RESIGNATION AGREEMENT
THIS RESIGNATION AGREEMENT (this "Agreement"), is entered into as of July
14, 2000 by and among Xxxxxx United Bancorp ("HUB"), and Xxxxx X. Xxxxx
(hereinafter referred to as "Xxxxx").
BACKGROUND
WHEREAS, Xxxxx is currently a member of the Board of Directors of HUB; and
WHEREAS, Xxxxx is resigning, effective today, as a Director of
HUB and will not be a nominee for election as a Director of HUB at the 2000
Annual Meeting of HUB; and
WHEREAS, Xxxxx desires to sell, and desires to have certain persons and
entities affiliated with her and listed on Exhibit A hereto (the "Xxxxx
Affiliates") sell, an aggregate of 908,612.348 shares of HUB common stock, which
shares are listed on Exhibit A hereto (the "Shares") to HUB at a price which is
a premium above the current market price of HUB common stock and desires to
receive certain other benefits relating to her Supplemental Employee Retirement
Plan ("SERP"); and
WHEREAS, in consideration of HUB's agreement to purchase the Shares and the
additional benefits being given to Xxxxx with respect to the SERP, Xxxxx has
agreed to be subject to the terms and conditions of this Agreement and, on or
before the Closing referred to herein at which their Shares are purchased, the
Xxxxx Affiliates will execute and deliver to HUB a copy of this Agreement
agreeing to be bound by the provisions of Article III hereof. (For those Xxxxx
Affiliates which are trusts, the individuals for whose benefit the trusts are
formed will execute and deliver to HUB a copy of this Agreement agreeing to be
bound by the provisions of Article III hereof, and all
references in this Agreement to "Xxxxx Affiliates" shall be deemed to be
references to such individuals for such purposes.)
NOW, THEREFORE, for good and valuable consideration, HUB and Xxxxx (and
with respect to Article III the Xxxxx Affiliates who execute and deliver to HUB
a copy of this Agreement), each intending to be legally bound hereby, agree as
follows:
ARTICLE I
TERM OF AGREEMENT
The term of the covenants under this Agreement shall commence on the date
hereof, and shall continue in effect for a period of five (5) years (hereinafter
the "Term").
ARTICLE II
STOCK PURCHASE
2.1 PURCHASE AND SALE OF SHARES. Subject to the terms and conditions of
this Agreement, HUB agrees to purchase and acquire from Xxxxx and the Xxxxx
Affiliates, and Xxxxx agrees to sell, assign, transfer and deliver to HUB (or
cause the Xxxxx Affiliates to sell, assign, transfer and deliver to HUB, as the
case may be) the Shares, free and clear of all liens and encumbrances. Xxxxx
represents and warrants that all the Shares were beneficially owed by her or her
immediate family for a period of more than six (6) months (or the Shares and the
options pursuant to which the Shares were acquired were beneficially owned for
an aggregate of more than six (6) months) and that the Shares listed on Exhibit
A hereto represent all of the Shares beneficially owed by her and all of the
Shares beneficially owned by her family. The purchase and sale of the Shares
shall occur on a date mutually agreed by HUB and Xxxxx, but not later than July
17, 2000 (the "Closing Date"); provided that if, on the Closing Date, Xxxxx has
not collected the signatures
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of all Affiliates on copies of this Agreement for delivery to HUB and/or all
Affiliates are not prepared to close (in person or through powers of attorney in
form reasonably satisfactory to HUB), then the closing of the purchase and sale
of the Shares shall occur only as to those shares as to which such conditions
are met and a subsequent closing shall occur as to the remaining shares (without
any interest or other increase in the purchase price arising from the delay) on
a date mutually agreed by HUB and Xxxxx (also a "Closing Date"), but in no event
more than five business days following written notice from Xxxxx to HUB that she
has collected the signatures of all Affiliates on copies of this Agreement for
delivery to HUB and that she and the Affiliates are prepared to close (in person
or through powers of attorney in form reasonably satisfactory to HUB) on all
remaining shares.
2.2 PURCHASE PRICE FOR SHARES. As consideration for the Shares, HUB shall
pay to Xxxxx (or to Xxxxx and one or more of the Xxxxx Affiliates if so directed
by Xxxxx in writing), on the Closing Date, against delivery of the Shares,
$25.625 per Share. Based on all 908,612.348 Shares being purchased and sold, the
total consideration for the Shares would be $23,283,191.42. Payment shall be
made by wire transfer in immediately available funds to an account specified by
Xxxxx in writing (or divided among multiple accounts as may be specified by
Xxxxx in writing). Purchase and sale of the Shares on the Closing Date is
referred to herein as the "Closing".
2.3 POST-CLOSING PURCHASE PRICE ADJUSTMENT. The parties shall consult the
Wall Street Journal to determine the closing price of HUB common stock on each
trading day during the period (the "Measurement Period") beginning on July 14,
2000 and ending on (and including) September 8, 2000. At the conclusion of the
Measurement Period, the parties shall determine the average of the five highest
closing prices during the Measurement Period (the "Five High Day Average"). If
the Five High Day Average exceeds $25.625, then on September 11, 2000, HUB
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shall pay to Xxxxx (or to Xxxxx and one or more of the Xxxxx Affiliates if so
directed by Xxxxx in writing) as additional consideration for the Shares (by
wire transfer in immediately available funds to the account or accounts
previously specified by Xxxxx in writing) an amount equal to such excess
multiplied by the number of Shares which HUB had purchased at the Closing.
ARTICLE III
STANDSTILL
Xxxxx agrees that she will not, will cause her spouse not to, and will urge
the rest of her immediate family not to, alone or in concert with others,
directly or indirectly, during the Term, do any of the things listed in clauses
(i) through (vii) below. Each Xxxxx Affiliate who has executed and delivered to
HUB a copy of this Agreement agrees that he, she or it will not, will cause his
or her spouse (if any) not to, and will urge the rest of his or her immediate
family (if any) not to, alone or in concert with others, directly or indirectly,
during the Term, do any of the things listed in clauses (i) through (vii) below:
(i) beneficially own any voting securities of HUB,
(ii) propose to HUB or any other person any transaction between any
person or entity with whom Xxxxx is affiliated, whether directly or
indirectly, as shareholder, employee, director, officer, principal or
agent, or in any other capacity, and HUB and/or its security holders or
involving any of its securities or security holders.
(iii) assist, advise or encourage any other persons in acquiring,
directly or indirectly, control of HUB or any of HUB's securities,
businesses or assets,
(iv) solicit proxies or initiate, propose or become a "participant" in
a "solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act) in opposition
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to any matter which has been recommended by the majority of members of the
Board of Directors of HUB or in favor of any matter which has not been
approved by a majority of the Directors of HUB,
(v) act to seek to affect or influence the control of the management
or Board of Directors of HUB or its business operations or affairs, or make
any public statements with respect thereto,
(vi) act for the purpose of acquiring, holding, voting or disposing of
voting securities of the Company, or otherwise become a "person" or a
member of a "group" within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, or
(vii) aid or abet or otherwise induce any person to take any of the
actions enumerated in (i) through (vi) of
this Article III.
If a publicly held company with which Xxxxx is affiliated as a director but
which she does not control takes any action set forth above, such action shall
not be deemed a breach of this Article III if Xxxxx has neither suggested,
initiated nor encouraged such action, nor participated in the company's
consideration of such action.
Xxxxx agrees that she will, will cause her spouse to, and will urge the
rest of her immediate family to, vote all shares held of record as of the record
date for HUB's 2000 Annual Meeting in accordance with the recommendations of HUB
management. Each Xxxxx Affiliate who has executed and delivered to HUB a copy of
this Agreement agrees that he, she or it will, will cause his or her spouse (if
any) to, and will urge the rest of his or her immediate family (if any) to, vote
all shares held of record as of the record date for HUB's 2000 Annual Meeting in
accordance with the recommendations of HUB management.
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ARTICLE IV
NON-DISPARAGEMENT
During the Term, Xxxxx shall not directly or indirectly herself or through
her immediate family make or cause to be made any written or oral statement
disseminated outside of her immediate family which does, is intended to, or
which a reasonable person hearing or reading the statement would assume is
intended to, disparage HUB or a subsidiary of HUB, or any director, officer or
employee of HUB or of any of its subsidiaries with respect to any matter
relating to or reflecting on their business or the conduct of their business.
During the Term, HUB shall, and shall cause its subsidiaries or other
entities over which it exercises control not to, not directly or indirectly
itself or through its directors or officers make or cause to be made any written
or oral statement disseminated outside of HUB or such subsidiaries or other
entities which does, is intended to, or which a reasonable person hearing or
reading the statement would assume is intended to, disparage Xxxxx with respect
to any matter relating to or reflecting on Xxxxx'x service as an officer or
director of HUB or its predecessors or affiliates, or on the businesses
conducted by her or her conduct with respect to those businesses.
ARTICLE V
ACCELERATION OF SERP
Pursuant to Section 5.b of the Employment Agreement dated as of March 19,
1997 but effective as of January 1, 1997, as between JeffBanks, Inc.
("JeffBanks") and Xxxxx (the "Employment Agreement"), a "SERP" was established
for the benefit of Xxxxx (the "SERP"). In the Termination of Employment
Agreement dated as of March 31, 2000, between Xxxxx and HUB, for itself and as
successor by merger to JeffBanks (the "Termination Agreement"), the Employment
Agreement was terminated. However, Section 3 of the Termination Agreement
provided, among
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other things, that the termination of the Employment Agreement was not to affect
Xxxxx'x rights under the SERP. In consideration of the mutual promises provided
hereunder, HUB hereby agrees to accelerate the date as of which the SERP
benefits will commence to Xxxxx to the first day of the calendar month following
the month in which she attains age sixty (60). At that time, she will begin to
receive $ 28,437.50 per month for her life until the month of her death, except
that in the event that her death occurs prior to her receipt of at least one
hundred twenty (120) months of retirement benefits under the SERP, then such
retirement benefits shall continue to be paid to Xxxxx'x estate (or designated
beneficiary, as applicable) until a total of one hundred twenty (120) months of
such benefits shall have been paid. Notwithstanding the last clause of the
preceding sentence, any payments due to Xxxxx'x estate (or designated
beneficiary, as applicable) following her death under the SERP shall be paid to
the estate (or designated beneficiary, as applicable) in a lump sum within six
(6) months after her death, calculated as the present value of the remaining
payments due, discounted using the then current Federal Reserve Bank Discount
Rate, plus one percent (1%). In addition, HUB agrees to establish a grantor
trust (the "Rabbi Trust") with a trustee to be mutually agreed upon by HUB and
Xxxxx. Within thirty (30) days of the date hereof, HUB will contribute such
assets to the Rabbi Trust as are mutually agreed by HUB and Xxxxx to be
reasonably necessary to fund the SERP benefits, described herein, using a 7.5%
discount rate. HUB and Xxxxx shall mutually agree on the types of investments
which are to be made by the Rabbi Trust, and the agreement governing the Rabbi
Trust shall provide that, upon a change in control of HUB, additional assets
shall be contributed to the trust, if and to the extent necessary so that the
trust has a level of assets at the time of the change in control at least as
high as it would have had if the investments made by the trust between the date
of its creation and the date of the change in control had earned a 7.5% rate of
return.
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ARTICLE VI
AGREEMENTS REGARDING OFFICE
On or before July 15, 2000, Xxxxx shall terminate her use of the office
space currently occupied by her at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx. Xxxxx shall be entitled to retain, without additional payment to
HUB, the office furniture and furnishings currently located at the office space
currently occupied by her at 0000 Xxxxxx Xxxxxx which are described on Exhibit B
hereto.
ARTICLE VII
MISCELLANEOUS
7.1 SPECIFIC PERFORMANCE. In the event of an actual or threatened breach by
Xxxxx of any of the covenants contained in this Agreement, it is agreed that HUB
and its respective successors shall be entitled, in addition to any other
remedies at law, to injunctive relief restraining Xxxxx from committing or
attempting such breach.
7.2 CHANGES. This Agreement may not be modified, changed, amended, or
altered except in a writing signed by Xxxxx and HUB.
7.3 NOTICES. All notices given or required to be given herein shall be in
writing and be hand-delivered or sent by United States first-class certified or
registered mail, return receipt requested, postage prepaid, to Xxxxx at the
last-known residence or business address for Xxxxx, and to HUB at the principal
executive office for HUB (or any successor thereto), to the attention of the
Chief Executive Officer. All such notices shall be effective when received or
open refusal of the addressee to accept delivery. Either party by a notice in
writing to the other party may change or designate the place for receipt of such
notices.
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7.4 NON-ASSIGNABILITY. This Agreement is personal to each of the parties
and none of the parties may assign or delegate any of its rights or obligations
under this Agreement without the prior written consent of the other party.
7.5 ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated hereby, and
supersedes all prior negotiations, arrangements or understandings, written or
oral, with respect thereto. Except as specifically contemplated hereby, this
Agreement does not affect any existing agreement between the parties hereto, or
between either party hereto (or an affiliate of that party) and an affiliate of
the other party.
7.6 GOVERNING LAW. This Agreement shall be governed in all respects and be
interpreted by and under the laws of the State of New Jersey.
7.7 JURISDICTION; SERVICE. The federal and state courts located within the
State of New Jersey shall have exclusive jurisdiction with respect to any legal
proceeding brought to enforce any aspect of this Agreement. Service of process
may be effected by regular mail to the corporate headquarters of HUB and to the
last known residence or business address of Xxxxx.
7.8 LEGAL FEES. HUB shall reimburse Xxxxx for the reasonable legal fees and
expenses incurred by Xxxxx in connection with the negotiation of this Agreement
not to exceed $5,000 ($10,000 when combined with fees and expenses for Xxxxxxx
Xxxx).
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the date and year first written above.
XXXXXX UNITED BANCORP
By: ___________________________
Xxxxxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
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XXXXX X. XXXXX
The undersigned "Xxxxx Affiliates" have executed and delivered to HUB a copy of
this Agreement, thereby evidencing our intent to be bound by Article III hereof:
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