Exhibit 10.34
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") made as of the 4th day of
December, 2002 (the "Commencement Date") between THE TOWN BANK OF WESTFIELD, a
New Jersey banking corporation, with offices at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("TBW" or the "Company"), and XXXXXX X. XXXXXX, XX., residing at 0
Xxxxx Xxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (the "Employee").
WHEREAS, the Employee has been a loyal and long-term employee of TBW for
many years; and
WHEREAS, TBW wishes to provide the Employee with the comfort of knowing
that if the Employee loses his or her position with TBW, or any related
entities, as a result of any involuntary termination or upon a "change in
control", the Employee will be entitled to receive a severance benefit;
NOW, THEREFORE, the parties agree, intending to be legally bound, as
follows:
1. Definitions. For purposes of this Agreement, the following words and
phrases shall be defined as follows:
a. "Base Compensation" shall mean the base salary which is payable on a
regular basis to the Employee in effect immediately prior to a
termination without "cause", in the case of a Basic Severance
Benefit payable under Section 4(a) hereof, or immediately prior to a
Change in Control in the case of a Change in Control Severance
Benefit payable under Section 4(b) hereof, including the last full
calendar year's bonus and fringe benefits.
b. "Cause" shall include, but not be limited to, any material false
statement that was intentionally or negligently made, contained in
any corporate records; the commission by the Employee of any crime
or fraud against the Company or its property, or any crime involving
moral turpitude or reasonably likely to bring discredit upon the
Company; and any violation of the Company's operating policies.
c. "Change in Control" shall mean (i) the acquisition of ownership of
stock of the Company, by any person (including, without limitation,
a corporation, trust, partnership, joint venture, limited liability
company (a "Person") or by any group of Persons), whether directly,
indirectly, beneficially or of record, which acquisition, together
with stock held by such person or group, represents more than 50% of
the total voting power of all outstanding stock of the Company
(provided that no Change in Control shall occur under this
subparagraph (i) if the Person acquiring any additional stock
already possessed more than 50% of the total fair market voting
power of the stock of the Company); (ii) any merger or consolidation
of the Company which the stockholders of the Company before such
merger or consolidation do not, as a result of the merger or
consolidation, own at least 50% of the merged or consolidated
entity; or (iii) any nomination and election of 50% or more of all
members of the Board of Directors of the Company that occurs at any
three consecutive meetings of the shareholders, whose election is
without the recommendation of the Board. "Change in Control" shall
not include the acquisition of the Company's stock by any Company
employee benefit plans.
d. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
e. "Termination Date" shall mean the last day the Employee performs any
services for TBW, or any related entity or successor entity, and is
paid wages as an employee, exclusive of vacation and severance
payments, and excluding any leave of absence periods.
2. Term. The term of the Agreement shall commence on the Commencement Date,
and shall continue on an uninterrupted basis until and including December
4, 2004; or until terminated with the mutual consent of the Employee and
TBW; or upon the voluntary termination of the Employee's employment with
TBW or any successor entity. Upon the Employee's Termination Date, no
additional services shall be required of the
Employee (unless provided otherwise under any consulting agreement), and
any payments due for the performance of any services, and reimbursement
for any expenses, shall be made within a period of 15 days from the
Termination Date.
3. Condition for Severance Benefits. In order to be entitled to payment of
any severance benefits, the Employee agrees to execute a General Release
that shall fully release and forever discharge the company and any and all
related companies, form all claims the Employee may have based on
employment with the Company. These claims shall include, but are not
limited to, claims arising under the Constitution of the United States, a
release of any rights or claims the Employee may have under the Age
Discrimination in Employment Act of 1967; Title VII of the Civil Right Act
of 1964; the Civil Rights Act of 1966; the Equal Pay Act; or any other
federal, state or local laws or regulations prohibiting employment
discrimination; the Employee Retirement Income Security Act of 1974;
Executive Orders 11246 and 11141; the Constitution of the State of New
Jersey or any other states in which the Employee resides or works; any New
Jersey or other state laws against discrimination; any claims of breach of
public policy of the State of New Jersey or other state, negligence,
breach of contract, wrongful discharge, constructive discharge, breach of
an implied covenant of good faith and fair dealings; any express or
implied contracts with the Company or any related companies; any federal
or state common law and any federal, state or local statutes, ordinances
and regulations.
The General Release shall be in a format prepared by the Company, which
shall be consistent with the above provisions and shall comply with the
Older Workers Benefit Protection Act of 1990 ("OWBPA"), including a 21-day
period to review the General Release, and a 7-day revocation period (or
any other periods required under any future laws). Any severance payments
shall be the Employee's exclusive right and remedy against the Company.
4. Severance Benefits. The Employee's employment may be terminated by the
Employee or by the Company or any related entity or successor entity
"without "Cause", notice or liability at any time. Upon the occurrence of
any termination of employment, the following severance benefits shall be
provided, depending upon the specific circumstances of any termination:
a. Basic Severance Benefit. If the Company, or any related entity or
successor entity terminates the Employee's employment with the
Company for any reason, without "Cause", the Employee shall be
entitled to a Basic Severance Benefit equal to payment of the
Employee's Base Compensation for a period of six (6) months.
b. Change in Control Severance Benefit. If the Company, or any related
entity or successor entity terminates the Employee's employment in
anticipation of a reorganization or a "Change in Control", or if the
Company, or any related entity or any successor entity terminates
the Employee's employment following a Change in Control for any
other reasons without "Cause", or if the Employee's employment is
"constructively terminated" as defined in Section 8, the Employee
shall receive a payment equal to the Employee's Base Compensation
for a period of six (6) months.
Both the Basic Severance Benefit and a Change in Control Severance Benefit
shall solely be paid to the Employee in a single lump sum payment. In
either case, the applicable severance benefit shall not be paid until
eight days after receipt of an executed copy of a General Release by the
Company, as provided in Section 3. Severance benefit payments shall also
be reduced to the extent of any advance payments, for any excess expense
reimbursements, and for any amounts owed to the Company by the Employee
(other than normal personal residence, home equity and similar loans).
In the event of the death of the Employee after the commencement of
entitlement to any severance benefit payable under Section 4, all benefits
shall be paid in a lump sum to the Employee's spouse, or if no spouse
exists, to the Employee's estate.
Notwithstanding any interpretation to the contrary, in no event shall the
Employee be entitled to both the Basic Severance Benefit and the Change in
Control Severance Benefit.
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5. Benefits. Upon the occurrence of any termination of employment by the
Company, or any related entity or successor entity without "Cause", or
upon the occurrence of a "constructive termination" in accordance with
Section 8, the Employee shall be entitled to the following general
benefits.
a. All Base Compensation through the Termination Date shall be paid in
accordance with the Company's normal payroll procedures.
b. All accrued vacation pay shall be included in the Employee's final
paycheck.
c. The Employee shall be entitled to elect to receive continuation
health coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 and/or applicable New Jersey law ("COBRA") after his
Termination Date, which is the date of the "qualifying event" under
COBRA. The Company shall pay the full cost of any COBRA coverage
elected by the Employee, or any member of the Employee's immediate
family for a period of up to 12 months.
d. All medical, group-term life insurance, long-term disability,
short-term disability, and other welfare benefits shall be
terminated in accordance with the provisions of all plans. The
Employee may be entitled to individual conversion privileges under
the various policies. The Company shall provide such information to
the Employee regarding all individual conversion rights.
e. The Employee shall be entitled to a distributions of all benefits
under the Company retirement programs, in accordance with the
provisions of all Plan documents. All severance benefits paid in the
Plan Year in which the Termination Date occurs (but not any
subsequent Plan Years) shall be treated as Compensation for purposes
of Employee Salary Reduction Contributions to the Section 401(k)
Plan, if permitted in accordance with the provision of the Section
401(k) Plan, unless the Employee directs otherwise. For purposes of
all other Company Contributions, all severance benefits shall be
considered as Compensation to the extent required under the Section
401(k) Plan.
f. The Employee shall be entitled to exercise any vested Stock Options,
in accordance with the provisions of the relevant plan, and any
individual Option Agreements.
g. Any executive benefits shall terminate on the Termination Date.
h. The Employee shall be entitled to state unemployment benefits, in
accordance with the rules for the State of New Jersey.
Notwithstanding any provision to the contrary, except as provided in this
Agreement, the payment of any severance benefits shall not be treated as
extending any individual's employment for any employee benefit or
employment purposes.
6. Voluntary Termination, Retirement, Death and Disability. The Employee
shall not be entitled to any severance benefits in the event of any
voluntary termination of employment either before, or after, any Change in
Control or other corporate events, unless a "constructive termination"
shall occur, as defined in Section 8. Furthermore, notwithstanding any
provisions to the contrary, no severance benefits shall be payable in the
event the Employee becomes disabled, dies or otherwise retires in
accordance with the normal policies of the Company.
7. Discharge for Cause. The Company, or any related entity or successor
entity may immediately terminate this Agreement and the Employee's
employment at any time for "Cause". Upon termination of this Agreement for
Cause, the Company shall have no further obligations to the Employee other
than to pay for services performed and reimbursement for expenses payable
as of the date of such termination, and to provide any benefits as legally
required under Section 4. However, the Employee shall have no right to the
payment of any Basic Severance or Change in Control Severance Benefits in
the event of a termination for "Cause".
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8. Change in Control.
a. Upon the occurrence of a "Change in Control" of the Company,
including any affiliated or subsidiary companies, followed by the
involuntary termination of the Employee's employment within a period
of one year after such Change in Control, other than for "Cause",
retirement, death or disability, the Employee shall be entitled to
receive all severance benefits identified in Sections 4(b) and 5 of
the Agreement, and any other benefits to which the Employee is
entitled under any other Company programs. Upon the occurrence of a
Change in Control and a "Constructive Termination" of the Employee,
the Employee shall also have the right to voluntarily terminate the
Employee's employment at any time for a period of up to one year
after such Change in Control, and to receive the severance benefits
identified in Section 4(b) and 5. For purposes of this Agreement, a
"Constructive Termination" shall mean (i) a resignation by the
Employee due to any diminution or adverse change in the
circumstances of his employment (as determined by him in good
faith), including, without limitation, his reporting relationships,
job description, duties, responsibilities, compensation,
perquisites, office or location of employment, or (ii) a decision by
the Employee not to accept an offer of employment with a successor
to Employer. The specific arrangement referred to above are not
intended to exclude the Employee's participation in any other
benefits available to executive personnel of the Company or any
related entity or successor entity. Upon the occurrence of any of
these events, the Employee shall provide the Company with not less
than fourteen days prior written notice of resignation given within
a reasonable period of time not to exceed three months after the
occurrence of the last event giving rise to said Constructive
Termination. If the Company in good faith disputes that the Employee
is entitled to terminate the Employee's employment due to a
Constructive Termination, it shall so inform the Employee in writing
within fourteen days of the written notice provided by the Employee.
Pending resolution of the dispute, the Company shall continue to pay
the Employee's Base Compensation and benefits. If it is ultimately
determined that the Employee did not have grounds for voluntarily
terminating the Employee's employment, the Employee shall return to
the Company, without interest, all cash compensation received by the
Employee subsequent to the day the Employee's employment was
terminated.
b. If all or any portion of the amounts payable to the Employee under
this Agreement, either alone or together with other payments which
the Employee has the right to receive from the Company or any
related entity or successor entity, constitute "excess parachute
payments" within the meaning of Section 280G of the Code that are
subject to the excise tax imposed by Section 4999 of the Code (or
any successor sections), the Company or any related entity or
successor entity shall increase the amounts payable hereunder to the
extent necessary to place the Employee in the same after-tax
position as he would have been and had no such excise tax been
imposed on the payments hereunder. The determination of the amount
of any such excise taxes shall initially be made by the independent
accounting firm employed by the Company immediately prior to the
Change in Control.
If at a later date it is determined (pursuant to final regulations
or published rulings of the Internal Revenue Service, assessment by
the Internal Revenue Service or otherwise) that the amount of excise
taxes payable by the Employee is greater than the amount initially
so determined, then the Company or any related entity or successor
entity shall pay the Employee an amount equal to the sum of (A) such
additional excise taxes, plus (B) any interest, fines and penalties
with respect to such additional excise taxes, plus (C) the amount
necessary to reimburse the Employee for any income, excise or other
taxes payable by the Employee with respect to the amounts specified
in (A) and (B) above and the reimbursement provided by this clause
(C).
9. Waivers. A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach
thereof. All rights, remedies, undertakings or obligations contained in
this Agreement shall be cumulative and none of them shall be in limitation
of any other right, remedy, undertaking or obligations of either party.
10. Severability. If any one or more provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect
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any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal and unenforceable provision had
never been contained herein.
11. Liability Coverage. The Company, and any related entity or successor
entities agrees to indemnify the Employee in accordance with the terms of
TBW Bylaws. The Company also agrees to continue to provide any existing
officers and directors insurance and/or liability policies covering the
Employee through any Termination Date, and shall use its best efforts to
continue to maintain the policies in effect at the time of termination or
comparable policies covering the Employee for the Employee's period of
employment with the Company, and for a period of six years after the date
of any termination. In no event shall the Employee receive any lesser
officers and directors protection, than is provided to the current active
Board of Directors.
12. Execution of Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
13. Entire Agreement. This Agreement contains the entire agreement between the
Employee and the Company with respect to the transactions contemplated
herein and supersedes all previous written and oral agreements,
negotiations, commitments, and understandings between the Company and the
Employee with respect to the subject matter of this Agreement. Its terms
shall not be altered or otherwise amended except pursuant to an instrument
in writing signed by each of the parties hereto and making specific
reference to this Agreement.
14. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Employee, his or her heirs, executors, administrators, and
legal representations, and the Company, its successors and assigns.
15. Amendment. This Agreement may not be altered, changed, amended or
terminated except by written agreement signed by the Employee and the
Company.
16. Written Notices. Any notice, request or other document to be give
hereunder by the Company to the Employee or by the Employee to the Company
shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid and addressed as follows:
If to the Company:
The Town Bank of Westfield
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Chairman of the Board
If to the Employee:
Xxxxxx X. Xxxxxx, Xx.
0 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
17. New Jersey Law. The Employee and the Company agree that this Agreement and
any interpretation thereof shall be governed by the laws of the State of
New Jersey.
18. Headings. The headings contained in this Agreement are for reference only.
In the event of a conflict between a heading and the context of any
Section, the context of the Section shall control.
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19. Successor Obligations. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to the Employee expressly to
assume and agree to perform all obligations of this Agreement.
WITNESS:
/s/ Xxxxxxxx X. Xxxxxxxxx, Xx. /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------ -------------------------------------------
Xxxxxx X. Xxxxxx, Xx., Employee
WITNESS: THE TOWN BANK OF WESTFIELD
/s/ Xxxxxxxx X. Xxxxxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ ----------------------------------------
Xxxxxx X. Xxxxxxxx
Chairman of the Board of Directors
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FIRST AMENDMENT TO SEVERANCE AGREEMENT
MADE AS OF DECEMBER 4, 2002
Xxxxxx X. Xxxxxx, Xx. (the "Employee") and Town Bank, formerly known as
The Town Bank of Westfield (the "Bank") have previously entered into a Severance
Agreement made as of December 4, 2002 (the "Agreement"). The parties have agreed
that the term of that Agreement should be extended and, accordingly, agree:
(1) The reference to December 4, 2004 in Paragraph 2 of the Agreement is
hereby amended to read December 31, 2005.
(2) Except for that change, the Agreement shall remain in full force and
effect and the parties hereby ratify and affirm all terms of the
Agreement.
WITNESS:
/s/ Xxxxxxxx X. Xxxxxxxxx, Xx. /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------- -----------------------------------------
XXXXXX X. XXXXXX, XX., Employee
ATTEST: TOWN BANK
/s/ Xxxxxxxx X. Xxxxxxxxx, Xx. By: /s/ Xxxxxx F. X. X'Xxxxxxxx
------------------------------- -------------------------------------
Xxxxxx F.X. X'Xxxxxxxx, Chairman
of the Board of Directors
December 20, 2004
