whose
principal residence is at 19733 Spring Creek Road, Hagerstown Maryland 21742 (the “Employee”), on the other side. 
  
 Background 
  
 The Company and the Bank desire to induce the Employee to remain in the Bank’s employment, and the Employee hereby agrees to accept continuation of
employment with the Bank on the terms and subject to the conditions hereinafter set forth. 
  
 1. Position. The Company hereby agrees to cause the Bank to continue the Employee’s employment, the Bank hereby agrees to continue the Employee’s employment, and the Employee hereby agrees to continue
employment with the Bank, as Chairman of the Board of the Bank, and Senior Vice President of the Company. 
  
 2. Duties. 
  
 2.1. The Employee agrees to assume such duties and responsibilities as may be consistent with the position of Chairman of the Board of the Bank, and
Senior Vice President of the Company, and as may be assigned to the Employee by the Board of Directors, the President or the Chief Executive Officer of the Bank or the Company or by the by-laws of the Bank or the Company, from time to time. No
change in the duties of the Employee shall in any way diminish the compensation payable to him or her pursuant to the provisions of paragraph 4 hereof. 

 2.2. The Employee agrees to devote his or her full time, skill, attention and energies, and his or her
best efforts to the performance of his or her duties under this Agreement consistent with practices and policies established from time to time by the Company and the Bank. The Employee agrees, in addition to the covenants concerning Non-Competition
contained in Paragraph 14, that he or she will not engage in any other business activity (including, without limitation, participation by the Employee on any unaffiliated profit or non-profit board of directors) except: (i) upon the prior written
notice to and consent of the Bank’s Board of Directors, or (ii) solely as an investor in real or personal property, the management of which shall not detract from the performance of his or her duties hereunder; provided, however, that the
engagement by the Employee in any such business activity shall at all times be in conformity with the Bank’s Code of Conduct, as the same may be amended or supplemented from time to time. Notwithstanding anything herein to the contrary, the
Employee shall terminate any such activity upon reasonable request by the Company. 
  
 3. Period of Employment. Unless terminated earlier pursuant to subparagraph 7.3, 10.1, 10.2, 10.3, 10.5 or 10.7 hereof, the period of employment (the “Period of Employment”) shall commence on the date
of this Agreement and end on the second December 31 next following the date of this Agreement (the “Termination Date”). If written election not to renew by either party is not received by the other party by (a) November 1 of the year of
the effective date of this Agreement, or (b) November 1 any subsequent year, if this Agreement has previously been extended pursuant to this paragraph 3, then the Period of Employment will be automatically extended to the next anniversary of the
Termination Date. 
  

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 4. Compensation. For all services rendered by the Employee under this Agreement, the Company shall
pay, or shall cause the Bank to pay, to the Employee compensation as provided below: 
  
 4.1. Base Salary. Commencing on the date hereof and continuing for the next twelve (12) months of employment hereunder, the Company shall pay, or shall cause the Bank to pay, the Employee, in equal monthly
installments, a minimum base salary at the rate of $201,484.00 per year. In connection with the annual review required by subparagraph 4.3 hereof, the Employee’s base salary shall be reviewed and in light of such review may be increased (but
not decreased), taking into account any change in the Employee’s responsibilities, performance of the Employee and other pertinent factors. Payment of any increase in the Employee’s base salary (if any) shall commence no later than July
1st of the year in which the increase is granted. 
  
 4.2. Bonus. The Company or the Bank may but shall not be required to pay to the Employee annual bonus compensation in
such amount as may be determined by the appropriate Board of Directors or its designee within guidelines established by the Company. Such bonus shall not exceed the amount of the Employee’s base compensation. 
  
 4.3. Annual Review. The determination of compensation payable by the
Company or the Bank hereunder shall be made by the Compensation Committee of the Company, or its nominee, which shall perform an annual review of this Agreement, the Employee’s performance with the Bank, and compensation payable hereunder. In
such annual review, the Compensation Committee shall consider the recommendations of the Bank’s Board of Directors. The results of such review, including recommendation as to salary adjustment and bonus, shall be reported to the Company and
shall be memorialized in the minutes of the meetings of the Bank’s Board of Directors or held in a confidential file by the Bank’s or the Company’ s Human Resources Department. 
  

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 5. Employee Expenses. Subject to such general employee expense account policies as the Company and
the Bank may from time to time adopt, the Company, or the Bank, as the case may be, will pay or reimburse the Employee upon presentation of vouchers or invoices for reasonable expenses incurred by the Employee in the performance of his or her duties
in carrying out the terms and provisions of this Agreement, including, without limitation, expenses for such items as entertainment, travel, meals, hotel and similar items. In the event that any reimbursed expenses are disallowed by the Internal
Revenue Service as deductions to the Company or the Bank, as the case may be, the Employee shall retain such reimbursed expense amounts which the Employee shall treat and report as additional compensation and which the Company or the Bank, as the
case may be, shall treat as deductible salary expense. 
  
 The
Bank also shall provide the Employee during his or her employment under this Agreement with the full time use of a car selected by the Employee and comparable to the car available at present. Such car shall be used by the Employee in accordance with
any and all general car policy(ies) as the Company and the Bank may from time to time adopt. Such car shall be selected, maintained and replaced in accordance with the Bank’s general policy on cars for employees having need of a car for such
use. 
  
 6. Vacations. The Employee will be entitled to
paid vacation annually as specified under the Company’s Vacation Policy, to be taken at times reasonably convenient to the Company and the Bank. 
  

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 7. Benefits. 
  
 7.1. The Employee shall be entitled to group term life insurance insuring the Employee’s life during the term of
employment, disability insurance coverage, and accidental death and dismemberment benefits, including death benefit, in such amounts and in such coverage as shall be consistent with the insurance coverage programs available to other salaried
employees of the Bank, as the same may change from time to time. The Employee shall designate the beneficiary of such policy and benefits. 
  
 7.2. The Employee shall be entitled to major medical and health insurance coverage for the Employee and his or her immediate family on such terms, in such
amounts and in such coverage as shall be consistent with the insurance coverage programs available to other salaried employees of the Bank generally, as the same may change from time to time. 
  
 7.3. If the Employee becomes and continues to be permanently disabled, such
disability to be defined as the Employee’s inability, as a result of illness, incapacity, disease or calamity to perform a substantial part of his or her reasonable duties as set forth herein, with no reasonable expectation that the Employee
will be able to resume the performance of his or her reasonable duties, the Company shall continue to pay, or shall cause the Bank to pay, to the Employee the base salary set forth in paragraph 4, above, and, except as provided in the next sentence
of this paragraph, all other benefits as set forth in this Agreement for a period of no less than six (6) months following the commencement of such permanent disability. Any provision of this Agreement notwithstanding, the Employee shall be
conclusively deemed to be permanently disabled if he or she is physically or mentally unable to perform his or her duties or a substantial part thereof for a period of six consecutive months. The Employee shall have no right to earn any bonus
compensation during such period of time. Thereafter, if such permanent 

  

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disability continues, this Agreement shall terminate and the Company and the Bank (i) shall have no further obligation to the Employee under this Agreement
other than in connection with such benefits as may be available under such disability insurance programs, and (ii) shall not be obligated to provide or pay for any benefits under the programs or policies listed in subparagraphs 7.1 and 7.2 above,
except as provided in subparagraph 10.11. 
  
 7.4. To the extent
such benefits are not specifically described or duplicated hereinabove in this paragraph 7, the Employee shall also be entitled to participate in any and all thrift, profit sharing, benefit and pension and similar plans, now or hereafter maintained
by the Company or the Bank and offered by the Company or the Bank to its salaried, non-union employees generally; provided, however, that if such participation in any such plan is terminated by the Bank’s or the Company’s Board of
Directors, or any committee thereof, then the Employee shall have no automatic entitlement to participate in the same. 
  
 8. Confidential Information. During the term of employment, and at any time thereafter, the Employee shall not, without the consent of a senior
officer of the Company, disclose to any person, firm or corporation (except, during the term of his or her employment, to the extent necessary to perform his or her duties hereunder) any customer lists, trade secrets, reports, correspondence,
mailing lists, manuals, price lists, employee lists, prospective employee lists, letters, records or any other confidential information relating to the business of the Company or the Bank or any Affiliate of the Company and shall not, without the
consent of a senior officer of the Company, deliver any oral address or speech or publish, or knowingly permit to be published, any written matter in any way relating to confidential information regarding the business of the Company or the Bank or
any Affiliate of the Company. 
  

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 9. Property Rights. The Employee agrees that all literary work, copyrightable material or other
proprietary information or materials developed by the Employee during the term of this Agreement and relating to, or capable of being used or adopted for use in, the business of the Company or the Bank shall inure to and be the property of the
Company or the Bank and must be promptly disclosed to the Company or the Bank, as the case may be. Both during employment by the Company and the Bank, and thereafter, the Employee shall, at the expense of the Company or the Bank, as the case may be,
execute such documents and do such things as the Company or the Bank reasonably may request to enable the Company or the Bank or their nominee (i) to apply for copyright or equivalent protection in the United States, Canada and elsewhere for any
literary work hereinabove referred in this paragraph, or (ii) to be vested with any such copyright protection in the United States, Canada and elsewhere. 
  
 10. Termination. 
  
 10.1. Effect of Non-Renewal. If the Employee receives written election not to renew from the Company in accordance with paragraph 3 at least sixty
(60) days prior to the beginning of the calendar year containing the Termination Date (or, if applicable, any subsequent anniversary of the Termination Date), then the Agreement shall expire upon the Termination Date or such other date as the
parties may agree to in writing. After receipt of written election not to renew from the Company, the Employee may elect to treat such failure to renew as notice of termination by delivering written notice to the Company within thirty (30) calendar
days thereafter. This election to treat a failure to renew as a notice of termination shall not affect the Period of Employment unless the parties agree otherwise in writing. Unless the parties agree otherwise in writing, the effective date of the
notice of termination shall be the date of delivery of such election to the Company. Upon the effective date of a notice of termination under this 

  

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subparagraph 10.1, the Company may request the Employee to, and if requested, the Employee shall continue to perform his or her duties as set forth in this
Agreement for a period not to exceed three (3) months from the effective date of notice of termination. In addition to such period, the Employee shall be reasonably available for a period of nine (9) additional months for advice and consultation as
requested by the Company or the Bank. The Employee shall be entitled to receive all salary and benefits to which the Employee is entitled under this Agreement until the applicable Termination Date; provided, however, that in the event the Employee
obtains other employment during the period prior to the Termination Date, then the amount of base salary due hereunder shall be decreased by the salary and benefits received by the Employee attributable to other employment during such period.
However, if the Company gives the Employee a written election not to renew and simultaneously or subsequently terminates the Employee for Cause in accordance with subparagraph 10.3, the Employee’s termination shall be governed by subparagraphs
10.3 and 10.4, and not by this subparagraph. 
  
 10.2.
Termination by the Employee. This Agreement may be terminated upon action of the Employee by not less than two (2) months notice to the Company. The Employee agrees in the event of termination under this subparagraph to cooperate, advise and
consult the Company as needed to assist in the transition of the Employee’s replacement during such two (2) month period and thereafter for a period of four (4) months during reasonable times and under reasonable circumstances. 
  
 10.3. Termination by the Company for Cause. Nothing in this Agreement
shall be construed to prevent immediate termination by the Company of the Employee’s employment under this Agreement for Cause, as defined in this Agreement. 
  

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 10.4. Effect of Termination by Employee or Termination by the Company for Cause. If this Agreement
is terminated under subparagraphs 10.2 or 10.3 hereof, the Company shall be obligated to pay the Employee his or her base salary to the date of such termination, plus any accrued bonus. The Bank or the Company shall not be obligated to provide or
pay for any further benefits under the programs or policies listed in paragraph 7 above except to the extent that any of the benefits available under such programs or policies survive termination of the Employee’s employment by their express
terms, or as required by law (e.g., COBRA Benefits), in which event they shall continue only as required by their express terms or as required by law, whichever is applicable. The qualifying event for determining COBRA Benefits shall be the date on
which the Employee terminates employment or suffers a reduction of hours that would otherwise cause him to lose coverage under the applicable group health plan but for the extension of benefits hereunder. 
  
 10.5. Termination by the Company Without Cause or by the Employee Due to
Adverse Change. In addition to termination under subparagraphs 10.1, 10.2 and 10.3 above, the Employee’s employment by the Company under this Agreement may be terminated by the Company at any time without cause during the term provided in
this Employment Agreement or by the Employee as follows: (i) within twelve (12) months following the effective date of this Agreement if there occurs an Adverse Change in the Employee’s Circumstances within such twelve month period; or (ii)
within twelve (12) months following a Change in Control if there occurs an Adverse Change in the Employee’s Circumstances within such twelve (12) month period. In the event of and in consideration for all amounts and benefits payable hereunder
by reason of a Change in Control, the Employee acknowledges that the provisions of paragraph 14 hereof shall extend to any offices or facilities of any business that becomes an affiliate of or successor to the Company on account of such Change in
Control. 
  

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 In any such event of termination under this subparagraph 10.5, the Company shall pay to the Employee in a
lump sum an amount equal to the greater of the Employee’s then current monthly salary rate or the rate in effect prior to any reduction which led to the termination times the greater of (A) the number of months otherwise remaining in the Period
of Employment set forth in paragraph 3, or (B) 12 months. The Company shall also provide the Employee with benefits in accordance with subparagraph 10.11 hereof. 
  
 10.6. (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that any
payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, would constitute an “excess parachute payment”
within the meaning of §280G of the Internal Revenue Code of 1986, as amended (the “Code”) (each such payment, a “Parachute Payment”) and would result in the imposition on the Employee of an excise tax under Code §4999,
then, in addition to any other benefits to which the Employee is entitled under this Agreement or otherwise, the Employee shall be paid an amount in cash equal to the sum of the excise taxes payable by the Employee by reason of receiving Parachute
Payments plus the amount necessary to place the Employee in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute
Payments (including, without limitation, any payments under this subparagraph 10.6(a)) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-up”). Any Parachute Gross-up otherwise required by this
subparagraph 10.6(a) shall not be made later than the time of the corresponding payment or 

  

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benefit hereunder giving rise to the underlying Code §4999 excise tax (to the extent such determination has been made prior to such time), even if the
payment of the excise tax is not required under the Code until a later time. Any Parachute Gross-up otherwise required under this subparagraph 10.6(a) shall be made whether or not there is a Change in Control, whether or not payments or benefits are
payable under this Agreement, whether or not the payments or benefits giving rise to the Parachute Gross-up are made in respect of a Change in Control and whether or not the Employee’s employment with the Employer shall have been terminated.

  
 (b) All determinations to be made under this subparagraph 10.6
shall be made by an independent public accounting firm chosen by the Company (the “Accounting Firm”). 
  
 (c) In the event the Internal Revenue Service notifies the Employee of an inquiry with respect to the applicability of Code §280G or Code §4999
to any payment by the Company, or assessment of tax under Code §4999 with respect to any payment by the Company, the Employee shall provide notice to the Company of such inquiry or assessment within 10 days, and shall take no action with
respect to such inquiry or assessment until the Company has responded thereto (provided such response is timely with respect to the inquiry or assessment). The Company shall have the right to appoint an attorney or accountant to represent the
Employee with respect to such inquiry or assessment, and the Employee shall fully cooperate with such representative as a condition of receiving a Parachute Gross-up with respect to such inquiry or assessment. 
  
 (d) All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in subparagraphs (a) and (b) above, or of the representative appointed pursuant to subparagraph (c) above, shall be borne solely by the Company. 
  

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 (e) Notwithstanding the foregoing in this subparagraph 10.6, if the imposition of a Code §4999
excise tax could be avoided by a reduction of the payments due to the Employee under this paragraph 10 (determined before application of subparagraph 10.6(a)) by an amount of 10% or less, then the total of all such payments will be reduced to an
amount one dollar ($1.00) below the amount that would cause a Code §4999 excise tax to be imposed, and subparagraph 10.6(a) will not apply. 
  
 10.7. Notwithstanding anything to the contrary set forth above, this Agreement shall terminate immediately upon the close of business on the last business
day in the calendar year in which the Employee attains the age of 65. Upon such termination, the Employee shall be entitled, to the extent he or she is covered by such at the time, to all retirement, pension, insurance and other benefits available
to the Company’s employees. 
  
 10.8. Upon termination of
employment hereunder, the Employee shall not malign, criticize or otherwise disparage the Company, the Bank or their respective officers, directors or Affiliates. 
  
 10.9. Any claims for benefits under paragraph 10 of the Agreement shall be governed by the claims procedures in the
Susquehanna Bancshares, Inc. Key Employee Severance Pay Plan, as amended from time to time. However, the severance benefit provisions of this Agreement shall govern in lieu of the severance provisions of such Plan. Except as specifically provided in
this Agreement, the benefits provided under this Agreement in the case of a termination shall be in lieu of those provided by the Company and its Affiliates under any other severance plans. 
  

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 10.10. Prior to receiving any lump sum payments to which the Employee is entitled under this Agreement,
the Employee agrees to sign an acknowledgment of receipt and release of claims in a form acceptable to the Company. 
  
 10.11. If the Employee ceases to be an active employee of the Company or any Affiliate, but the Employee is still entitled to receive salary and benefits
under one or more provisions of this Agreement other than this subparagraph, the Employee will receive the following benefits, but only to the extent the Employee is entitled under such other provisions of this Agreement: applicable salary, COBRA
Benefits, life insurance, and any payments due under any non-qualified pension or savings plans under which the Employee already participates. 
  
 11. Records. Upon the termination of employment hereunder, the Employee shall deliver to the Company and the Bank, as applicable, all
correspondence, reports, customer lists, office keys, manuals, advertising brochures, sample contracts, price lists, employee lists, prospective employee lists, mailing lists, letters, records and any and all other documents pertaining to or
containing information relative to the business of the Company or the Bank, and the Employee shall not remove any of such records either during the course of employment or upon the termination thereof. 
  
 The Employee understands that in the event of a violation of the provisions
of this paragraph 11, the Company or the Bank, as the case may be, shall have the right to seek injunctive relief, in addition to any other existing rights provided herein or by operation of law, without the requirement of posting bond. The remedies
provided in this paragraph 11 shall be in addition to any legal or equitable remedies existing between the Employee, the Bank and the Company, and shall not be construed as a limitation upon, or as alternative or in lieu of, such remedies.

  

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 12. Prohibited Assignment. The Employee shall have no right to exchange, convert, encumber or
dispose of the rights to receive the benefits or payments under this Agreement, which payments, benefits and rights thereto are expressly declared to be non-assignable and non-transferable. 
  
 13. Indemnification. To the extent permitted by law, the Company and
the Bank shall indemnify the Employee and hold him or her harmless from all liability and claims, whether meritorious or not, including the cost of defense thereof (including reasonable attorneys’ fees) which have arisen or accrued or which
hereafter may arise or accrue and are based upon any act or omission which the Employee has taken or committed or hereafter may take or commit on behalf of or in connection with the Company or the Bank in his or her official capacity, so long as the
following conditions are met with respect to such claim or liability: (a) if such action was taken in the exercise of reasonable business judgment and was taken in an area within the scope of responsibility of the Employee, or (b) if not within the
scope of the Employee’s responsibility, (i) at the time of such act or omission the Board of Directors of the Company or the Bank had knowledge of the facts or circumstances pursuant to which such act was taken or such omission occurred and
(ii) no written objection to such act or omission was duly made by the Board. 
  
 Actions taken by the Employee which are covered by this Agreement specifically include (by way of illustration), but are not limited to, (a) the payment of any salary, bonus or other compensation to any officer,
director, or employee, (b) the reimbursement or payment of any expenses incurred by any such officer, director or employee, (c) the making or retention of any investments (including, without limitation, loans) by the Company or the Bank, or (d)
injury claims against the Company, the Bank or the Employee based on negligence or other alleged tortious actions and which arise in connection with the conduct of the Company’s or the Bank’s business. 
  

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 The Employee shall indemnify the Company and the Bank and hold each harmless from all liability and
claims, whether meritorious or not, including the cost of the defense thereof (including reasonable attorneys’ fees) which have arisen or accrued or which hereafter may arise or accrue and are based upon acts taken without the consent or
approval of the Board of Directors of the Company or the Bank and which represent the Employee’s deliberate malfeasance or gross negligence. 
  
 14. Non-Competition. During the Period of Employment hereunder, and in the event the Employee’s employment is terminated pursuant to
subparagraphs 10.2 or 10.3 hereof, then for the later of (a) one year thereafter or (b) the period during which compensation or benefits are being provided pursuant to this Agreement after its termination, the Employee will not directly for himself
or herself or any third party, become engaged in any business or activity which is directly in competition with any services or financial products sold by, or any business or activity engaged in by, the Company or the Bank, including, without
limitation, any business or activity engaged in by any federally or state chartered bank, savings bank, savings and loan association, trust company and/or credit union, and/or any services or financial products sold by such entities, including,
without limitation, the taking and accepting of deposits, the provision of trust services, the making of loans and/or the extension of credit, brokering loans and/or leases and the provision of insurance and investment services, within a 25 mile
radius of any office or facility of the Company, the Bank or any of their Affiliates. This provision shall not restrict the Employee from owning or investing in publicly traded securities of financial institutions, so long as his or her aggregate
holdings in any financial institution do not exceed ten percent (10%) of the outstanding capital stock of such institution. 
  

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 During the Period of Employment hereunder, and for a period of two years thereafter no matter the reason
of termination, the Employee will not solicit any person who was a customer of the Company or the Bank during the period of the Employee’s employment hereunder, or solicit potential customers who are or were identified through leads developed
during the course of employment with the Company or the Bank, or otherwise divert or attempt to divert any existing business of the Company or the Bank within any area of 100 miles of any office or facility of the Company, the Bank or any of their
Affiliates. 
  
 The Employee will not, either during the Period of
Employment hereunder or for a period of two years thereafter directly for himself or any third party, solicit, induce, recruit or cause another person in the employment of the Bank, the Company or any of their Affiliates to terminate his or her
employment for the purposes of joining, associating, or becoming employed with any business or activity which is in competition with any services or financial products sold, or any business or activity engaged in, by Company or the Bank. 

 
 The Employee understands that in the event of a violation of any provision
of this Agreement, the Company or the Bank shall have the right to seek injunctive relief, in addition to any other existing rights provided in this Agreement or by operation of law, without the requirement of posting bond. The remedies provided in
this paragraph shall be in addition to any legal or equitable remedies existing at law or provided for in any other agreement between the Employee, the Bank or the Company, and shall not be construed as a limitation upon, or as an alternative or in
lieu of, any such remedies. If any provisions of this paragraph shall be determined by a court of competent jurisdiction to be unenforceable in part by reason of it being too great a period of time or covering too great a geographical area, it shall
be in full force and effect as to that period of time or geographical area determined to be reasonable by the court. 
  

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 15. Survival. Notwithstanding anything to the contrary in this Agreement, the parties agree that
the Employee’s obligations under paragraphs 8 and 9 of this Agreement will continue despite the expiration of the term of this Agreement or its termination. 
  
 16. Preemptive Considerations. Notwithstanding anything to the contrary set forth herein: 
  
 16.1. If the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Bank’s or the Company’s affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)) or any amendments or supplements thereto, the
Company’s and the Bank’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Company may in its discretion (i) pay the
Employee all or part of the compensation withheld while this Agreement’s obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended. 
  
 16.2. If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank’s or the Company’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1)) or any amendments or supplements thereto, all
obligations of the Bank and the Company under the contract shall terminate as of the effective date of the order, but vested rights of the parties shall not be affected. 
  

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 16.3. If the Bank or the Company is in default (as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act), all obligations under this Agreement shall terminate as of the date of default, but this subparagraph 16.3 shall not affect any vested rights of the parties. 
  
 17. Definitions. For purposes of this Agreement: 
  
 The term “Adverse Change in the Employee’s Circumstances” shall include and be limited to (A) a significant
change in the nature or scope of the Employee’s duties as set forth in the first sentence of paragraph 2 hereof such that the Employee has been reduced to a position of materially lesser authority, status or responsibility (provided, however,
for purposes of this subparagraph, in circumstances not involving a Change in Control, so long as the Employee remains a senior officer (which shall mean and include any officer position with the Company or the Bank above the position of vice
president), an Adverse Change in the Employee’s Circumstances shall not be deemed to have occurred), or the time required to be spent by the Employee 60 miles or more beyond the Company’s geographic market area shall be increased without
the Employee’s consent by more than twenty percent (20%), as compared to the average of the two (2) preceding years, or (B) a reduction in the Employee’s base compensation or (C) any other material and willful breach by the Company or the
Bank of any other provision of this Agreement. 
  
 The term
“Affiliate” shall mean with respect to the Bank and the Company, persons or entities controlling, controlled by or under common control with the Bank or the Company. 
  
 The term “Bank” shall mean the Bank as hereinbefore defined or any entity succeeding to substantially all of the
assets and business of the Bank. 
  
 The term “Board”
shall mean the board of directors of the Company. 
  

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 The term “Cause” shall mean any of the following: (a) the Employee’s personal dishonesty;
(b) the Employee’s incompetence; (c) the Employee’s willful misconduct; (d) the Employee’s breach of fiduciary duty involving personal profit; (e) the Employee’s intentional failure to perform stated duties; (f) the
Employee’s willful violation of any law, rule or regulation (other than traffic violations or similar offenses); (g) the issuance of a final cease-and-desist order by a state or federal agency having jurisdiction over the Company or the Bank or
any entity which controls the Company or the Bank to the extent such cease-and-desist order requires the termination of the Employee; or (h) a material breach by the Employee of any provision of this Agreement. 
  
 The term “Change in Control” shall mean the first to occur, after
the date hereof, of any of the following: 
  
 (a)
if any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its subsidiaries) representing 25% or more of either the then outstanding shares of stock of the Company or the combined voting power of the Company’s then outstanding securities; 
  
 (b) if during any period of 24 consecutive months during the
existence of this Agreement commencing on or after the date hereof, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason other than death to constitute at least a
majority thereof; provided that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected 

  

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by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually
(because they were directors at the beginning of such 24-month period) or by prior operation of this clause (b); 
  
 (c) the consummation of a merger or consolidation of the Company with any other corporation other than (A) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the beneficial owner, as defined in clause (a), directly or indirectly, of securities of the Company (not including in the securities beneficially
owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 40% or more of either the then outstanding shares of stock of the Company or the combined voting power of the Company’s then outstanding
securities; or 
  
 (d) the stockholders of the
Company approve a plan of complete liquidation or dissolution of the Company, or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition
by the Company of all or substantially all of the Company’s assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportion as their ownership of the
Company immediately prior to such sale. 
  

 -20- 

 Upon the occurrence of a Change in Control, no subsequent event or condition shall
constitute a Change in Control for purposes of this Agreement, with the result that there can be no more than one Change in Control hereunder. 
  
 The term “Company” shall mean the Company as hereinbefore defined or any entity succeeding to substantially all of the assets and business of
the Company. 
  
 The term “COBRA Benefit” shall refer to
the right to continue group health insurance benefits under sections 601-607 of the federal Employee Retirement Income Security Act, as amended, (29 U.S.C. part 6) Act and regulations promulgated thereunder. 
  
 The term “Period of Employment” shall have the meaning described in
paragraph 3. 
  
 The term “Person” shall have the
meaning ascribed thereto by Section 3(a)(9) of the Securities Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof (except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company, or (v) such Employee or any “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act) which
includes the Employee). 
  
 The term “Termination Date”
shall have the meaning described in paragraph 3. 
  

 -21- 

 18. Miscellaneous. 
  
 18.1. Assignment. This Agreement (including, without limitation, paragraph 14 hereof relating to non-competition)
shall be binding upon the parties hereto, the heirs and legal representatives of the Employee and the successors and assigns of the Bank and the Company. 
  
 18.2. Notices. Any notice required, permitted or intended to be given under this Agreement shall be in writing and shall be deemed to have been
given only if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid to the appropriate address shown below, or such revised address as is delivered to the other party by the same means; except as
provided in subparagraph 10.3 hereinabove with regard to constructive notice. 
  

	 	(a)	Notices to the Company or to the Bank shall be sent to: 

  
 Susquehanna Bancshares 
 Attn. Director of
Human Resources 
 26 North Cedar Street 
 P.O. Box 1000 
 Lititz, PA 17543-7000 
  

	 	(b)	Notices to the Employee shall be sent to: 

  
 James G. Pierne 
 19733 Spring Creek Road

 Hagerstown MD 21742 
  
 18.3. Entire Agreement. This Agreement constitutes the entire agreement between the parties in connection with the subject matter hereof,
supersedes any and all prior agreements or understandings between the parties and may only be changed by agreement in writing between the parties. 
  
 18.4. Construction. This Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. 
  

 -22- 

 18.5. Paragraph Headings. The paragraph headings herein have been inserted for convenience of
reference only and shall in no way modify or restrict any of the terms or provisions hereof. 
  
 IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed this Agreement the day and year first above written. 
  

							
	 	 	 	 	 SUSQUEHANNA BANCSHARES, INC.

				
	 Attest:
	 	 /s/ James H. Foster

	 	 By:
	 	 /s/ Edward Balderston, Jr.

	 	 	 Assistant Secretary
	 	 	 	 Executive Vice President &
 Chief Administrative Officer

			
	 	 	 	 	 FARMERS & MERCHANTS BANK AND TRUST

				
	 Attest
	 	 /s/ Brenda Keefer

	 	 By:
	 	 /s/ Robert E. Ernst

	 	 	 Secretary
	 	 	 	 President & CEO

		
	 	 	 EMPLOYEE

	 Witness:
	 	 
		
	 /s/ Brenda Keefer

	 	 /s/ James G.
Pierne                                       
             (Seal)

  

 -23-Employment Letter Agreement, dated December 23, 2004.

 Exhibit 10.35 
  
 

 
  
 December 23, 2004 
  
 James Lightman 
 576 Dutton Road 
 Sudbury, Massachusetts 01776

  
 Dear Jim: 
  
 On behalf of IntraLase Corp., I am pleased to confirm our offer of
employment for the position of Senior Vice President, General Counsel reporting to Bob Palmisano, CEO. As discussed, your bi-weekly salary will be $8,653.84, which is equivalent to $225,000 annually. 
  
 You will be eligible to participate in the 2005 IntraLase Executive
Incentive Compensation Plan. Your incentive target will be 35% of your base salary. Information outlining the details of the plan and your eligibility will be forwarded shortly. 
  
 In order to assist you with your relocation to southern California, you will be eligible for reimbursement for customary
expenses associated with a coast to coast executive relocation, including the shipment of household items, furniture, automobiles and similar personal property, transaction costs associated with the sale of your home and the purchase or rental of a
residence in southern California, temporary lodging, and reasonable travel expenses pending completion of the relocation. These reimbursable expenses are not to exceed $125,000.00. Reimbursements in excess of this amount will require the approval
and authorization of the CEO. To the extent any reimbursements are taxable to you, the payments will be grossed up so as to keep you whole. However, reimbursements and gross up shall not exceed $125,000.00. 
  
 Furthermore, you will be eligible to participate in the IntraLase Corp.
Stock Incentive Plan. Subject to approval by the Board of Directors, you will be granted 229,740 time-based stock options. Your options will have a four-year vesting schedule; vesting 25% on the one-year anniversary and 2.083% on the anniversary day
of each month thereafter. Details of the plan will be outlined in the Stock Option Agreement. 
  
 Additionally, you will receive a one time sign on bonus equal to $25,000.00. This amount will be payable subsequent to your start date and will be subject to all applicable taxes and withholdings. 
  
 As an employee of IntraLase you are eligible to participate in the
Company’s benefit programs, which include medical, dental, vision, life insurance, short and long term disability, and our 401k plan. Information on these plans will be provided at new employee orientation. You will also be eligible for all
other benefits including paid holidays and 4 weeks vacation. 
  
 

 

 It should be noted that employment at IntraLase is at-will. Nothing in this letter creates or is intended
to create a promise or representation of continued employment with IntraLase Corp. Where applicable, IntraLase retains the right to require employment-related disputes to be resolved through binding arbitration. 
  
 Should you accept this offer of employment you will enter into a Change of
Control Agreement in the form of exhibit 10.24 to the registration statement on form S-1 filed in connection with the company’s initial public offering. Further, in the event your employment is terminated without “cause” or is
terminated by you for “good reason”, other than in connection with a Change of Control, you will be entitled to the severance benefits described in the Change of Control Agreement except that the severance payment would be equal to one
year’s salary and the benefits extension period would be capped at one year. 
  
 Full time employment is conditioned upon the following: 
  

	 	•	 	IntraLase Corp. is committed to providing a safe, efficient and productive work place. To achieve this objective, the Company desires to prevent drug or alcohol use in the work
place. All offers of employment, temporary and full time are conditioned upon successful completion of a drug screening examination. The examination will be performed at the Company’s expense. 

  

	 	•	 	A complete and clear background check and satisfactory reference checks. 

  

	 	•	 	Signing the Company’s Proprietary Information Agreement. 

  

	 	•	 	Completing all necessary new hire documentation. 

  
 In compliance with the Immigration Control Act of 1986, it will be necessary for you to produce documentation indicating your legal right to work in the
United States. This may be in the form of a U.S. Passport, foreign passport with appropriate work visa, or a photo I.D. such as a driver’s license, your voter’s registration card, birth certificate or social security card. 
  
 This offer is being presented with the understanding that you have until
February 14, 2005 in which to consider it. Your acceptance or rejection of this offer should be acknowledged at such time. 
  
 Jim, we welcome you with the anticipation that you will make significant contributions at IntraLase. We believe that IntraLase has a significant market
opportunity with exciting and competitive technology. We are convinced that this is an excellent time to join our Company and hope that you will accept our invitation to join the IntraLase team. 

 Sincerely, 
  

			
	 /s/ Kevin Harley

	  	 
	Kevin Harley	  	 
	Vice President, Human Resources	  	 
		
	Acceptance:	  	 
		
	 /s/ James Lightman

	  	 2/14/05
  

	James Lightman	  	Date

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