AGREEMENT FOR LEGAL SERVICES
THIS AGREEMENT for legal services made this 27th day of April, 1995, by
and between:
ANDORA, XXXXXXXXX & XXXXXX
A Professional Corporation
303 Xxxxxx Drive, X.X. Xxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
hereinafter referred to as "Attorneys",
and
INTERCHANGE FINANCIAL SERVICES CORPORATION
Park 00 Xxxx, Xxxxx Xxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
and
INTERCHANGE STATE BANK
A Banking Corporation
Park 00 Xxxx, Xxxxx Xxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
hereinafter referred to as "Clients".
IN CONSIDERATION of the mutual promises, covenants and undertakings
contained herein the Attorneys and the Clients agree as follows:
1. RETAINER
Clients hereby retain the services of Attorneys to act as its corporate
counsel for the term and compensation as outlined herein.
2. TERM
The Attorneys shall be retained by Clients until the next annual
reorganization meeting of Clients.
3. COMPENSATION
The Clients shall pay the Attorneys for services rendered as corporate
counsel an annual retainer of NINETY-FIVE THOUSAND DOLLARS ($95,000.00) payable
in equal monthly installments on the first day of each and every month
commencing the first day of the month following the execution of this Agreement.
Clients shall, in addition to the annual retainer, pay to the Attorneys all
out-of-pocket expenses, filing fees, or disbursements made by the Attorneys on
Clients' behalf. Clients shall, in addition to the payment of the annual
retainer and all costs, pay to the Attorneys a legal fee based on the rate per
hour as shown on Schedule A for all legal services provided to Clients by the
Attorney which are "legal services rendered in addition to those rendered as
corporate counsel." Such fees and costs shall be billed by Attorneys to clients
on a thirty-day basis and Clients shall pay all bills within five (5) days after
each monthly Board of Director's meeting of the Clients.
4. DEFINITIONS
The following words and phrases shall have the following meanings:
A. "Legal services rendered as corporate counsel" shall mean and include
all of the following types of legal work:
1. Except as hereinafter set forth in subparagraph B, document
review and drafting of documents on behalf of the Clients
including, but not limited to: leases, notes, contracts,
mortgages, commitment letters, disclosure statements,
modifications, extensions and legal agreements not related to
third-party borrowers, except residential mortgage reviews.
2. Providing legal advice required in the usual course of
Clients' business including compliance analysis.
3. Attendance at Board of Director's and Shareholders' Meetings
other than as a Director.
4. Advice regarding levies and executions
5. Preparation of annual SEC 10K, 10Q and "ordinary" proxy
filings.
B. "Legal services rendered in addition to those rendered as general
corporate counsel" shall mean and include, but not be limited to, all
of the following types of legal work which shall be billed on an
hourly basis:
1. Litigation in which Clients are named as defendants.
2. Litigation or other proceedings in which Clients and another
person or agency (i.e., Small Business Administration)
specially retain Attorney. The hourly rate for such legal
services shall be specifically agreed upon by Clients, the
agency, and Attorneys.
3. Foreclosure litigation, including lien protection litigation
in any Court including the Bankruptcy Court.
4. Regulatory or administrative law proceedings including but
not limited to Department of Banking, zoning agencies,
N.L.R.B., F.D.I.C., and Tax Court.
5. Loan reviews and closings, including modifications and
extensions thereof, except that the fee shall be based upon
$250.00 per hour plus costs and such fee shall not exceed
1/2% of the principal amount of the loan plus costs but in
no event shall such fee be less than $250.00.
6. Closings in which the bank is a buyer or seller.
7. SEC Filings other than annual 10K, 10Q or "ordinary" proxy
filings.
8. Mergers and Acquisitions.
9. All other legal services not specifically set forth in
Paragraph 4A.
5. BINDING EFFECT
This agreement shall be binding upon and shall inure to the benefit of
the parties' successors or assigns.
6. NO ASSIGNMENT
This agreement shall not be assigned or sublet without the express
written consent of the parties.
7. LAW APPLICABLE
This agreement shall be governed by the laws of the State of New
Jersey.
8. SEVERABILITY
In the event any clause, section or paragraph of this agreement shall be
declared invalid or unenforceable by a court of competent jurisdiction, such
invalid or unenforceability shall not affect the remainder of this Agreement.
IN WITNESS WHEREOF the parties have hereunto signed this agreement the date
first above written.
INTERCHANGE STATE BANK
ATTEST:
/s/Xxxxxxxx Xxxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
----------------------------- ---------------------------
Xxxxxxxx Xxxxxxxxxx, Secretary Xxxxxxx X. Xxxxxx, President
INTERCHANGE FINANCIAL SERVICES CORPORATION
ATTEST:
/s/Xxxxxxxx Xxxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ ---------------------------
Xxxxxxxx Xxxxxxxxxx, Secretary Xxxxxxx X. Xxxxxx, President
ANDORA, XXXXXXXXX & XXXXXX
ATTEST:
s/xXxxx X. Xxxxxxxxx, s/xXxxxxxx X. Xxxxxx
---------------------------- ----------------------------
Xxxx X. Xxxxxxxxx, Secretary Xxxxxxx X. Xxxxxx, President
SCHEDULE A
The hourly rates contained herein are subject to change on the anniversary
dates of the Agreement of Legal Services.
Schedule A, reviewed and approved at Annual Reorganization Meeting on April
27, 1995.
Xxxxxx X. Xxxxxx $250.00 per hour
Xxxx X. Xxxxxxxxx $250.00 per hour
Xxxx X. Xxxxxx $250.00 per hour
Other Partners and
Senior Associates $175.00 per hour
Other Associates $150.00 per hour
May 22, 1995
Xx. Xxxxxxx X. Xxxxxx
0 Xxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not
voluntarily leave the employ of the Company except as may be permitted
hereunder, and will continue to perform your regular duties as President
and Chief Executive Officer of the Company. Notwithstanding the foregoing,
the Company may terminate your employment at any time, subject to providing
the benefits hereinafter specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of three consecutive years,
individuals who at the beginning of such period constitute the Board cease
for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of
each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within three (3) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph
(i) or (ii) above or by you pursuant to subparagraph (B) of
paragraph (i) or paragraph (iii) above shall be communicated by
written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean
a notice which shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is
terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned
to the performance of your duties on a full-time basis during
such thirty (30) day period), (B) if your employment is
terminated pursuant to paragraph (ii) above, the date specified
in the Notice of Termination, and (C) if your employment is
terminated for any other reason, the date on which a Notice of
Termination is given; provided that if within thirty (30) days
after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding and final
arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction entered upon such arbitration
award (the time of appeal therefrom having expired and no appeal
having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) The Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given plus credit for any vacation earned but not taken and the
amount, if any, of any bonus for a past fiscal year and the portion of
the current fiscal year ending on the Date of Termination which has
not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to three (3) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses incurred
by you as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit
provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) three (3) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment three (3)
additional years of Credited Service and deemed 3 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment provided
for in this Section 4 by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer
after the Date of Termination or otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company 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 Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /S/Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title:Chairman of the Board
Agreed to this 26th day of May, 1995.
/s/Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President & CEO
Attest by: /s/Xxxxxxxx Xxxxxxxxxx
----------------------
Xxxxxxxx Xxxxxxxxxx, Secretary
May 22, 1995
Xx. Xxxxxx X. Xxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxxx:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not voluntarily
leave the employ of the Company except as may be permitted hereunder, and
will continue to perform your regular duties as Executive Vice President of
the Company. Notwithstanding the foregoing, the Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within two (2) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to subparagraph (B) of paragraph (i) or
paragraph (iii) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (B)
if your employment is terminated pursuant to paragraph (ii) above, the
date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within thirty (30)
days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or
by a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time of appeal
therefrom having expired and no appeal having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below: (i) The Company shall pay you your full base
salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given plus credit for any vacation earned but not
taken and the amount, if any, of any bonus for a past fiscal year and the
portion of the current fiscal year ending on the Date of Termination which
has not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to two (2) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) two (2) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment two (2)
additional years of Credited Service and deemed 2 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination or
otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company 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 Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /s/Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
Agreed to this 8 day of June, 1995.
/s/Xxxxxx X. Xxxxxx
-------------------
Xxxxxx X. Xxxxxx
Executive Vice President
Chief Financial Officer
Attest by: /s/Xxxxxxxx Xxxxxxxxxx
----------------------
Xxxxxxxx Xxxxxxxxxx, Secretary
May 22, 1995
Xx. Xxxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not voluntarily
leave the employ of the Company except as may be permitted hereunder, and
will continue to perform your regular duties as Senior Vice President of
the Company. Notwithstanding the foregoing, the Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within two (2) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to subparagraph (B) of paragraph (i) or
paragraph (iii) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (B)
if your employment is terminated pursuant to paragraph (ii) above, the
date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within thirty (30)
days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or
by a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time of appeal
therefrom having expired and no appeal having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) The Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given plus credit for any vacation earned but not taken and the
amount, if any, of any bonus for a past fiscal year and the portion of
the current fiscal year ending on the Date of Termination which has
not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to two (2) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) two (2) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment two (2)
additional years of Credited Service and deemed 2 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination or
otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company 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 Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /s/Xxxxxxx X. Xxxxxx
-------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
Agreed to this 8 day of June, 1995.
/s/Xxxxxxx X. Xxxxxxxx
----------------------
Xxxxxxx X. Xxxxxxxx, Xx. Vice President
Sr. Loan Office
Attest by: /s/Xxxxxxxx Xxxxxxxxxx
-----------------------
Xxxxxxxx Xxxxxxxxxx, Secretary
May 22, 1995
Xx. Xxxxx X. Xxxxxxxx
00 Xxxxxxxxxx Xxx
Xxxx Xxxx, XX 00000
Dear Xx. Xxxxxxxx:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not voluntarily
leave the employ of the Company except as may be permitted hereunder, and
will continue to perform your regular duties as Senior Vice President of
the Company. Notwithstanding the foregoing, the Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within two (2) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to subparagraph (B) of paragraph (i) or
paragraph (iii) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (B)
if your employment is terminated pursuant to paragraph (ii) above, the
date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within thirty (30)
days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or
by a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time of appeal
therefrom having expired and no appeal having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) The Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given plus credit for any vacation earned but not taken and the
amount, if any, of any bonus for a past fiscal year and the portion of
the current fiscal year ending on the Date of Termination which has
not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to two (2) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) two (2) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment two (2)
additional years of Credited Service and deemed 2 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination or
otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company 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 Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /s/Xxxxxxx X. Xxxxxx
--------------------
Name:Xxxxxxx X. Xxxxxx
Title:Chairman of the Board
Agreed to this 2 day of June, 1995.
/s/Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx, Xx. Vice President
Attest by: /s/Xxxxxxxx Xxxxxxxxxx
----------------------
Xxxxxxxx Xxxxxxxxxx, Secretary
