Exhibit 10.9
EMPLOYMENT
AGREEMENT
As Amended and Restated Effective
January 1, 2009
THIS AMENDED AND RESTATED AGREEMENT
(this “Agreement”) made as of this 1st day of January,
2009 (the “Effective Date”), by and between
SUSQUEHANNA BANCSHARES, INC. , a Pennsylvania corporation
(the “Company”), and James G. Pierné , an
adult individual whose principal residence is at 13003 Hawkins
Circle, Hagerstown, MD 21742 (the “Employee”), on the
other side.
Background
WHEREAS , the Employee and the Company are parties to an
Employment Agreement made and entered into on July 25, 2007
(“Existing Agreement”);
WHEREAS , the Company desires to induce the Employee to
remain in its employment, and the Employee hereby agrees to accept
continuation of employment with the Company;
WHEREAS , the Company and the Employee desire to amend
the Existing Agreement to comply with the applicable requirements
of Section 409A of the Internal Revenue Code of 1986, as
amended and make other desired changes; and
WHEREAS , this Agreement replaces and supersedes all
previous employment agreements between the Employee and the Company
or any Affiliate, including the Existing Agreement.
1. Position . The Company
hereby agrees to continue the Employee’s employment and the
Employee hereby agrees to continue employment with the Company, as
Managing Director, Retail Bank Svcs/Mktg.
2. Duties .
2.1 The Employee agrees to assume
such duties and responsibilities as may be consistent with the
position of the Managing Director, Retail Bank Svcs/Mktg and as may
be assigned to the Employee by the Management of the Company or by
the by-laws of 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. The Employee agrees, in addition to
the covenants concerning Non-Competition contained in Paragraph 11,
that he or she shall 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:
(a) upon the prior written notice to and consent of the Board,
or (b) 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 Company’s Code of Ethics, 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
.
3.1 Unless terminated earlier
pursuant to the applicable termination provisions of this
Agreement, the period of employment shall commence on the Effective
Date and end on the third December 31 next following the
Effective Date (as the same may be extended pursuant to this
Paragraph, the “Period of Employment”). 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, or (b) November 1 any subsequent year, if this
Agreement has previously been extended pursuant to this Paragraph
3, then the Period of Employment shall be automatically extended by
one year.
3.2 Notwithstanding anything to the
contrary set forth herein, the Employment Period shall not extend
beyond:
3.2.1 Normal Retirement Date,
or
3.2.2 if a Change in Control has
occurred prior to the Normal Retirement Date, the later of
(a) the Normal Retirement Date, or (b) the first
anniversary of the Change in Control.
4. Compensation . For all
services rendered by the Employee under this Agreement, the Company
shall pay to the Employee compensation as provided
below:
4.1 Base Salary . The Company
shall pay the Employee a minimum annual base salary at the rate of
$330,000 per year in accordance with the Company’s normal
payroll practices. 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 1 of the
year in which the increase is granted.
- 2 -
4.2 Bonus . The Company 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 annual base salary. The Employee’s bonus (if
any) for a fiscal year shall be paid to him at the time and in the
form and manner provided under the terms of the applicable plan
pursuant to which the bonus is awarded.
4.3 Annual Review . The
determination of compensation payable by the Company hereunder
shall be made by the Compensation Committee or its designee, which
shall perform an annual review of this Agreement, the
Employee’s performance with the Company, and compensation
payable hereunder. The results of such review, including
recommendation as to base salary adjustment and bonus (if any),
shall be reported to the Company and shall be memorialized in the
minutes of the meetings of the Board or held in a confidential file
by the Company’s Human Resources Department.
5. Benefits .
5.1 Life Insurance and Disability
Benefits . 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
Company, as the same may change from time to time. The Employee
shall designate the beneficiary of such policy and
benefits.
5.2 Health Benefits . 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 Company generally, as the same may change from
time to time.
5.3 Other Benefits . To the
extent such benefits are not specifically described or duplicated
hereinabove in this Paragraph 5, the Employee shall also be
entitled to participate in any and all thrift, profit sharing,
pension and similar benefit plans (not including severance, change
in control or other similar arrangements), now or hereafter
maintained by the Company and offered by the Company to its
salaried, management employees generally, as the same may change
from time to time.
5.4 Expenses . Subject to
such general employee expense account policies as the Company may
from time to time adopt, the Company shall 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
- 3 -
reimbursed expenses are disallowed
by the Internal Revenue Service as deductions to the Company, 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 shall treat as deductible salary
expense.
5.5 Vacation . The Employee
shall be entitled to paid vacation annually as specified under the
Company’s vacation policy, to be taken at times reasonably
convenient to the Company.
5.6 Indemnification . To the
extent permitted by law, the Company 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 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 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 (d) injury claims
against the Company or the Employee based on negligence or other
alleged tortious actions and which arise in connection with the
conduct of the Company’s business.
The Employee shall indemnify the
Company and hold it 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 and which represent the Employee’s
deliberate malfeasance or gross negligence.
6. Termination . The Company
may terminate the Employee’s employment without Cause (as
defined below), subject to the requirements of applicable law, on
account of the Employee’s Disability (as defined below), in
either case, at any time, with 90 days’ advance written
notice (or pay in lieu thereof). The Company may terminate the
Employee’s employment for Cause at any time without notice.
The Employee may terminate his or her employment at any time for
any reason, with 90 days’ advance
- 4 -
written notice (or such shorter notice as the
Company shall then accept). Upon termination, the Employee shall be
entitled only to such compensation and benefits as described in
this Paragraph 6 and, if applicable, the Employee shall immediately
resign his or her position as a member of the Board and any
committee thereof, from his or her position as the Managing
Director, Retail Bank Svcs/Mktg of the Company, and his or her
position as a member of the board of directors of any Affiliate and
any committee thereof.
6.1 Termination without Cause or
Resignation due to an Adverse Change . If the Employee’s
employment ceases due to a termination by the Company without Cause
or a resignation by the Employee due to an Adverse Change (as
defined below), the Employee shall be entitled to:
6.1.1 payment of all accrued and
unpaid base salary through the date of such termination;
6.1.2 payment for all accrued but
unused vacation days;
6.1.3 payment of any bonus payable
with respect to a period ending prior to such
termination;
6.1.4 bi-weekly compensation
continuation payments for a period equal to the Non-Competition
Period, with each payment equal to 1/26 of the Average Annual
Compensation (provided, however, that it is understood that
Employee shall not participate in any benefit plans covering
employees, except as specifically stated in this Paragraph 6),
which amount shall be paid in regular payroll installments over the
Non-Competition Period following the Employee’s termination
date;
6.1.5 if the Employee participates
in any defined benefit pension plan maintained by the Company or
one of its Affiliates immediately before the Employee’s
termination date (whether such plan is tax qualified or
non-qualified), the Employee shall accrue an additional, fully
vested benefit under the Company’s non-qualified pension plan
(which shall be paid at the time and in the form determined under
the nonqualified pension plan and shall be determined in all
respects pursuant to the terms of the applicable defined benefit
pension plan(s)) equal to the difference between (a) the benefit
that the Employee would have accrued under all defined benefit
pension plans of the Company or its Affiliates in which the
Employee participated immediately before the Employee’s
termination date, taking into account the compensation paid to the
Employee under Section 6.1.4 as compensation for purposes of the
applicable plan and increasing the Employee’s years of
benefit service under the applicable plan by the number of years in
the Non-Competition Period, and (b) the actual benefit due to the
Employee under all defined benefit pension plans of the Company and
its Affiliated in which the Employee participated immediately
before the Employee’s termination date; and
6.1.6 the employee benefits listed
below for the remainder of the Non-Competition Period, in the form
and manner set forth below:
(a) continued coverage under the
applicable health plan of the Company pursuant to section 4980B of
the Code for the Employee, his or her spouse and eligible
dependents, for the period commencing on the Employee’s
termination date and continuing for the duration of the
Non-Competition Period, which coverage shall run concurrently with
the coverage provided under section 4980B of Code, subject to the
requirement that the Employee remit the employee portion of premium
cost associated with the foregoing coverage;
- 5 -
(b) continued coverage under the
applicable life insurance and accidental death and dismemberment
policy(ies) which insured the Employee during the term of his or
her employment for the period commencing on the Employee’s
termination date and continuing for the duration of the
Non-Competition Period, subject to the requirement that the
Employee remit the employee portion of premium cost associated with
the foregoing coverage, if any. The Employee should consult with
the Company concerning any life insurance policies and the
Employee’s ability to transfer such policy to the Employee
following the end off the Non-Competition Period; and
(c) continued coverage under the
applicable disability insurance policy(ies) of the Company for the
period commencing on the Employee’s termination date and
continuing for the duration of the Non-Competition Period, subject
to the requirement that the Employee remit the employee portion of
premium cost associated with the foregoing coverage, if
any.
Except as otherwise provided in
Subparagraph 6.1, all compensation and benefits shall cease at the
time of such termination and the Company shall have no further
liability or obligation by reason of such termination. The
separation benefits described in this Subparagraph 6.1 shall be
paid (or in the case of the payments described in Subparagraph
6.1.3 shall begin to be paid) within 30 days after the
Employee’s termination date, subject to the Employee’s
execution and delivery of an effective release as described below
in Subparagraph 6.4.
Notwithstanding anything herein to
the contrary, if, at the time of the Employee’s termination
of employment with the Company, the Company has securities which
are publicly traded on an established securities market and the
Employee is a “specified employee” (as such term is
defined in section 409A of the Code) and it is necessary to
postpone the commencement of any payments or benefits otherwise
payable under this Agreement as a result of such termination of
employment to prevent any accelerated or additional tax under
section 409A of the Code, then the Company shall postpone the
commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits
ultimately paid or provided to the Employee) that are not otherwise
paid within the “short-term deferral exception” under
Treas. Reg. §1.409A-1(b)(4) and/or the “separation pay
exception” under Treas. Reg. §1.409A-1(b)(9)(iii), until
the first payroll date that occurs after the date that is six
months following the Employee’s “separation of
service” with the Company. If any payments are postponed due
to such requirements, such postponed amounts shall be paid in a
lump sum to the Employee on the first payroll date that occurs
after the date that is six months following the Employee’s
“separation of service” with the Company. If the
Employee dies during the postponement period prior to the payment
of postponed amount, the
- 6 -
amounts withheld on account of section 409A of
the Code shall be paid to the personal representative of the
Employee’ s estate within 60 days after the date of the
Employee’s death. A “specified employee” shall
mean an employee who, at any time during the 12-month period ending
on the identification date, is a “specified employee”
under section 409A of the Code, as determined by the Compensation
Committee or its designee. The determination of specified
employees, including the number and identity of persons considered
specified employees and the identification date, shall be made by
the Compensation Committee or its designee in accordance with the
provisions of sections 416(i) and 409A of the Code and the
regulations issued thereunder.
6.2 Other Terminations . If
the Employee’s employment ceases for any reason other than as
described in Subparagraph 6.1, above (including, but not limited,
to (a) termination by the Company for Cause, (b) as a
result of the Employee’s death or termination by the Company
on account of the Employee’s Disability (as defined below),
(c) resignation by the Employee in the absence of an Adverse
Change or (d) attainment of the Employee’s Normal
Retirement Date described in Subparagraph 3.2), then the Employee
shall receive payment for his or her accrued and unpaid base salary
through the date of such cessation. All compensation and benefits
shall cease at the time of such termination and, except as
otherwise provided herein or in the applicable employee benefit
plans of the Company, the Company shall have no further liability
or obligation by reason of such termination.
6.3 Claims . Any claims for
benefits under Paragraph 6 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.
6.4 Release . Notwithstanding
any other provision of this Agreement, any severance or termination
payments or benefits herein described are conditioned on the
Employee’s execution and delivery to the Company of an
effective general release and non-disparagement agreement in a form
prescribed by the Company and in a manner consistent with the
requirements of the Older Workers Benefit Protection Act and any
applicable state law.
6.5 Other Rights . Nothing in
this Agreement is intended to limit the Employee’s right to
(a) payment or reimbursement for welfare benefit claims
incurred prior to the cessation of his or her employment under any
group insurance plan, policy or arrangement of the Company in
accordance with the terms of such plan, policy or arrangement,
(b) elect COBRA Benefits in accordance with applicable law, or
(c) receive a distribution of vested accrued benefits from any
employee pension benefit plan in accordance with the terms of that
plan.
- 7 -
7. Change in Control
.
7.1 Effect of a Change in
Control .
7.1.1 Effect on LTI/STI
Rights . With respect to any long-term, short-term or any
similar incentive program cycle in effect at the time of a Change
in Control:
(a) Employee shall become fully and
immediately vested in his or her incentive awards upon the
occurrence of the Change in Control; and
(b) subject to the requirements of
section 409A of the Code, such incentive awards shall be paid at
target levels and shall be paid to the Employee in a single lump
sum payment between January 1 and March 15 of the
calendar year following the end of the incentive program cycle for
which the incentive award was earned, without regard to whether
Employee remains employed by the Company and without regard to the
performance of Employee during those incentive program
cycles.
7.1.2 Effect on Pension
Rights . In the event of a termination of empl
