EMPLOYMENT AGREEMENT
EXHIBIT
10.9
This
Employment Agreement (“Agreement”), dated January 25, 2006, between STERLING
BANK, a New Jersey-chartered commercial bank (the “Bank”), and XXXXXX X. XXXX,
an individual residing in Burlington County, New Jersey (the
“Executive”).
WITNESSETH:
WHEREAS,
the Bank and the Executive desire to establish and formalize their specific
understandings regarding the Executive’s employment with the Bank by executing a
formal document more fully setting forth the respective rights and obligations
of the parties in connection with such employment relationship.
NOW,
THEREFORE, in consideration of the premises and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment.
The
Bank hereby employs the Executive as its President and Chief Executive Officer,
and the Executive hereby accepts such employment and agrees to perform all
duties and accept all responsibilities, normally incident to the position of
President and Chief Executive Officer of a banking institution similar to that
of the Bank, as may be assigned to him from time to time by the Board of
Directors of the Bank (the “Board’). The Executive shall devote his fall time,
best efforts, knowledge, and experience in discharging his duties under this
Agreement; provided, however, that he shall be entitled to engage in charitable
and civic activities so long as such activities do not adversely affect his
ability to adequately discharge his duties hereunder.
2. Term
of Employment.
Except
as otherwise provided below, the Executive’s employment under this Agreement
shall be for a three-year period (the “Employment Period”), commencing on the
date first set forth above. Beginning with the second day of this Agreement,
and
on each day thereafter, the Employment Period shall be extended by one day,
so
that, at all times, the Employment Period shall be for a period of three years;
provided, however, that such automatic extension provisions shall terminate
concurrent with the Executive’s 65th
birthday
(“Retirement Age”). Notwithstanding the preceding terms of this subsection, the
Bank may, at any time, deliver to the Executive a written notice advising him
that it desires to terminate the foregoing automatic renewal provisions, in
which event the Employment Period shall, subject to the terms of this Agreement,
continue through the remainder of its term in effect on the date such notice
of
non-renewal is given.
(a) Termination
for Cause.
The
Executive’s employment under this Agreement may be terminated at any time during
the Employment Period for Cause, by action of the Board. As used in this
Agreement, “Cause”‘ means any of the following events:
(i) the
Executive is convicted of or enters a plea of guilty or nolo
contendere
to a
felony or crime involving (A) a material falsehood, (B) material dishonesty,
or
(C) any fraud or act of moral turpitude; or the actual incarceration of the
Executive for a period of 45 consecutive days;
(ii) the
commission of any act of personal dishonesty or willful violation of any law,
rule or regulation (other than traffic violations or similar offenses) that
materially and adversely affects, or in the good faith, reasonable opinion
of
the Board, could materially and adversely affect, the Bank or its reputation
(or
the Executive’s ability to perform his duties hereunder), or the issuance of a
final cease-and-desist order;
(iii) the
Executive willfully fails to follow the lawful instructions (which are not
inconsistent with the provisions of this Agreement) of the Board, after his
receipt of reasonable written notice of such instructions, coupled with his
failure to cure any such failure within ten (10) days as may be referenced
in
such written notice (if it is curable at all), other than a failure resulting
from his incapacity because of physical or mental disability;
(iv) the
Executive violates any provision of any code of conduct or similar document
(if
any), which violation is material under the circumstances, including, without
limitation, any provisions relating to breach of fiduciary duty in connection
with his employment;
(v) any
government regulatory agency, having jurisdiction over the Bank, recommends
or
orders, in either case in writing, that his employment be terminated or that
he
be relieved from the performance of his duties;
(vi) during
his employment hereunder, the Executive commits any material breach of this
Agreement, including but not limited to a violation of the provisions of Section
5, 6 or 7, after his receipt of reasonable written notice of such breach,
coupled with his failure to cure any such breach within ten (10) days (if it
is
curable at all) as may be referenced in such written notice; or
(vii) the
continued, habitual intoxication of the Executive or the continued, habitual
performance by the Executive of his duties while under the influence of a
controlled substance, other than a controlled substance prescribed by a
physician.
If
the
Executive’s employment is terminated under the provisions of this Section 2(a),
then all rights of the Executive under Section 3 shall cease as of the effective
date of such termination; provided, however, that he shall nonetheless be paid
his accrued but unpaid salary (determined under Section 3(a)) to the date of
termination, incurred but un-reimbursed appropriate business expenses as of
the
date of termination, and such other amounts and benefits (if any) as he may
otherwise be due under the pension and welfare (including insured welfare)
benefit plans in which he is then a participant.
(b) Termination
by the Bank Without Cause.
The
Executive’s employment under this Agreement may be terminated by the Bank at any
time during the Employment Period without Cause, by action of the Board, upon
giving written notice of such termination to the Executive at least 30 days
prior to the date upon which such termination shall take effect. If the
Executive’s employment is terminated under the provisions of this Section 2(b),
then the Executive shall be entitled to receive the compensation and benefits
set forth in Section 4.
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(c) Retirement
or Death.
If the
Executive retires at Retirement Age or earlier or dies while still employed
by
the Bank or its successors and assigns, the Executive’s employment under this
Agreement shall be deemed terminated as of the date of the Executive’s
retirement or death, and all rights of the Executive under Section 3 shall
cease
as of the effective date of such retirement or death; provided, however, that
the Executive (or his estate, as applicable) shall nonetheless be entitled
to
payment of accrued but unpaid salary (determined under Section 3(a)) to the
date
of termination, incurred but un-reimbursed appropriate business expenses as
of
the date of termination, and such other amounts and benefits (if any) as he
may
otherwise be due hereunder as of the date of termination or under the terms
of
the pension and welfare (including insured welfare) benefit plans in which
he is
then a participant.
(d) Disability.
If the
Executive becomes incapacitated by accident, sickness or otherwise so as to
render the Executive mentally or physically incapable of performing services
required under Section 1 of this Agreement, notwithstanding reasonable
accommodation, for a continuous period of six months or 180 days in any 12
month
period, then, upon the expiration of such period or at any time thereafter,
by
written action of the Board, the Executive’s employment under this Agreement may
be terminated immediately upon giving the Executive written notice to that
effect. If the Executive’s employment is terminated under the provisions of this
Section 2(d), then all rights of the Executive under Section 3 shall cease
as of
the last business day of the week in which such termination occurs; provided,
however, that he shall nonetheless be entitled to payment of accrued but unpaid
salary (determined under Section 3(a)) to the date of termination, incurred
but
un-reimbursed appropriate business expenses as of the date of termination,
and
such other amounts and benefits (if any) as he may otherwise be due hereunder
or
under the pension and welfare (including insured welfare) benefit plans in
which
he is then a participant. An accommodation satisfying the provisions of this
Section 2(d) shall be deemed compliance in full with any federal, state or
local
statute, ordinance or regulation requiring a reasonable accommodation on account
of the Executive’s physical or mental disability or handicap.
(e) Voluntary
Termination by the Executive Without Good Reason.
The
Executive may voluntarily terminate his employment under this Agreement at
any
time during the Employment Period, for any or no reason (other than Good
Reason), by giving written notice of such termination to the Board at least
30
days prior to the date upon which such termination is to take effect. If the
Executive terminates his employment under the provisions of this Section 2(e),
then all rights of the Executive under Section 3 hereof shall cease as of the
effective date of such termination; provided, however, that he shall nonetheless
be entitled to payment of accrued but unpaid salary (determined under Section
3(a)) to the date of termination, incurred but un-reimbursed appropriate
business expenses as of the date of termination, and such other amounts and
benefits (if any) as he may otherwise be due hereunder as of the date of
termination or under the pension and welfare (including insured welfare) benefit
plans in which he is then a participant.
(f) Voluntary
Termination by the Executive With Good Reason.
The
Executive may resign his employment under this Agreement for a Good Reason
at
any time during the Employment Period upon thirty (30) days notice as herein
set
forth. As used in this Agreement, “Good Reason” means any of the following,
unless such circumstances are fully cured within thirty (30) days after the
Executive notifies the Bank in writing that he intends to terminate his
employment for Good Reason:
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(i) any
reduction in title, a material change in reporting structure or a material
reduction in the Executive’s responsibilities or authority (including such
responsibilities and authority as the same may be increased at any time during
the Employment Period) over the operations of the Bank, which reduction or
change shall be deemed to have occurred if the Bank becomes a subsidiary of
(or
integrated into) an entity that is initially controlled (determined by reference
to the voting power of its securities) by persons other than the Bank’s
shareholders immediately prior to the relevant transaction;
(ii) the
assignment to the Executive of duties inconsistent with the Executive’s title as
the President and Chief Executive Officer of the Bank;
(iii) any
reassignment of the Executive that reasonably requires the Executive to move
his
present principal residence referred to in Section 13, or to provide his
employment services under this Agreement at a principal office location of
the
Bank that is more than 25 miles from where the Bank’s principal office is
located on the date of this Agreement;
(iv) any
removal of the Executive from office or any material adverse change in the
terms
and conditions of the Executive’s employment, except for any termination of the
Executive’s employment under the provisions of Subsections (a), (c) or
(d);
(v) any
reduction in the Executive’s base compensation provided in Section 3(a) or in
the Executive’s incentive compensation provided in Section 3(d), unless, in the
latter case, such reduction is in accordance with the terms of any written
incentive plan approved by the Board of Directors, in each case, as in effect
on
the date hereof or as the same may be increased from time to time; provided
however, that no reduction shall be deemed to occur if it occurs by reason
of
any permitted action by the Bank set forth in Section 3;
(vi) any
failure of the Bank to provide the Executive with benefits at least as favorable
(in the aggregate) as those enjoyed by him under any of the pension and welfare
(including insured welfare) benefit plans in which the Executive then currently
participates, or the taking of any action that would materially reduce any
of
such benefits, unless such reduction is part of a reduction applicable to all
or
substantially all of the officers of the Bank covered by such
plans;
(vii) the
failure of any successor of the Bank to assume and agree to perform (or cause
to
be assumed and agreed to be performed by one of its affiliated companies) the
Bank’s obligations under this Agreement, as provided in and to the extent
required by Section 14(a); or
(viii) a
material breach of this Agreement on the part of the Bank at any relevant time,
coupled with the failure to cure the same within 30 days after receipt of a
written notice of such breach from the Executive.
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At
the
Option of the Executive, exercisable by him within 90 days after the occurrence
of an event constituting an event of Good Reason (or 180 days thereafter in
the
event a “Change in Control” (as defined in Section 4(b) has occurred) and after
the Bank has failed to cure or otherwise fully remedy such event within 30
days
following written notice of such event by the Executive, the Executive may
resign from employment under this Agreement by a notice in writing (the “Notice
of Termination”) delivered to the Bank, whereupon the provisions of Section 4
shall apply.
(g) Rights
of Executive Upon Expiration of Agreement.
In the
event this Agreement expires in accordance with its terms, the Executive shall
only be entitled to payment of accrued but unpaid salary (determined under
Section 3(a)) to the date of expiration, incurred but un-reimbursed appropriate
business expenses as of the date of expiration, and such other amounts and
benefits (if any) as he may otherwise be due hereunder or under the pension
and
welfare (including insured welfare) benefit plans in which he is then a
participant.
3. Compensation.
(a) Salary.
During
the term of this Agreement, the Bank agrees to pay to the Executive a base
salary at an annual rate of One Hundred Ninety Six Thousand Dollars
($196,000.00), payable in bi-weekly installments or otherwise in accordance
with
the Bank’s standard payroll practice. Subject to final approval of the Board,
the Personnel Practices Committee of the Board shall periodically consider
salary adjustments in accordance with a 2004 CEO compensation matrix adopted
by
the Board, which matrix shall remain in effect until such time as it may be
changed by the Board, in its reasonable discretion.
(b) Welfare
Benefits.
(i) In
General.
The
Executive shall be entitled to participate in each health insurance, life
insurance and other welfare benefit plan available on a basis similar to that
applicable to other employees of the Bank in accordance with the terms of such
plans; provided, however, that the Bank reserves the right, from time to time,
to amend a plan in any respect and to terminate any or all of such welfare
benefit plans, so long that any reduction or change in benefits is applicable
to
all or substantially all employees generally. In the event of Executive’s
termination of employment, the Bank will provide continuation participation
by
the Executive and eligible members of his family in the Bank’s medical expense
plan through and during any applicable COBRA coverage period (to the extent
he
opts for such coverage). All costs of such medical benefit coverage shall be
borne by the Bank, except to the extent he was paying some portion of the
premium or related cost prior to termination.
(ii) Additional
Life Insurance Benefits.
In
addition to his right to participate in the Bank’s life insurance program for
its employees generally, during the Employment Period, the Bank shall continue
to provide supplemental life insurance coverage in an amount equal to one times
the Executive’s annual base salary set forth in Section 3(a) hereof, as the same
may be hereafter increased. Costs of such supplemental coverage shall be borne
by the Bank.
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(iii) Disability
Insurance.
In
addition to his right to participate in the Bank’s group disability insurance
program for its employees generally, during the Employment Period, the Bank
shall continue to provide supplemental long-term disability coverage in an
amount that, when added to the Bank’s group disability benefit, equals 100% of
the Executive’s pre-disability annual base salary set forth in Section 3(a)
hereof, as the same may be hereafter increased. Costs of such supplemental
coverage shall be borne by the Bank.
(c) Pension
Benefits.
The
Executive shall be entitled to participate in each pension benefit plan of
the
Bank, if any, on a basis similar to that applicable to other employees of the
Bank in accordance with the terms of such plans; provided, however, that the
Bank reserves the right, from time to time, to amend a plan in any respect
and
to terminate any or all of such pension benefit plans, so long as any reduction
or change in benefits is applicable to all or substantially all employees
generally.
(d) Incentive
Compensation Plan.
The
Executive shall be entitled to participate in the Executive Incentive Plan,
adopted by the Board in 2004, in accordance with its terms; provided, however,
that the Bank reserves the right to amend the plan in any respect and to
terminate such plan, so long as any such reduction or change in benefits is
applicable to all or substantially all executives generally.
(e) Bank
Vehicle.
The
Executive shall be entitled to continued use of a Bank-provided vehicle on
terms
substantially the same as those heretofore in effect. In addition, in the event
of his termination, other than for Cause or without Good Reason, he shall be
given the right by the bank to purchase such vehicle from the Bank (or leasing
entity, if applicable) at its then wholesale fair market value. The Executive
shall periodically provide to the Bank, upon its request, a detailed accounting
of his personal and business use of the automobile from time to
time.
(f) Club
Membership.
The
Bank acknowledges that the club membership at Laurel Creek Country Club is
the
property of the Executive. However, during the Employment Period, the Bank
agrees to pay or reimburse him for periodic dues and other fees at Laurel Creek
Country Club.
(g) Vacation.
The
Executive shall be entitled to four weeks of vacation per calendar year (pro
rated as appropriate), two weeks of which may be taken consecutively. In
addition, he shall be entitled to one additional week of vacation per calendar
year after ten years of service with the Bank and one additional week of
vacation per calendar year after 20 years of service.
(h) Stock
Options.
The
Executive shall be entitled to participate in such stock option plan as may
be
adopted and maintained by the Bank, at levels commensurate with his status
within the Bank’s organization.
(i) Expenses.
The
Bank will reimburse the Executive for all reasonable expenses incurred by him
in
the course of performing his duties under this Agreement, which expenses are
consistent with the Bank’s policies in effect from time to time with respect to
travel, entertainment and other business expenses, subject to the Bank’s
requirements with respect to reporting and documentation of such
expenses.
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4. Benefits
in the Event of Certain Terminations of Employment.
(a) Payments
and Benefits.
In the
event of the Executive’s termination of employment without Cause under Section
2(b) or the termination of the Executive’s employment in accordance with the
provisions of Section 2(f), he shall be entitled to the following payments
and
benefits, in addition to accrued compensation, un-reimbursed expenses described
in Section 3(i), and the benefits to which he may be entitled under the terms
of
any plans or programs of the Bank in which he is a participant or to which
he is
a party:
(i) The
Executive will be paid an amount equal to three times the sum of (i) the highest
annualized base salary paid to him at any time under this Agreement, and (ii)
the average of the annual bonuses paid to him with respect to the three calendar
years immediately preceding the year of termination (including calendar years
which include service prior to the date of this Agreement). Such amount will
be
paid to the Executive in 36 equal monthly installments (without interest),
beginning 30 days following the date of termination of employment.
(ii) The
Executive shall also be entitled, at the Bank’s sole cost, to continuation of
welfare benefits in which he was participating as of the date of his termination
of employment, for a period of three-years following such termination; provided,
however, that this provision shall not result in duplication of any of such
benefits as otherwise provided for herein. To the extent any such benefit may
not be provided to the Executive because he is no longer an employee of the
Bank, the Bank shall pay him such after-tax amount as is necessary for him
to
secure substantially identical coverage.
(iii) In
the
event that the amounts and benefits payable under this section, when added
to
other amounts and benefits which may become payable to the Executive by the
Bank
(the “Payments”), are such that he becomes subject to the excise tax provisions
of Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
the Bank shall pay him such additional amount or amounts (the “Gross-Up
Payments”) as will result in his retention (after the payment of all federal,
state and local excise, employment, and income taxes with respect to the
Payments) of a net amount equal to the net amount he would have retained had
the
initially calculated Payments been subject only to income and employment
taxation. For purposes of determining the amount of Gross-Up Payments, the
Executive shall be deemed to be subject to the highest marginal federal, state,
local and (if relevant) foreign tax rates. All calculations required to be
made
under this paragraph shall be made by the Bank’s independent public accountants,
subject to the right of the Executive’s representative to review the same. All
such amounts required to be paid shall be paid at the time any withholding
may
be required under applicable law, and any additional amounts to which the
Executive may be entitled shall be paid or reimbursed no later than 15 days
following confirmation of such amount by the Bank’s independent accountants. In
the event any amounts paid hereunder by the Bank are subsequently determined
to
be in excess of the amounts owed because estimates were required or otherwise,
the Executive will reimburse the Bank to correct the error upon written notice
from the Bank, together with written confirmation of the same by the Bank’s
independent accountants, as appropriate, and to pay interest thereon at the
applicable federal rate (as determined under Code Section 1274 for the period
of
time such erroneous amount remained outstanding and un-reimbursed). In the
event
any amounts paid hereunder by the Bank are subsequently determined to be less
than the amounts owed (or paid later than when due) for any reason, the Bank
will pay to the Executive the deficient amount, together with (i) interest
at
the greater of the above-referenced rate or the interest he may be required
to
pay taxing authorities, plus (ii) any penalties assessed against him by such
authorities. Prior to its payment to the Executive, the Bank shall be entitled
to request the delivery of proof (by calculations made by the Executive’s
accountant or, in the case of tax assessments, the Executive’s delivery of
copies of such assessments) of the underpaid amounts and any interest or
penalties assessed by taxing authorities. The parties recognize that the actual
implementation of the provisions of this subsection are complex and agree to
deal with each other in good faith to resolve any questions or disagreements
arising hereunder.
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(iv) Notwithstanding
the preceding provisions of this Section 4, in the event the payments and
benefit (including Gross-Up Payment) provisions are contrary to (and in excess
of) any federal or state banking authority law, rule or regulation, then the
benefits provided under this Section 4 shall be reduced by such minimal amount
as may be necessary to comply with such law, rule or regulation. The Executive
shall be entitled to elect which payments and benefits shall be reduced and
in
which manner, subject to approval of the Board.
All
payments made and benefits provided under this Section 4 shall be in lieu of
any
severance benefit to which the Executive would otherwise be entitled under
any
severance benefit program of the Bank. To the extent benefits under such a
program may not be reduced, then the amounts and benefits otherwise provided
hereunder shall be reduced by an amount equal to the value of the amounts and
benefits received under such severance program.
(b) Change
in Control.
For
purposes of this Agreement (including application of this section), the term
“Change in Control” means any change described in Code Section 280G(b)(2)(A)(i),
or any other event or series of events declared as such by the
Board.
(c) Execution
of Amendment and Release.
As a
condition to the Executive’s right to receive the payments and benefits
otherwise required under this section, he shall execute and deliver to the
Bank
a form of Release Agreement substantially in the form of Exhibit A, attached
hereto.
(d) Loss
of Rights.
In the
event the Executive breaches any of the provisions of Section 5, 6 or 7, he
shall forthwith forfeit his right to continued payments and benefits under
this
section and shall, upon written demand of the Bank, return the value of the
payments and benefits provided to him following the initial violation of any
such section and before the discovery thereof by the Bank.
5. Covenant
Not to Compete, Etc.
(a) Covenant.
The
Executive hereby acknowledges and recognizes the highly competitive nature
of
the business of the Bank and its affiliated companies and accordingly agrees
that during the Employment Period and for a period of three years thereafter,
the Executive shall not:
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(i) be
engaged, directly or indirectly, either for his own account or as agent,
consultant, employee, partner, officer, director, proprietor, investor (except
as an investor owning less than 1% of the stock of a publicly-owned company)
or
otherwise of any person, firm, corporation, or enterprise engaged in any
business in which the Bank or any of its affiliates was engaged in during the
Employment Period or as of the date of his termination, unless, in the case
of
termination of employment, such business has previously been permanently
abandoned (the “Restricted Businesses”), in any county in which the Bank or any
such affiliate has a branch banking presence during the Employment Period (the
“Non-Competition Area”);
(ii) provide
financial or other assistance to any person, firm, corporation, or enterprise
engaged in a Restricted Business in the Non-Competition Area;
(iii) solicit
current or former customers of the Bank or any of its affiliated companies;
or
(iv) solicit
for hire or otherwise hire current or former employees of the Bank or its
affiliated companies.
Notwithstanding
the preceding provisions of this subsection, the provisions of this subsection
shall not apply in the event the Executive terminates his employment at or
following a Change in Control or for Good Reason. Furthermore, notwithstanding
in this Section 5(4) to the contrary, this Section 5(a) shall not apply at
any
time after the one-year anniversary of the Executive’s termination of employment
provided that the executive executes and delivers a written release and waiver
in a form reasonably acceptable to the Bank providing for the Executive’s
relinquishment of any rights to post-termination compensation hereunder,
including without limitation, Section 4, from and after such date.
(b) Judicial
Cut-Back.
It is
expressly understood and agreed that, although the Executive and the Bank
consider the restrictions contained in Section 5(a) to be reasonable for the
purpose of preserving for the Bank and its affiliated companies their good
will
and other proprietary rights, if a final determination is made by a court or
arbitrator having jurisdiction that the time or territory or any other
restriction contained in Section 5(a) is an unreasonable or otherwise
unenforceable restriction against the Executive, the provisions of Section
5(a)
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such other extent as such court or arbitrator
may determine or indicate to be reasonable.
6. Confidential
Information.
The
Executive will not reveal (or permit to be revealed) to a third party or use
for
his own benefit, either during or after his employment hereunder, without the
prior written consent of the Bank, any confidential information pertaining
to
the business of the Bank or its shareholders, subsidiaries or other affiliates,
including but not limited to information about customers, suppliers, employees,
financial condition, operations, procedures, know-how, production, distribution,
experiments, patent or other trade secrets of the Bank or its affiliates except
for information clearly established to be in the public record. Notwithstanding
the foregoing, confidential information does not include (i) information which
the Executive can prove to the Bank’s satisfaction is or has become generally
known to the public through no act or omission of the Executive and (ii)
information which has been or hereafter is lawfully obtained by the Executive
from a source other than the Bank or any of its affiliates (or their respective
officers, directors, employees, equity holders or agents) so long as, in the
case of information obtained from a third party, such third party was not,
directly or indirectly, subject to an obligation of confidentiality owed to
the’
Bank or any of its affiliates at the time such confidential information was
disclosed to the Executive. Nothing in this section shall be construed as
precluding the Executive’s divulging of confidential information if required by
law, provided he gives prior written notice to the Bank of the impending
disclosure.
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7. Additional
Covenants of Executive.
The
Executive hereby agrees that:
(a) Employee
Work.
All
written and graphic materials, computer software, inventions, discoveries,
patents, patent applications developed, authored, prepared, conceived or made
by
the Executive during the term of his employment hereunder and which are related
to or are the product of the tasks, assignments and performance by the Executive
of the duties of his employment and relate to the business of the Bank or any
of
its affiliates (collectively, “Employee Work”) shall be the sole property of the
Bank or, as relevant, an affiliate, and, to the extent applicable, shall be
“work made for hire” under and as defined in the Copyright Act of 1976, 17
U.S.C. Section I et
seq. The
Executive hereby agrees to disclose promptly to the Bank all Employee Work
and
hereby agrees to assign to the Bank or an affiliate, as the case may be, all
right, title and interest in and to such Employee Work and shall execute,
whether employed or not then employed by the Bank or its successors and assigns,
all such documents and instruments as the Bank may reasonably determine are
necessary or desirable in order to give effect to this subsection or to
preserve, protect or enforce the Bank’s or an affiliate’s rights with respect to
any Employee Work.
(b) Return
of Bank and Affiliate Property.
Promptly after termination of the Executive’s employment hereunder for any
reason, the Executive or his personal representative shall return to the Bank
all property of the Bank or an affiliate then in his possession, including
without limitation papers, documents, computer disks, applicable compute program
user identification information and passwords, vehicles, keys, credit cards
and
confidential information, and shall neither make nor retain copies of the
same.
8. Arbitration.
Any
disagreement or claim (other than a claim for injunctive relief for violation
of
Section 5, 6 or 7, which is hereby authorized in addition to any other right
of
enforcement permitted hereunder) arising out of or relating to this Agreement,
or the breach thereof, or its termination shall be finally settled by
arbitration in Burlington County, New Jersey pursuant to the rules of the
American Arbitration Association regarding resolution of employment disputes.
In
such instances, it is agreed that the dispute shall be submitted to final and
binding arbitration by one arbitrator; provided, however, that either party
may
request that there be three arbitrators, in which case each party shall select
one arbitrator, and the two arbitrators so selected shall select a third. Except
as otherwise provided in Section 10, all costs of arbitration (other than the
costs of a party’s own witnesses and professional advisors), shall be split
equally between the parties.
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9. Representations
and Warranties of the Executive.
The
Executive hereby represents and warrants to the Bank that he is not a party
to
or otherwise subject to or bound by any contract, agreement or understanding
which would limit or otherwise adversely affect his ability to perform his
duties hereunder or which would be breached by his execution and delivery of
this Agreement or by the performance of his duties hereunder. The Executive
further represents and warrants that his employment by the Bank will not require
him to disclose or use any confidential information belonging to prior employers
or other persons or entities.
10. Legal
Expenses.
The
Bank shall pay to the Executive (or his surviving spouse or estate) all
reasonable legal fees and expenses incurred by the Executive (or his surviving
spouse or estate), in good faith, in seeking to obtain or enforce any right
or
benefit provided by this Agreement; provided he (or his spouse or estate)
prevails with respect to any material issue in dispute. In addition, upon
execution of this Agreement, the Bank shall pay or reimburse (on a tax-effected
basis determined as provided in Section 3(b)(i)) the legal fees incurred by
the
Executive in connection with the negotiation of this Agreement.
11. No
Mitigation or Offset.
The
Executive shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking employment or otherwise; nor shall
any
amount or benefit payable or provided hereunder be reduced in the event he
does
secure employment.
12. Liability
Insurance.
The
Bank shall use its best efforts to obtain insurance coverage for the Executive
under an insurance policy covering the officers and directors of the Bank
against lawsuits, arbitrations and other legal or regulatory proceedings;
provided, however, that nothing herein shall be construed to require the Bank
to
obtain such insurance, if the Board determines that such coverage cannot be
obtained at a reasonable price.
13. Notices.
Any
notice required to be provided to the Executive hereunder shall be given to
the
Executive in writing by certified mail, return receipt requested, or by
reputable overnight courier, addressed to the Executive at his address of record
with the Bank, or at such other place as the Executive may from time to time
designate in writing. Any notice which the Executive is required to give to
the
Bank hereunder shall be given in writing by certified mail, return receipt
requested, or by reputable overnight, addressed to the Senior Human Resources
Officer at its principal office. The dates of mailing any such notice shall
be
deemed to be the date of delivery thereof.
14. Successors,
Binding Agreement.
(a) The
Bank
will require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of the Bank to expressly assume and agree to perform this Agreement
in
the same manner and to the same extent that the Bank would be required to
perform if no such succession had taken place. Failure by the Bank to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall constitute a material breach of this Agreement. As used in this Agreement,
the “Bank” shall mean the Bank as hereinbefore defined and any successor to the
business and/or assets of the Bank as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
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(b) This
Agreement shall not be assignable by the Executive without the Bank’s prior
written consent. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s personal or legal representatives, executors, administrators,
heirs, distributees, devisees, and legatees, as appropriate. If the Executive
should die while any amount or benefit would be payable to the Executive under
this Agreement if the Executive had continued to live, all such amounts and
benefits, unless otherwise provided herein, shall be paid in accordance with
the
terms of this Agreement to the Executive’s surviving spouse, if any, and, if
there is no surviving spouse, to his estate. This Agreement shall inure to
the
benefit of and be binding upon the Bank’s successors and assigns.
15. Withholding.
All
taxable payments and benefits made or provided hereunder shall be subject to
such federal, state, local and (if relevant) foreign tax withholding. To the
extent there are insufficient funds available for the Bank to discharge its
withholding obligations, the Executive will promptly provide such funds to
the
Bank, following its demand, as may be necessary for it to satisfy such
obligations.
16. Miscellaneous.
The
validity or enforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision. This Agreement embodies
the
entire Agreement between the parties hereto and supersedes any and all prior
or
contemporaneous, oral or written understandings, negotiations, or communications
on behalf of such parties. This Agreement may be executed in several
counterparts, each of which shall be deemed original, but all of which together
shall constitute one and the same instrument. This Agreement may be delivered
by
telefax, and such telefax copy shall be as effective as delivery of a manually
executed counterpart. The waiver by either party of any breach or violation
of
any provision of this Agreement shall not operate or be construed as a waiver
of
any subsequent breach or violation hereof. This Agreement shall be deemed
executed in and shall be governed by and construed in accordance with the laws
of the State of New Jersey without giving effect to any conflict of laws
provision. This Agreement may be amended only by written agreement of both
parties hereto. The headings of the several sections, subsections and paragraphs
of this Agreement have been inserted for convenience of reference only and
shall
not be construed in determining the meaning of the provisions
hereof.
17. American
Jobs Creation Act of 2004.
Notwithstanding anything herein to the contrary, the provisions of this
Agreement are subject to the conditions and provisions of Section 885 of the
American Jobs Creation Act of 2004 (the “2004 Act”) and Code Section 409A
implemented thereby. To the extent any provision hereof would violate the
provisions of such laws, thereby potentially resulting in adverse tax
consequences to the Executive, the parties agree to negotiate, in good faith
and
to the extent possible, to modify this Agreement in order to ameliorate or
eliminate such potential adverse tax consequences to the Executive. Such
modification(s) may include, among other things, the deferral of the
commencement of severance benefits for six months to the extent required by
the
2004 Act and Code Section 409A, and the payment of accelerated lump sum amounts,
taking into account appropriate present value calculations at then relevant
applicable federal or other appropriate interest rates.
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18. Effective
Date.
The
effective date of this Agreement shall be the date first set forth
above.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused
it
to be executed, as of the date first above written.
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STERLING
BANK
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By: _____________________________
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R.
Xxxxx Xxxxxx
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Title: Executive
Vice President
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__________________________________
Xxxxxx
Xxxx
|
13
EXHIBIT
A
Form
of Release
RELEASE
AGREEMENT
THIS
RELEASE AGREEMENT (the
“Release Agreement”) is made as of this ______ day of _________, 20__, by and
between STERLING
BANK (the
“Bank”) and XXXXXX
X. XXXX (the
“Executive”). In consideration of the mutual agreements set forth below, the
Executive and the Bank hereby agree as follows:
1. General
Release.
In
consideration of the payments and benefits required to be provided to the
Executive under the Employment Agreement between Sterling Bank and the
Executive, dated January 25, 2006 (the “Agreement”) and after consultation with
counsel, the Executive, for himself and on behalf of each of the Executive’s
heirs, executors, administrators, representatives, agents, successors and
assigns (collectively, the “Releasors”) hereby irrevocably and unconditionally
releases and forever discharges the Bank, its majority owned subsidiaries and
affiliated companies, and each of its officers, employees, directors,
shareholders and agents (collectively, the “Releasees”) from any and all claims,
actions, causes of action, rights, judgments, obligations, damages, demands,
accountings or liabilities of whatever kind or character (collectively,
“Claims”), including, without limitation, any Claims under any federal, state,
local or foreign law, that the Releasors may have, or in the future may possess,
arising out of (i) the Executive’s employment relationship with and service as
an employee, officer or director of the Bank and any of its majority-owned
subsidiaries and affiliates, or the termination of the Executive’s service in
any and all of such relevant capacities, (ii) the Agreement, or (iii) any event,
condition, circumstance or obligation that occurred, existed or arose on or
prior to the date hereof; provided, however, that the release set forth herein
shall not apply to (iv) the payment and/or benefit obligations of the Bank
under
the Agreement, and (v) any claims Executive, may have under any plans or
programs not covered by the Agreement in which Executive participated and under
which Executive has accrued and become entitled to a benefit. Except as provided
in the immediately preceding sentence, the Releasors further agree that the
payments and benefits the Bank makes and provides as required by the Agreement
shall be in full satisfaction of any and all Claims for payments or benefits,
whether express or implied, that the Releasors may have against the Bank or
any
of its affiliates arising out of the Executive’s employment relationship under
the Agreement and the Executive’s service as an employee, officer or director of
the Bank under the Agreement or the termination thereof, as
applicable.
2. Specific
Release of ADEA and CEPA Claims. In
further consideration of the payments and benefits provided to the Executive
under the Agreement, the Releasors hereby unconditionally release and forever
discharge the Releasees from any and all Claims that the Releasors may have
in
connection with the Executive’s employment or termination of employment, arising
under the Federal Age Discrimination in Employment Act of 1967, as amended,
and
the applicable rules and regulations promulgated thereunder (“ADEA”), under the
New Jersey Conscientious Employee Protection Act (“CEPA”), or any other
applicable state or federal law directly affecting the employment relationship
between the Releasor and the Releasee. By signing this Release Agreement, the
Executive hereby acknowledges and confirms the following: (i) the Executive
was
advised by the Bank or his then employer in connection with his termination
of
employment or retirement to consult with an attorney of his choice prior to
signing this Release Agreement and to have such attorney explain to the
Executive the terms of this Release Agreement, including, without limitation,
the terms relating to the Executive’s release of claims arising under the ADEA
and the CEPA, and the Executive has in fact consulted with an attorney; (ii)
the
Executive was given a period of not fewer than 21 days to consider the terms
of.
this Release Agreement prior to its signing; and (iii) the Executive knowingly
and voluntarily accepts the terms of this Release Agreement.
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3. No
Assignment.
The
Executive represents and warrants that he has not assigned any of the Claims
being released hereunder.
4. Claims.
The
Executive represents that he has not instituted, assisted or otherwise
participated in connection with, any action, complaint, claim, charge,
grievance, arbitration, lawsuit, or administrative agency proceeding, or action
at law or otherwise against the Releasees. The Executive agrees that he shall
not hereafter institute, assist or otherwise participate in connection with
any
arbitration or lawsuit asserting Claims released by Section 1.
5. Revocation.
This
Release Agreement may be revoked by the Executive within the seven-day period
commencing on the date the Executive signs this Release Agreement (the
“Revocation Period”). In the event of any such revocation by the Executive, all
obligations of the parties under this Release Agreement shall terminate and
be
of no further force and effect as of the date of such revocation. No such
revocation by the Executive shall be effective unless it is in writing and
signed by the Executive and received by the Bank prior to the expiration of
the
Revocation Period. If this Release Agreement is revoked, the Executive agrees
to
return to the Bank any payments made to him in connection with the Release
Agreement other than compensation theretofore earned in the ordinary course.
In
the event of revocation, the Executive shall not be entitled to any payment
or
benefit under the Agreement, the receipt of which is conditioned on the
Executive’s execution of this Release Agreement and the absence of any
revocation prior to the expiration of the Revocation Period.
6. Non-Disparagement.
The
Executive agrees not to disparage or criticize the Releasees, or any of them,
or
otherwise speak of Releasees, or any of them, in any negative or unflattering
way to anyone with regard to any matters relating to the Executive’s employment
by the Bank or any of its affiliated companies or the business or employment
practices of such business entities. The Bank agrees, on behalf of itself and
its affiliated companies, not to disparage or criticize the Executive or
otherwise speak of the Executive in any negative or unflattering way to anyone
with regard to any matters relating to the Executive’s employment with the Bank
or any of its affiliated companies. The parties understand that this provision
is a material provision of this Release Agreement. This section shall not
operate as a bar to (i) statements reasonably necessary to be made in any
judicial, administrative or arbitral proceeding, or (ii) internal communications
between and among the employees of the Bank and its affiliated companies with
a
job-related need to know about this Release Agreement or matters related to
the
administration of this Release Agreement,
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IN
WITNESS WHEREOF, the Bank (on its behalf and on behalf of its affiliated
companies) and the Executive, intending to be legally bound, have executed
this
Release Agreement on the day and year first above written.
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STERLING
BANK
|
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By: ______________________________
|
|
|
Title: ________________________
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[CORPORATE
SEAL]
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Attest: ______________________________
|
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(Asst.)
Secretary
|
|
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______________________________(SEAL)
|
|
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Xxxxxx
X. Xxxx
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space is intentionally left blank.]
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