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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Agreement is effective as of June 1, 2006, between Fulton
Financial
Corporation, a Pennsylvania corporation ("FULTON"), and E.
Philip Wenger, an
adult individual (the "EXECUTIVE").
BACKGROUND
Executive is currently employed as the Senior Executive Vice
President/Chairman and CEO of Fulton Bank. Fulton and Executive
have previously
entered into a Severance Agreement, dated October 17, 2000 and
amended July 23,
2002 ("ORIGINAL AGREEMENT"), which provides for certain payments
to Executive
upon the occurrence of an employment termination in connection
with a change in
control of Fulton. Fulton now desires to enter into a
comprehensive Employment
Agreement with the Executive ("AGREEMENT"), replacing the
Original Agreement and
addressing more broadly the terms and conditions of Executive's
employment,
including but not limited to the consequences of an employment
termination in
connection with a change in control. The Executive desires to
continue in the
employment of Fulton, on the terms and conditions contained in
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
and agreements contained herein and intending to be legally
bound hereby, the
parties hereto agree as follows:
SECTION 1. CAPACITY AND DUTIES.
1.1 Employment: Continuation of Employment. Fulton hereby
continues the
employment of the Executive, and Executive hereby agrees to
continue Executive's
employment by Fulton, for the period and upon the terms and
conditions
hereinafter set forth.
1.2 Capacity and Duties.
(a) Executive shall serve hereunder initially as Senior Vice
President/Chairman and CEO of Fulton Bank, and thereafter during
the term
of this Agreement in such other or additional positions as may
be assigned
by the Board of Directors of Fulton (the "BOARD") or by the
Chief Executive
Officer of Fulton acting on behalf of the Board. Executive shall
perform
such duties and shall have such authority consistent with
Executive's
position as may from time to time reasonably be specified by the
Board or
by the Chief Executive Officer of Fulton acting on behalf of the
Board.
Executive shall report directly to Chief Executive Officer of
Fulton and
shall perform Executive's duties for Fulton principally at
Fulton's
headquarters in Lancaster, Pennsylvania, or at such other
locations
determined by the Board or by the Chief Executive Officer of
Fulton acting
on behalf of the Board, except for periodic travel that may be
necessary or
appropriate in connection with the performance of Executive's
duties
hereunder. The terms and conditions of this Agreement have been
reviewed
and approved by the Board's Executive Compensation Committee,
and such
Committee shall review the Agreement on
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a three year cycle, or more frequently, to assess its
continuing
appropriateness in light of Fulton's then-current needs.
(b) Executive shall devote Executive's full working time,
energy,
skill and best efforts to the performance of Executive's duties
hereunder,
in a manner that will faithfully and diligently further the
business and
interests of Fulton, and shall not be employed by or participate
or engage
in or be a part of in any manner the management or operation of
any
business enterprise other than Fulton without the prior written
consent of
the Board or the Chief Executive Officer of Fulton acting on
behalf of the
Board, which consent may be granted or withheld in Fulton's
sole
discretion.
SECTION 2. TERM OF EMPLOYMENT.
2.1 Term. The term of the Executive's employment under this
Agreement (the
EMPLOYMENT PERIOD") shall commence on the effective date of the
Agreement first
entered above (the "EFFECTIVE DATE") and shall continue until
the earliest of
(a) the voluntary termination of Executive's employment by the
Executive other
than for Good Reason (as defined in Section 4.2), (b) the
termination of the
Executive's employment by the Executive for Good Reason, (c) the
termination of
the Executive's employment by Fulton for any reason other than
Cause (as defined
in Section 4.3), (d) the termination of the Executive's
employment by Fulton for
Cause, (e) termination of the Executive's employment with Fulton
due to the
Disability (as defined in Section 4.4), (f) the termination of
Executive's
employment with Fulton due to his retirement upon attaining age
65, or (g) the
death of the Executive.
SECTION 3. COMPENSATION.
3.1 Basic Compensation. As compensation for Executive's services
hereunder,
Fulton shall pay to Executive a salary at an initial annual rate
equal to
$320,943, payable in periodic installments in accordance with
Fulton's regular
payroll practices in effect from time to time. Executive's
annual salary, as
determined in accordance with this Section 3.1, is hereinafter
referred to as
Executive's "BASE SALARY." For years subsequent to the initial
year of this
Agreement, Executive's Base Salary shall be set by Fulton at an
amount no less
than the initial annual rate set herein. For each year in the
Employment Period,
Executive shall be a participant in any bonus or incentive
compensation program
for executives, including in particular any annual cash bonus
plan and
equity-based long term incentive plan, that Fulton may implement
and administer
from time to time during the Employment Period, and the amount
and form of such
bonus and incentive compensation shall be determined annually by
Fulton
consistent with its Board's executive compensation practices.
References herein
to the amount of the Executive's Base Salary or annual cash
bonus or cash
incentive compensation shall be to the gross amount of such
compensation
element, exclusive of any elective compensation deferral
agreements entered into
by the Executive from time to time.
3.2 Employee Benefits. In addition to the compensation provided
for in
Section 3.1, Executive shall participate during the Employment
Period in those
of Fulton's broad-based employee retirement plans, welfare
benefit plans, and
other benefit programs for which Executive is eligible under the
terms of the
plan or program, on the same terms and conditions that are
applicable to
employees generally. Further, Executive shall be eligible during
the
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Employment Period to participate in any Fulton executive-only
retirement plan,
deferred compensation plan, welfare benefit plan, or other
benefit programs, as
and to the extent any such benefit programs, plans or
arrangements are or may
from time to time be in effect during the Employment Period.
3.3 Vacation and Leave. Executive shall be entitled to annual
paid
vacation, leave of absence and leave for illness or temporary
disability in
conformity with Fulton's regular policies and practices, and any
leave on
account of illness or temporary disability shall not constitute
a breach by the
Executive of Executive's agreements hereunder.
3.4 Other Executive Benefits. Executive shall also receive such
other
general executives perquisites as approved from time to time by
the Chief
Executive Officer of Fulton such as company paid club
memberships and
employer-provided automobiles.
3.5 Expense Reimbursement. During the term of Executive's
employment,
Fulton shall reimburse Executive for all reasonable expenses
incurred by
Executive in connection with the performance of Executive's
duties hereunder in
accordance with its regular reimbursement policies as in effect
from time to
time and upon receipt of itemized vouchers therefor and such
other supporting
information as Fulton may reasonably require.
SECTION 4. TERMINATION OF EMPLOYMENT.
4.1 Voluntary Termination or Age 65 Retirement. In the event
Executive's
employment is voluntarily terminated by the Executive other than
for Good Reason
(as defined in Section 4.2) or terminates due to Executive's
retirement upon
attaining age 65, Fulton shall be obligated to pay Executive's
Base Salary
through the effective date of Executive's termination, together
with applicable
expense reimbursements and all accrued and unpaid benefits and
vested benefits
in accordance with the applicable employee benefit plans. Upon
making the
payments described in this Section 4.1, Fulton shall have no
further
compensation obligation to Executive hereunder.
4.2 Termination for Good Reason; Termination Without Cause.
(a) In the event:
(i) Executive's employment is terminated during the term
hereof
by Executive for "Good Reason" (as defined herein); or
(ii) Executive's employment is terminated during the term
hereof
by Fulton for any reason other than "Cause" (as defined
herein);
then Fulton shall continue to pay Executive all of the
consideration provided
for in the following sentence for twelve (12) months following
such termination.
For purposes of the foregoing, the consideration payable under
this Section 4.2
shall include the Base Salary (as in effect immediately prior to
the
termination) and may include an additional cash bonus amount
determined in the
sole and absolute discretion of Fulton, which discretion shall
be exercised by
the Executive Compensation Committee of the Board (or its
successor) and
approved by the Board (all exclusive of any election to defer
receipt of
compensation the Executive may have made). During such twelve
(12) month period,
the Executive shall also continue to be eligible to participate
in the
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employee benefit plans referred to in Section 3.2 to the extent
Executive
remains eligible under the applicable employee benefit plans and
to the extent
Executive's eligibility is not contrary to, or does not negate,
the tax favored
status of the plans or of the benefits payable under the plan.
If Executive is
unable to continue to participate in any employee benefit plan
or program
provided for under this Agreement, Executive shall be
compensated in respect of
such inability to participate through payment by Fulton to
Executive, on an
annual basis in advance, of an amount equal to the annual cost
that would have
been incurred by Fulton if the Executive were able to
participate in such plan
or program plus an amount which, when added to the Fulton annual
cost, would be
sufficient after Federal, state and local income and payroll
taxes (based on the
tax returns filed by the Executive most recently prior to the
date of
termination) to enable the Executive to net an amount equal to
the Fulton annual
cost.
(b) As used herein, the Executive shall have "GOOD REASON"
if:
(i) There has occurred a material breach of Fulton's
material
obligations under this Agreement, and Fulton has not remedied
such
breach after notice and a reasonable opportunity to cure;
(ii) Fulton, without Executive's prior written consent,
changes
or attempts to change in any significant respect the
authority,
duties, compensation, benefits or other terms or conditions
of
Executive's employment in a manner that is adverse to the
Executive;
or
(iii) Fulton requires Executive to be based at a location
outside
a thirty-five (35) mile radius of the location where
Executive
previously was based, except for reasonably required travel
on
Fulton's business.
4.3 Termination for Cause. Executive's employment hereunder
shall terminate
immediately upon notice of termination for "Cause" (as defined
herein), in which
event Fulton shall not thereafter be obligated to make any
further payments
hereunder other than amounts (including salary, expense
reimbursement, etc.)
accrued under this Agreement as of the date of such termination
in accordance
with generally accepted accounting principles. As used herein,
"CAUSE" shall
mean the following:
(a) Executive shall have committed an act of dishonesty
constituting a
felony and resulting or intending to result directly or
indirectly in gain
or personal enrichment at the expense of Fulton;
(b) Executive's use of alcohol or other drugs which interferes
with
the performance by the Executive of Executive's duties;
(c) Executive shall have deliberately and intentionally refused
or
otherwise failed (for reasons other than incapacity due to
accident or
physical or mental illness) to perform Executive's duties to
Fulton, with
such refusal or failure continuing for a period of at least 30
consecutive
days following the receipt by Executive of written notice from
Fulton
setting forth in detail the facts upon which Fulton relies in
concluding
that Executive has deliberately and intentionally refused or
failed to
perform such duties; or
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(d) Executive's conduct that brings public discredit on or
injures the
reputation of Fulton, in Fulton's reasonable opinion.
4.4 Benefits Following Death or Disability.
(a) Following Executive's total disability ("DISABILITY", as
defined
below) or death during the term of this Agreement, the
employment of the
Executive will terminate automatically, in which event the Bank
shall not
thereafter be obligated to make any further payments hereunder
other than
amounts (including salary, expense reimbursement, etc.) accrued
under this
Agreement as of the date of such termination in accordance with
generally
accepted accounting principles or as otherwise specifically
provided
herein. For purposes hereof, Disability shall mean shall mean
that the
Executive, by reason of a medically determinable physical or
medical
impairment that can be expected to result in death or expected
to last for
a continuous period of at least twelve months, (i) is unable to
engage in
any substantial gainful activity or (ii) has received income
replacement
benefits for a period of at least three months under an accident
or health
plan of Fulton.
(b)
(i) In the event of a termination of this Agreement as a
result
of the Executive's death, the Executive's dependents,
beneficiaries
and estate, as the case may be, will receive such survivor's
income
and other benefits as they may be entitled under the terms of
the
benefit programs, plans, and arrangements described in Section
3.2
which provide benefits upon the death of the Executive.
(ii) In the event of a termination of this Agreement as a
result
of the Executive's Disability, (A) Fulton shall pay the
Executive an
amount equal to at least six months' Base Salary at the rate and
as
required by Section 3.1 and in effect immediately prior to the
date of
Disability, (B) thereafter for as long as Executive continues to
be
disabled Fulton shall continue to pay an amount equal to at
least 60%
of Base Salary in effect immediately prior to the date of
Disability
until the earlier of Executive's death or December 31 of the
calendar
year in which Executive attains age 65; and (C), to the extent
not
duplicative of the foregoing, Executive shall receive those
benefits
customarily provided by Fulton to disabled former employees,
which
benefits shall include, but shall not be limited to, life,
medical,
health, accident insurance and a survivor's income benefit.
(iii) For the purposes of (i) and (ii) above, the Executive
or
Executive's dependents shall pay the same percentage of the
total cost
of coverage under the applicable employee benefit plans as
Executive
was paying when Executive's employment terminated. The total
cost of
the Executive's continued coverage shall be determined using the
same
rates for health, life and/or disability coverage that apply
from time
to time to similarly situated active employees.
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4.5 Death or Disability Following Termination of Employment.
Executive's
disability or death following Executive's termination pursuant
to Section 4.2
shall not affect Executive's right, or if applicable, the right
of Executive's
beneficiaries, to receive the payments for the balance of the
period described
in Section 4.2, nor will it affect the right of Executive or
Executive's
beneficiaries to receive the balance of payments due under
Sections 6 and 7
herein.
4.6 Beneficiary Designation. Executive may, at any time, by
written notice
to Fulton, name one or more beneficiaries of any benefits which
may become
payable by Fulton pursuant to this Agreement. If Executive fails
to designate a
beneficiary any benefits to be paid pursuant to this Agreement
shall be paid to
Executive's estate.
SECTION 5. RESTRICTIVE COVENANTS.
5.1 Confidentiality. Executive acknowledges a duty of
confidentiality owed
to Fulton and shall not, at any time during or after Executive's
employment by
Fulton, retain in writing, use, divulge, furnish, or make
accessible to anyone,
without the express authorization of the Board or senior
management of Fulton,
any trade secret, private or confidential information or
knowledge of Fulton or
any of their affiliates obtained or acquired by Executive while
so employed. All
computer software, business cards, customer lists, price lists,
contract forms,
catalogs, books, records, files and know-how acquired while an
employee of
Fulton are acknowledged to be the property of Fulton (or the
applicable
affiliate) and shall not be duplicated, removed from Fulton's
possession or made
use of other than in pursuit of Fulton's business and, upon
termination of
employment for any reason, Executive shall deliver to Fulton,
without further
demand, all copies thereof which are then in Executive's
possession or under
Executive's control.
5.2 Non-Competition and Nonsolicitation. Executive shall not,
duri
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