AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(XXXXXX X. XXXXXX)
THIS AMENDED AND RESTATED CHANGE IN CONTROL EMPLOYMENT AGREEMENT
(the "Agreement"), is made as of this 1st day of January, 1999, among VALLEY
NATIONAL BANK ("Bank"), a national banking association with its principal office
at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx, XXXXXX NATIONAL BANCORP ("Valley"), a
New Jersey Corporation which maintains its principal office at 0000 Xxxxxx Xxxx,
Xxxxx, Xxx Xxxxxx (Valley and the Bank collectively are the "Company") and
XXXXXX X. XXXXXX (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by Valley and the Bank for
many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Valley;
WHEREAS, the Board of Directors of the Bank and Valley believe that
the future services of the Executive are of great value to the Bank and Valley
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders,
without concern that the Executive might be distracted by the personal
uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined; and
WHEREAS, the Executive and the Company had entered into a Change in
Control Agreement, dated January 1, 1995, and have agreed to amend and restate
that agreement with this Agreement.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of an acquisition
or a bid to take over control of the Company, and to induce the Executive to
remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive, each intending to be legally bound
hereby, agree as follows:
1. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for the
Company under this Agreement after at least one warning in writing from the
Boards of Directors of the Company identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes material
injury to the Company as specified in a written notice to the Executive from the
Boards of Directors of the Company; or (iii) conviction of a crime (other than a
traffic violation), habitual drunkenness, drug
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abuse, or excessive absenteeism (other than for illness), after a warning
(required with respect to drunkenness or absenteeism only) in writing from the
Boards of Directors of the Company to refrain from such behavior. No act or
failure to act on the part of the Executive shall be considered willful unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the action or omission was in the best interests of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Valley or a Subsidiary acquires actual knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than an affiliate of Valley or a Subsidiary or an employee benefit
plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act) directly or indirectly, of securities of Valley
representing more than twenty-five percent (25%) of the combined voting power of
Valley's then outstanding securities (a "Control Person"); (ii) upon the first
purchase of Valley's common stock pursuant to a tender or exchange offer (other
than a tender or exchange offer made by Valley, a Subsidiary or an employee
benefit plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates); (iii) the consummation of (A) a merger or consolidation
of Valley with or into another corporation unless the definitive agreement
provides that at least two-thirds of the directors of the surviving or resulting
corporation immediately after the transaction are directors of Valley before the
transaction commenced (a "Non-Control Transaction"), (B) a sale or disposition
of all or substantially all of Valley's assets or (C) a plan of liquidation or
dissolution of Valley; (iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board (the
"Continuing Directors") cease for any reason to constitute at least two-thirds
thereof or, following a Non-Control Transaction, two-thirds of the board of
directors of the surviving or resulting
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corporation; provided that any individual whose election or nomination for
election as a member of the Board (or, following a Non-Control Transaction, the
board of directors of the surviving or resulting corporation) was approved by a
vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director; or (v) upon a sale of (A) common stock of the
Bank if after such sale any person (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) other than Valley, an employee benefit plan
established or maintained by Valley or a Subsidiary, or an affiliate of Valley
or a Subsidiary, owns a majority of the Bank's common stock or (B) all or
substantially all of the Bank's assets (other than in the ordinary course of
business).
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) the third anniversary of the Change in Control or (ii) the date
the Executive would attain age 65 or (iii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to have occurred
at the date specified in the definition of Change in Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express prior written
consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or functions associated with,
Executive's position, title, duties, responsibilities and status with the
Company immediately prior to a Change in Control; any removal of Executive from,
or any failure to re-elect Executive to, any position(s) or office(s) Executive
held immediately prior to such Change in Control.
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(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the Change in Control
(except that the Company may institute plans, programs or arrangements providing
the Executive substantially similar benefits) or a failure by the Company to
continue Executive as a participant in such plans on at least the same basis as
Executive participated in such plan prior to the Change in Control; or a failure
to pay the Executive the bonus provided for in Section 4.b hereof at the time
and in the manner therein specified;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his present
office location, except for required occasional travel on the Company's business
to an extent consistent with Executive's business travel obligations immediately
prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's retirement plan, benefit equalization plan, split-dollar life
insurance agreement for the Executive, health and accident plan, disability
plan, deferred compensation plan or long term stock incentive plan) in which
Executive is participating immediately prior to a Change in Control (except that
the Company may institute or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the taking of any action by the
Company which would adversely affect Executive's participation in or materially
reduce Executive's benefits under, any of such plans, programs or arrangements;
the failure to continue, or the taking of any action which would deprive
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Executive, of any material fringe benefit enjoyed by Executive immediately prior
to such Change in Control; or the failure by the Company to provide Executive
with the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive prior
to any Change in Control; or
(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which is not effected pursuant
to all of the requirements of this Agreement; and, for purposes of this
Agreement, no such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
2. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed as Chairman and Chief Executive Officer of Valley and the Bank, or such
other corporate or divisional profit center as shall then be the principal
successor to the business, assets and properties of the Company, with the same
title and with the same duties and responsibilities as before the Change in
Control. The Executive shall devote his full time and attention to the business
of the Company, and shall not during the Contract Period be engaged in any other
business activity. This paragraph shall
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not be construed as preventing the Executive from managing any investments of
his which do not require any service on his part in the operation of such
investments or from continuing to serve on any boards of directors or trustees
which he served prior to the Change in Control or for which consent is provided
by the Board after a Change in Control.
4. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual salary shall be payable
in installments in accordance with the Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three years prior to the
Change in Control. The bonus shall be payable at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously reimbursed to him immediately prior to the
Change in Control.
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b. Benefit Equalization Plan. During the Contract Period, if
the Executive was entitled to benefits under the Company's Benefit Equalization
Plan ("BEP") prior to the Change in Control, the Executive shall be entitled to
continued benefits under the BEP after the Change in Control and such BEP may
not be modified or terminated to reduce or eliminate such benefits during the
Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, during the Contract Period he shall be entitled to the
same membership and/or use of an automobile at least comparable to the
automobile provided to him prior to the Change in Control.
d. Other Benefits. During the Contract Period, the Executive
also shall be entitled to vacations and sick days, in accordance with the
practices and procedures of the Company, as such existed immediately prior to
the Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical (but not group life insurance) and any
other benefits enjoyed, from time to time, by senior officers of the Company,
all upon terms as favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to the contrary, if the
Company adopts any change in the benefits provided for senior officers of the
Company, and such policy is uniformly applied to all officers of the Company
(and any successor or acquiror of the Company, if any), including the chief
executive officer of such entities, then no such change shall be deemed to be
contrary to this paragraph.
6. Termination for Cause. During the Contract Period, the Company
shall have the right to terminate the Executive for Cause, upon written notice
to him of the termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive shall not be
entitled to any further compensation or benefits under this Agreement.
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7. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months, the Company may terminate the employment of the Executive.
In such event, the Executive shall be paid within 10 days of termination a lump
sum equal to one-twelfth of the highest annual salary (including 401(k) plan
deferral) paid to the Executive during any calendar year in each of the three
calendar years immediately prior to the Change in Control, but shall not be
entitled to any further compensation or benefits under this Agreement, except as
provided in the next sentence and in Section 12. If the Company fails to pay the
Executive the lump sum amount due him under this Section 7 or the payments under
Section 12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
8. Death Benefits. During the Contract Period (defined without
regard to his death), upon the Executive's death his estate shall be paid within
20 business days of his death a lump sum equal to one-twelfth of the highest
annual salary (including 401(k) plan deferral) paid to the Executive during any
calendar year in each of the three calendar years immediately prior to the
Change in Control, but shall not be entitled to any further compensation or
benefits under this Agreement, except as provided in the next sentence and in
Section 12. If the Company fails to pay the Executive's estate the lump sum
amount due it under this Section or the payments under Section 12, the
Executive's estate, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all
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of its reasonable legal fees and expenses incurred in connection with its
enforcement against the Company of the terms of this Agreement. The Executive's
estate shall be denied payment of its legal fees and expenses only if a court
finds that the Executive sought payment of such fees without reasonable cause
and not in good faith.
9. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the Contract Period by
written notice to the Executive providing four weeks notice. The Executive may
resign for Good Reason during the Contract Period upon four weeks written notice
to the Company specifying the facts and circumstances claimed to support the
Good Reason. The Executive shall be entitled to give a Notice of Termination
that his or her employment is being terminated for Good Reason at any time
during the Contract Period, not later than twelve months after any occurrence of
an event stated to constitute Good Reason. If during the Contract Period the
Company terminates the Executive's employment without Cause or the Executive
Resigns for Good Reason, then the Executive shall be entitled to the following:
(i) (subject to the possible age related reduction in the next sentence) the
Company shall within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three times the
highest annual compensation, consisting solely of salary (including any 401(k)
plan deferral) and bonus, paid to (or in the case of bonus accrued for) the
Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control; (ii) the Company shall continue to
provide the Executive for a period of three years after termination (but not
beyond the date the Executive reaches age 65) with health, hospitalization and
medical insurance, as well as life and disability insurance, as were provided at
the time of the termination of his employment with the Company, at the Company's
cost (subject to payment by the Executive of the same contribution amount and
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deductibles as Executive previously paid); (iii) the Company shall credit
Executive under the BEP immediately upon termination with additional years of
credited service as if he had continued to work for the Company for three years
after the date of termination (but not beyond the date the Executive reaches age
65), the benefit plans covered thereby had remained the same during such period,
and the BEP was not changed or modified after the Change in Control or otherwise
during such period. After the Executive has reached age 62, the "three" times
referred to in clause (i) of the previous sentence shall be reduced to a number
equal to the quotient (rounded to the nearest thousand) the numerator of which
is the whole number of months left until the Executive reaches age 65 and the
denominator of which is 12.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
to provide him with the health, hospitalization and medical insurance, life
disability or BEP benefits due under this section or the payments under Section
12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
10. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contract
Period without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company, and shall not be entitled to any of the
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other benefits provided hereunder. No such resignation shall be effective unless
in writing with four weeks' notice thereof.
11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things, all
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions. No alleged breach of this Section 11 shall give the
Company the right to withhold or offset against any payments due the Executive
under this Agreement.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments or
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benefits under Section 9 of this Agreement or Sections 7 or 8 or any other
provision of this Agreement, including but not limited to this Section 12 or
under any benefit plan of the Company applicable to Executive individually or
generally to executives or employees of the Company, then, notwithstanding any
other provisions of this Agreement, the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of the Excise Tax imposed on all such payments
and benefits and of the federal, state and local income tax and Excise Tax
imposed upon payments provided for in this Section 12, shall be equal to the
payments and benefits due to the Executive hereunder and the payments and/or
benefits due to the Executive under any benefit plan of the Company. Each
Gross-Up Payment shall be made to Executive or as provided in Section 16 hereof,
upon the later of (i) five (5) days after the date the Executive notifies the
Company of its need to make such Gross-Up Payment, or (ii) the date of any
payment causing the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally recognized
certified public accounting firm designated jointly by the Company and the
Executive. The cost of such services by the accounting firm shall be paid by the
Company. If the Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm used by the Company
immediately prior to the Change in Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to
13
be paid, and attach a copy of the IRS notice. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the date
on which the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however that the Company
shall pay directly all costs and expenses (including legal and accounting
fees, as well as other expenses and any additional interest and penalties)
incurred by the Executive and the Company in connection with an IRS levy,
contest or claim.
c. This Section shall survive the termination of Executive's
employment hereunder and the expiration of the Contract Period.
13. Term and Effect Prior to Change in Control.
a. Term. This Agreement shall commence on the date hereof and
shall remain in effect for a period of 3 years from the date hereof (the
"Initial Term") or until the end of
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the Contract Period, whichever is later. The Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term on any anniversary date is always 3 years) unless the
Board of Directors of Valley, by a majority vote by resolution of a majority of
Directors then in office votes not to extend the Initial Term any further.
Notwithstanding the foregoing, the Initial Term shall not extend beyond the date
when the Executive reaches age 65.
b. No Effect Prior to Change in Control. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement or
contract or plan with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon a Change in Control. If the
employment of the Executive by the Company is ended for any reason prior to a
Change in Control, this Agreement shall thereafter be of no further force and
effect.
14. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that if
the Executive receives the lump severance payment due under paragraph 9 hereof,
the Executive shall not be entitled to the lump sum severance payment due under
paragraph 1 of the Severance Agreement (the "Severance Agreement"), dated August
17, 1994, between the Company and the Executive, or to severance payments under
any other plan or program of the Company providing for severance pay, and shall
not be entitled to health, hospital, medical and other benefits under Paragraph
5 of the Severance Agreement to the extent such post-employment benefits
duplicate the benefits hereunder.
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The compensation and benefits payable under paragraphs 2 (death) and 3
(disability) of the Severance Agreement shall not be effected by this Agreement,
but shall be in addition to the benefits provided hereunder. The provisions of
Paragraph 4 of the Severance Agreement (minimum retirement benefit) shall
continue to apply.
15. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company 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 dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than two
weeks nor more than six weeks after such Notice of Termination is given, except
in the case of termination of employment by the Company of the Executive for
Cause pursuant to Section 6 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
16. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment to be made
by the Company may be made in the form of withholding taxes, but shall be timely
directed to the IRS (or any state division of taxation) on the Executive's
behalf.
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17. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Valley. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of New Jersey. Except as set forth herein, this Agreement supersedes all prior
agreements and understandings with respect to the matters covered hereby,
including expressly any prior agreement with the Company concerning Change in
Control benefits. This Agreement expressly replaces the Change in Control
Agreement, dated January 1, 1995. Except as expressly specified in Section 14
with regard to the Severance Agreement, this Agreement does not effect or reduce
the benefits or obligations of the parties under the Split-Dollar Agreement,
dated as of July 7, 1995 (and any supplement or amendment to, or replacement for
that agreement) between the Company, the Executive and his spouse or the
Severance Agreement (or any supplement or amendment to or replacement for that
agreement). The amendment or termination of this Agreement may be made only in a
writing executed by the Company and the Executive, and no amendment or
termination of this Agreement shall be effective unless and until made in such a
writing. This Agreement shall be binding upon any successor (whether direct or
indirect, by purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal to
the Executive and the Executive may not assign any of his rights or duties
hereunder but this Agreement shall be enforceable by the Executive's legal
representatives, executors or administrators. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
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IN WITNESS WHEREOF, Valley National Bank and Valley National Bancorp
each have caused this Agreement to be signed by their duly authorized
representatives pursuant to the authority of their Boards of Directors, and the
Executive has personally executed this Agreement, all as of the day and year
first written above.
ATTEST: VALLEY NATIONAL BANCORP
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
WITNESS:
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------- -------------------------------------
Xxxxx Xxxxxxxx Xxxxxx X. Xxxxxx, Executive
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AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(XXXXX XXXXXXXX)
THIS AMENDED AND RESTATED CHANGE IN CONTROL EMPLOYMENT AGREEMENT
(the "Agreement"), is made as of this 1st day of January, 1999, among VALLEY
NATIONAL BANK ("Bank"), a national banking association with its principal office
at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx, XXXXXX NATIONAL BANCORP ("Valley"), a
New Jersey Corporation which maintains its principal office at 0000 Xxxxxx Xxxx,
Xxxxx, Xxx Xxxxxx (Valley and the Bank collectively are the "Company") and XXXXX
XXXXXXXX (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by Valley and the Bank for
many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Valley;
WHEREAS, the Board of Directors of the Bank and Valley believe that
the future services of the Executive are of great value to the Bank and Valley
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
19
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined; and
WHEREAS, the Executive and the Company had entered into a Change in
Control Agreement, dated January 1, 1995, and have agreed to amend and restate
that agreement with this Agreement.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of an acquisition
or a bid to take over control of the Company, and to induce the Executive to
remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive, each intending to be legally bound
hereby, agree as follows:
12. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for the
Company under this Agreement after at least one warning in writing from the
Boards of Directors of the Company identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes material
injury to the Company as specified in a written notice to the Executive from the
Boards of Directors of the Company; or (iii) conviction of a crime (other than a
traffic violation), habitual drunkenness, drug abuse, or excessive absenteeism
(other than for illness), after a warning (required with respect to drunkenness
or absenteeism only) in writing from the Boards of Directors of the Company to
refrain from such behavior. No act or failure to act on the part of the
Executive shall be considered willful unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the action or
omission was in the best interests of the Company.
20
b. Change in Control. "Change in Control" means any of the
following events: (i) when Valley or a Subsidiary acquires actual knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than an affiliate of Valley or a Subsidiary or an employee benefit
plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act) directly or indirectly, of securities of Valley
representing more than twenty-five percent (25%) of the combined voting power of
Valley's then outstanding securities (a "Control Person"); (ii) upon the first
purchase of Valley's common stock pursuant to a tender or exchange offer (other
than a tender or exchange offer made by Valley, a Subsidiary or an employee
benefit plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates); (iii) the consummation of (A) a merger or consolidation
of Valley with or into another corporation unless the definitive agreement
provides that at least two-thirds of the directors of the surviving or resulting
corporation immediately after the transaction are directors of Valley before the
transaction commenced (a "Non-Control Transaction"), (B) a sale or disposition
of all or substantially all of Valley's assets or (C) a plan of liquidation or
dissolution of Valley; (iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board (the
"Continuing Directors") cease for any reason to constitute at least two-thirds
thereof or, following a Non-Control Transaction, two-thirds of the board of
directors of the surviving or resulting corporation; provided that any
individual whose election or nomination for election as a member of the Board
(or, following a Non-Control Transaction, the board of directors of the
surviving or resulting corporation) was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be considered a
Continuing Director; or (v) upon a sale of (A) common stock of the Bank if after
such sale any person (as such term is used in Section 13(d) and 14(d)(2) of the
Exchange Act) other than Valley, an employee benefit plan established or
maintained by Valley or a Subsidiary, or an affiliate of Valley or a Subsidiary,
owns a majority of the Bank's common stock or (B) all or substantially all of
the Bank's assets (other than in the ordinary course of business).
21
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) the third anniversary of the Change in Control or (ii) the date
the Executive would attain age 67 or (iii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to have occurred
at the date specified in the definition of Change in Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express prior written
consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or functions associated with,
Executive's position, title, duties, responsibilities and status with the
Company immediately prior to a Change in Control; any removal of Executive from,
or any failure to re-elect Executive to, any position(s) or office(s) Executive
held immediately prior to such Change in Control; or any requirement that the
Executive work more hours or on a different schedule than those he worked
immediately prior to a Change in Control.
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the Change in Control
(except that the Company may institute plans, programs or arrangements providing
the Executive substantially similar benefits) or a failure by the Company to
continue Executive as a participant in such plans on at least the same basis as
Executive participated in such plan prior to the Change in Control; or a failure
to pay the Executive the bonus provided for in Section 4.b hereof at the time
and in the manner therein specified;
22
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his present
office location, except for required occasional travel on the Company's business
to an extent consistent with Executive's business travel obligations immediately
prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's retirement plan, benefit equalization plan, split-dollar life
insurance agreement for the Executive, health and accident plan, disability
plan, deferred compensation plan or long term stock incentive plan) in which
Executive is participating immediately prior to a Change in Control (except that
the Company may institute or continue plans, programs or arrangements providing
Executive with substantially similar benefits); the taking of any action by the
Company which would adversely affect Executive's participation in or materially
reduce Executive's benefits under, any of such plans, programs or arrangements;
the failure to continue, or the taking of any action which would deprive
Executive, of any material fringe benefit enjoyed by Executive immediately prior
to such Change in Control; or the failure by the Company to provide Executive
with the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive prior
to any Change in Control; or
(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which is not effected pursuant
to all of the requirements of this Agreement; and, for purposes of this
Agreement, no such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the
corporations other than the last corporation in the
23
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
13. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.
14. Position. During the Contract Period the Executive shall be
employed as Vice Chairman of Valley and the Bank, or such other corporate or
divisional profit center as shall then be the principal successor to the
business, assets and properties of the Company, with the same title and with the
same duties and responsibilities as before the Change in Control. The Executive
shall devote his time and attention to the business of the Company in the same
manner and to the same extent he did before the Change in Control, and shall not
during the Contract Period be engaged in any other business activity. This
paragraph shall not be construed as requiring the full-time service of Executive
or as preventing the Executive from managing any investments of his which do not
require any service on his part in the operation of such investments or from
continuing to serve on any boards of directors or trustees which he served prior
to the Change in Control or for which consent is provided by the Board after a
Change in Control.
15. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual salary shall be payable
in installments in accordance with the Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three years prior to the
Change in Control. The bonus shall be payable at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.
24
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously reimbursed to him immediately prior to the
Change in Control.
b. Benefit Equalization Plan. During the Contract Period, if
the Executive was entitled to benefits under the Company's Benefit Equalization
Plan ("BEP") prior to the Change in Control, the Executive shall be entitled to
continued benefits under the BEP after the Change in Control and such BEP may
not be modified or terminated to reduce or eliminate such benefits during the
Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, during the Contract Period he shall be entitled to the
same membership and/or use of an automobile at least comparable to the
automobile provided to him prior to the Change in Control.
d. Other Benefits. During the Contract Period, the Executive
also shall be entitled to vacations and sick days, in accordance with the
practices and procedures of the Company, as such existed immediately prior to
the Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical (but not group life insurance) and any
other benefits enjoyed, from time to time, by senior officers of the Company,
all upon terms as favorable as those enjoyed by other senior officers of the
Company. Notwithstanding anything in this paragraph 5(d) to the
25
contrary, if the Company adopts any change in the benefits provided for senior
officers of the Company, and such policy is uniformly applied to all officers of
the Company (and any successor or acquiror of the Company, if any), including
the chief executive officer of such entities, then no such change shall be
deemed to be contrary to this paragraph.
17. Termination for Cause. During the Contract Period, the Company
shall have the right to terminate the Executive for Cause, upon written notice
to him of the termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive shall not be
entitled to any further compensation or benefits under this Agreement.
18. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months, the Company may terminate the employment of the Executive.
In such event, the Executive shall be paid within 10 days of termination a lump
sum equal to one-twelfth of the highest annual salary (including 401(k) plan
deferral) paid to the Executive during any calendar year in each of the three
calendar years immediately prior to the Change in Control, but shall not be
entitled to any further compensation or benefits under this Agreement, except as
provided in the next sentence and in Section 12. If the Company fails to pay the
Executive the lump sum amount due him under this Section 7 or the payments under
Section 12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
19. Death Benefits. During the Contract Period (defined without
regard to his death), upon the Executive's death his estate shall be paid within
20 business days of his death a lump sum equal to one-twelfth of the highest
annual salary (including 401(k) plan deferral) paid to the Executive during any
calendar year in each of the three calendar years immediately prior to the
Change
26
in Control, but shall not be entitled to any further compensation or benefits
under this Agreement, except as provided in the next sentence and in Section 12.
If the Company fails to pay the Executive's estate the lump sum amount due it
under this Section or the payments under Section 12, the Executive's estate,
after giving 10 days' written notice to the Company identifying the Company's
failure, shall be entitled to recover from the Company on a monthly basis as
incurred all of its reasonable legal fees and expenses incurred in connection
with its enforcement against the Company of the terms of this Agreement. The
Executive's estate shall be denied payment of its legal fees and expenses only
if a court finds that the Executive sought payment of such fees without
reasonable cause and not in good faith.
20. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the Contract Period by
written notice to the Executive providing four weeks notice. The Executive may
resign for Good Reason during the Contract Period upon four weeks written notice
to the Company specifying the facts and circumstances claimed to support the
Good Reason. The Executive shall be entitled to give a Notice of Termination
that his or her employment is being terminated for Good Reason at any time
during the Contract Period, not later than twelve months after any occurrence of
an event stated to constitute Good Reason. If during the Contract Period the
Company terminates the Executive's employment without Cause or the Executive
Resigns for Good Reason, then the Executive shall be entitled to the following:
(i) (subject to the possible age related reduction in the next sentence) the
Company shall within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three times the sum
of the highest salary (including any 401(k) plan deferral) and the highest
bonus, paid to (or in the case of bonus accrued for) the Executive during any
calendar year in each of the seven calendar years immediately prior to the
Change in Control; (ii) the Company shall continue to provide the Executive and
his spouse for a period of three years after termination (but not beyond the
date Executive reaches age 67) with health, hospitalization, medical and dental
insurance, as well as life and disability insurance, as were provided at the
time of the termination of his employment with the Company, at the
27
Company's cost (subject to payment by the Executive of the same contribution
amount and deductibles as Executive previously paid); (iii) the Company shall
credit Executive under the BEP immediately upon termination with additional
years of credited service as if he had continued to work for the Company for
three years after the date of termination (but not beyond the date the Executive
reaches age 67), the benefit plans covered thereby had remained the same during
such period, and the BEP was not changed or modified after the Change in Control
or otherwise during such period. After the Executive has reached age 64, the
"three" times referred to in clause (i) of the previous sentence shall be
reduced to a number equal to the quotient (rounded to the nearest thousand) the
numerator of which is the whole number of months left until the Executive
reaches age 67 and the denominator of which is 12.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
to provide him with the health, hospitalization and medical insurance, life
disability or BEP benefits due under this section or the payments under Section
12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
21. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contract
Period without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company, and shall not be entitled to any of the other benefits
provided hereunder. No such resignation shall be effective unless in writing
with four weeks' notice thereof.
28
22. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things, all
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions. No alleged breach of this Section 11 shall give the
Company the right to withhold or offset against any payments due the Executive
under this Agreement.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
13. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments or benefits under Section 9 of
this Agreement or Sections 7 or 8 or any other provision of this Agreement,
including but not limited to this Section 12 or under any benefit plan of the
Company applicable to Executive individually or generally to executives or
employees of the Company, then, notwithstanding any other provisions of this
Agreement, the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of the Excise Tax
29
imposed on all such payments and benefits and of the federal, state and local
income tax and Excise Tax imposed upon payments provided for in this Section 12,
shall be equal to the payments and benefits due to the Executive hereunder and
the payments and/or benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made to Executive or as provided in
Section 16 hereof, upon the later of (i) five (5) days after the date the
Executive notifies the Company of its need to make such Gross-Up Payment, or
(ii) the date of any payment causing the liability for such Excise Tax. The
amount of any Gross-Up Payment under this section shall be computed by a
nationally recognized certified public accounting firm designated jointly by the
Company and the Executive. The cost of such services by the accounting firm
shall be paid by the Company. If the Company and the Executive are unable to
designate jointly the accounting firm, then the firm shall be the accounting
firm used by the Company immediately prior to the Change in Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which the Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
30
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however that the Company
shall pay directly all costs and expenses (including legal and accounting
fees, as well as other expenses and any additional interest and penalties)
incurred by the Executive and the Company in connection with an IRS levy,
contest or claim.
c. This Section shall survive the termination of Executive's
employment hereunder and the expiration of the Contract Period.
18. Term and Effect Prior to Change in Control.
a. Term. This Agreement shall commence on the date hereof and
shall remain in effect for a period of 3 years from the date hereof (the
"Initial Term") or until the end of the Contract Period, whichever is later. The
Term shall be automatically extended for an additional one year period on the
anniversary date hereof (so that the Initial Term on any anniversary date is
always 3 years) unless the Board of Directors of Valley, by a majority vote by
resolution of a majority of Directors then in office votes not to extend the
Initial Term any further. Notwithstanding the foregoing, the Initial Term shall
not extend beyond the date when the Executive reaches age 67.
b. No Effect Prior to Change in Control. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement or
contract or plan with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon a Change in Control. If the
employment of the
31
Executive by the Company is ended for any reason prior to a Change in Control,
this Agreement shall thereafter be of no further force and effect.
19. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that if
the Executive receives the lump severance payment due under paragraph 9 hereof,
the Executive shall not be entitled to the lump sum severance payment due under
paragraph 1 of the Severance Agreement (the "Severance Agreement"), dated August
17, 1994, between the Company and the Executive, or to severance payments under
any other plan or program of the Company providing for severance pay and shall
not be entitled to health, hospital, medical and other benefits under paragraph
2 of the Severance Agreement to the extent such post-employment benefits
duplicate the benefits hereunder..
20. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company 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 dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than two
weeks nor more than six weeks after such Notice of Termination is given, except
in the case of termination of employment by the Company of the Executive for
Cause pursuant to Section 6 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
32
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
21. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment to be made
by the Company may be made in the form of withholding taxes, but shall be timely
directed to the IRS (or any state division of taxation) on the Executive's
behalf.
22. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Valley. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of New Jersey. Except as set forth herein, this Agreement supersedes all prior
agreements and understandings with respect to the matters covered hereby,
including expressly any prior agreement with the Company concerning Change in
Control benefits. This Agreement expressly replaces the Change in Control
Agreement, dated January 1, 1995. Except as expressly specified in Section 14
with regard to the Severance Agreement, this Agreement does not effect or reduce
the benefits or obligations of the parties under the Severance Agreement (or any
supplement or amendment to or replacement for that agreement). The amendment or
termination of this Agreement may be made only in a writing executed by the
Company and the Executive, and no amendment or termination of this Agreement
shall be effective unless and until made in such a writing. This Agreement shall
be binding upon any successor (whether direct or indirect, by purchase, merge,
consolidation, liquidation or otherwise) to all or substantially all of the
assets of the Company. This Agreement is personal to the Executive and the
Executive may not assign any of his rights or duties hereunder but this
Agreement shall be enforceable by the Executive's legal representatives,
executors or administrators. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
33
IN WITNESS WHEREOF, Valley National Bank and Valley National Bancorp
each have caused this Agreement to be signed by their duly authorized
representatives pursuant to the authority of their Boards of Directors, and the
Executive has personally executed this Agreement, all as of the day and year
first written above.
ATTEST: VALLEY NATIONAL BANCORP
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
WITNESS:
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxxxx
------------------------------- -------------------------------------
Xxxxx X. Xxxxxxx Xxxxx Xxxxxxxx, Executive
34
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(XXXXX XXXX XXXXXXXX)
THIS AMENDED AND RESTATED CHANGE IN CONTROL EMPLOYMENT AGREEMENT
(the "Agreement"), is made as of this 1st day of January, 1999, among VALLEY
NATIONAL BANK ("Bank"), a national banking association with its principal office
at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx, XXXXXX NATIONAL BANCORP ("Valley"), a
New Jersey Corporation which maintains its principal office at 0000 Xxxxxx Xxxx,
Xxxxx, Xxx Xxxxxx (Valley and the Bank collectively are the "Company") and XXXXX
XXXX XXXXXXXX (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by Valley and the Bank for
many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Valley;
WHEREAS, the Board of Directors of the Bank and Valley believe that
the future services of the Executive are of great value to the Bank and Valley
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders,
35
without concern that the Executive might be distracted by the personal
uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined; and
WHEREAS, the Executive and the Company had entered into a Change in
Control Agreement, dated as of January 1, 1998, and have agreed to amend and
restate that agreement with this Agreement.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of an acquisition
or a bid to take over control of the Company, and to induce the Executive to
remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive, each intending to be legally bound
hereby, agree as follows:
23. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for the
Company under this Agreement after at least one warning in writing from the
Boards of Directors of the Company identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes material
injury to the Company as specified in a written notice to the Executive from the
Boards of Directors of the Company; or (iii) conviction of a crime (other than a
traffic violation), habitual drunkenness, drug
36
abuse, or excessive absenteeism (other than for illness), after a warning
(required with respect to drunkenness or absenteeism only) in writing from the
Boards of Directors of the Company to refrain from such behavior. No act or
failure to act on the part of the Executive shall be considered willful unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the action or omission was in the best interests of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Valley or a Subsidiary acquires actual knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than an affiliate of Valley or a Subsidiary or an employee benefit
plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act) directly or indirectly, of securities of Valley
representing more than twenty-five percent (25%) of the combined voting power of
Valley's then outstanding securities (a "Control Person"); (ii) upon the first
purchase of Valley's common stock pursuant to a tender or exchange offer (other
than a tender or exchange offer made by Valley, a Subsidiary or an employee
benefit plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates); (iii) the consummation of (A) a merger or consolidation
of Valley with or into another corporation unless the definitive agreement
provides that at least two-thirds of the directors of the surviving or resulting
corporation immediately after the transaction are directors of Valley before the
transaction commenced (a "Non-Control Transaction"), (B) a sale or disposition
of all or substantially all of Valley's assets or (C) a plan of liquidation or
dissolution of Valley; (iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board (the
"Continuing Directors") cease for any reason to constitute at least two-thirds
thereof or, following a Non-Control Transaction, two-thirds of the board of
directors of the surviving or resulting
37
corporation; provided that any individual whose election or nomination for
election as a member of the Board (or, following a Non-Control Transaction, the
board of directors of the surviving or resulting corporation) was approved by a
vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director; or (v) upon a sale of (A) common stock of the
Bank if after such sale any person (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) other than Valley, an employee benefit plan
established or maintained by Valley or a Subsidiary, or an affiliate of Valley
or a Subsidiary, owns a majority of the Bank's common stock or (B) all or
substantially all of the Bank's assets (other than in the ordinary course of
business).
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) the third anniversary of the Change in Control or (ii) the date
the Executive would attain age 65 or (iii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to have occurred
at the date specified in the definition of Change in Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express prior written
consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or functions associated with,
Executive's position, title, duties, responsibilities and status with the
Company immediately prior to a Change in Control; any removal of Executive from,
or any failure to re-elect Executive to, any position(s) or office(s) Executive
held immediately prior to such Change in Control.
38
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the Change in Control
(except that the Company may institute plans, programs or arrangements providing
the Executive substantially similar benefits) or a failure by the Company to
continue Executive as a participant in such plans on at least the same basis as
Executive participated in such plan prior to the Change in Control; or a failure
to pay the Executive the bonus provided for in Section 4.b hereof at the time
and in the manner therein specified;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his present
office location, except for required occasional travel on the Company's business
to an extent consistent with Executive's business travel obligations immediately
prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's retirement plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred compensation plan or long
term stock incentive plan) in which Executive is participating immediately prior
to a Change in Control (except that the Company may institute or continue plans,
programs or arrangements providing Executive with substantially similar
benefits); the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits under,
any of such plans, programs or arrangements; the failure to continue, or the
taking of any action which would deprive Executive, of any material
39
fringe benefit enjoyed by Executive immediately prior to such Change in Control;
or the failure by the Company to provide Executive with the number of paid
vacation days to which Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive prior
to any Change in Control; or
(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which is not effected pursuant
to all of the requirements of this Agreement; and, for purposes of this
Agreement, no such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
24. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.
25. Position. During the Contract Period the Executive shall be
employed as Executive Vice President of Valley and the Bank, or such other
corporate or divisional profit center as shall then be the principal successor
to the business, assets and properties of the Company, with the same title and
with the same duties and responsibilities as before the Change in Control. The
Executive shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any other
business activity. This paragraph shall not be
40
construed as preventing the Executive from managing any investments of his which
do not require any service on his part in the operation of such investments or
from continuing to serve on any boards of directors or trustees which he served
prior to the Change in Control or for which consent is provided by the Board
after a Change in Control.
26. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual salary shall be payable
in installments in accordance with the Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three years prior to the
Change in Control. The bonus shall be payable at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
27. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously reimbursed to him immediately prior to the
Change in Control.
41
b. Benefit Equalization Plan. During the Contract Period, if
the Executive was entitled to benefits under the Company's Benefit Equalization
Plan ("BEP") prior to the Change in Control, the Executive shall be entitled to
continued benefits under the BEP after the Change in Control and such BEP may
not be modified or terminated to reduce or eliminate such benefits during the
Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, during the Contract Period he shall be entitled to the
same membership and/or use of an automobile at least comparable to the
automobile provided to him prior to the Change in Control.
d. Other Benefits. During the Contract Period, the Executive
also shall be entitled to vacations and sick days, in accordance with the
practices and procedures of the Company, as such existed immediately prior to
the Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other benefits
enjoyed, from time to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the Company.
Notwithstanding anything in this paragraph 5(d) to the contrary, if the Company
adopts any change in the benefits provided for senior officers of the Company,
and such policy is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the chief executive
officer of such entities, then no such change shall be deemed to be contrary to
this paragraph.
28. Termination for Cause. During the Contract Period, the Company
shall have the right to terminate the Executive for Cause, upon written notice
to him of the termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive shall not be
entitled to any further compensation or benefits under this Agreement.
42
29. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months, the Company may terminate the employment of the Executive.
In such event, the Executive shall be paid within 10 days of termination a lump
sum equal to the highest annual salary (including 401(k) plan deferral) paid to
the Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control, but shall not be entitled to any
further compensation or benefits under this Agreement, except as provided in the
next sentence and in Section 12. If the Company fails to pay the Executive the
lump sum amount due him under this Section 7 or the payments under Section 12,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company on a
monthly basis as incurred all of his reasonable legal fees and expenses incurred
in connection with his enforcement against the Company of the terms of this
Agreement. The Executive shall be denied payment of his legal fees and expenses
only if a court finds that the Executive sought payment of such fees without
reasonable cause and not in good faith.
30. Death Benefits. During the Contract Period (defined without
regard to his death), upon the Executive's death his estate shall be paid within
20 business days of his death a lump sum equal to the highest annual salary
(including 401(k) plan deferral) paid to the Executive during any calendar year
in each of the three calendar years immediately prior to the Change in Control,
but shall not be entitled to any further compensation or benefits under this
Agreement, except as provided in the next sentence and in Section 12. If the
Company fails to pay the Executive's estate the lump sum amount due him under
this Section or the payments under Section 12, the Executive's estate, after
giving 10 days' written notice to the Company identifying the Company's failure,
shall be entitled to recover from the Company on a monthly basis as incurred all
43
of its reasonable legal fees and expenses incurred in connection with its
enforcement against the Company of the terms of this Agreement. The Executive's
estate shall be denied payment of its legal fees and expenses only if a court
finds that the Executive sought payment of such fees without reasonable cause
and not in good faith.
31. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the Contract Period by
written notice to the Executive providing four weeks notice. The Executive may
resign for Good Reason during the Contract Period upon four weeks written notice
to the Company specifying the facts and circumstances claimed to support the
Good Reason. The Executive shall be entitled to give a Notice of Termination
that his or her employment is being terminated for Good Reason at any time
during the Contract Period, not later than twelve months after any occurrence of
an event stated to constitute Good Reason. If during the Contract Period the
Company terminates the Executive's employment without Cause or the Executive
Resigns for Good Reason, then the Executive shall be entitled to the following:
(i) (subject to the possible age related reduction in the next sentence) the
Company shall within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three times the
highest annual compensation, consisting solely of salary (including any 401(k)
plan deferral) and bonus, paid to (or in the case of bonus accrued for) the
Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control; (ii) the Company shall continue to
provide the Executive for a period of three years after termination (but not
beyond the date the Executive reaches age 65) with health, hospitalization and
medical insurance, as well as life and disability insurance, as were provided at
the time of the termination of his employment with the Company, at the Company's
cost (subject to payment by the Executive of the same contribution amount and
44
deductibles as Executive previously paid); (iii) the Company shall credit
Executive under the BEP immediately upon termination with additional years of
credited service as if he had continued to work for the Company for three years
after the date of termination (but not beyond the date the Executive reaches age
65), the benefit plans covered thereby had remained the same during such period,
and the BEP was not changed or modified after the Change in Control or otherwise
during such period. After the Executive has reached age 62, the "three" times
referred to in clause (i) of the previous sentence shall be reduced to a number
equal to the quotient (rounded to the nearest thousand) the numerator of which
is the whole number of months left until the Executive reaches age 65 and the
denominator of which is 12.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
to provide him with the health, hospitalization and medical insurance, life
disability or BEP benefits due under this section or the payments under Section
12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
32. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contract
Period without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company, and shall not be entitled to any of the
45
other benefits provided hereunder. No such resignation shall be effective unless
in writing with four weeks' notice thereof.
33. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things, all
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions. No alleged breach of this Section 11 shall give the
Company the right to withhold or offset against any payments due the Executive
under this Agreement.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
14. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments or
46
benefits under Section 9 of this Agreement or Sections 7 or 8 or any other
provision of this Agreement, including but not limited to this Section 12 or
under any benefit plan of the Company applicable to Executive individually or
generally to executives or employees of the Company, then, notwithstanding any
other provisions of this Agreement, the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of the Excise Tax imposed on all such payments
and benefits and of the federal, state and local income tax and Excise Tax
imposed upon payments provided for in this Section 12, shall be equal to the
payments and benefits due to the Executive hereunder and the payments and/or
benefits due to the Executive under any benefit plan of the Company. Each
Gross-Up Payment shall be made to Executive or as provided in Section 16 hereof,
upon the later of (i) five (5) days after the date the Executive notifies the
Company of its need to make such Gross-Up Payment, or (ii) the date of any
payment causing the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally recognized
certified public accounting firm designated jointly by the Company and the
Executive. The cost of such services by the accounting firm shall be paid by the
Company. If the Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm used by the Company
immediately prior to the Change in Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to
47
be paid, and attach a copy of the IRS notice. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the date
on which the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however that the Company
shall pay directly all costs and expenses (including legal and accounting
fees, as well as other expenses and any additional interest and penalties)
incurred by the Executive and the Company in connection with an IRS levy,
contest or claim.
c. This Section shall survive the termination of Executive's
employment hereunder and the expiration of the Contract Period.
23. Term and Effect Prior to Change in Control.
a. Term. This Agreement shall commence on the date hereof and
shall remain in effect for a period of 3 years from the date hereof (the
"Initial Term") or until the end of
48
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term on any anniversary date is always 3 years) unless prior to
a Change in Control the Chief Executive Officer of the Bank notifies the
Executive in writing at any time that the Contract is not so extended, in which
case the Initial Term shall end upon the later of (i) 3 years after the date
hereof, or (ii) 2 years after the date of such written notice. Notwithstanding
anything to the contrary contained herein, the Initial Term shall cease when the
Executive attains age 65.
b. No Effect Prior to Change in Control. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement or
contract or plan with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon a Change in Control. If the full-time
employment of the Executive by the Company is ended for any reason prior to a
Change in Control, this Agreement shall thereafter be of no further force and
effect.
24. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that if
the Executive receives the lump sum severance payment due under paragraph 9
hereof, the Executive shall not be entitled to the lump sum severance payment
due under paragraph 1 of the Severance Agreement (the "Severance Agreement"),
dated January 1, 1998, between the Company and the Executive, or to severance
payments under any other plan or program of the Company providing for severance
pay, and shall not be entitled to health, hospital and other benefits under
paragraph 2 of the
49
Severance Agreement to the extent such post-employment benefits duplicate
benefits provided hereunder.
25. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company 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 dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than two
weeks nor more than six weeks after such Notice of Termination is given, except
in the case of termination of employment by the Company of the Executive for
Cause pursuant to Section 6 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
26. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment to be made
by the Company may be made in the form of withholding taxes, but shall be timely
directed to the IRS (or any state division of taxation) on the Executive's
behalf.
27. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Valley. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of New Jersey. Except as set forth herein, this
50
Agreement supersedes all prior agreements and understandings with respect to the
matters covered hereby, including expressly any prior agreement with the Company
concerning Change in Control benefits. The parties hereto expressly agree that
the Change in Control Agreement among the Executive, the Bank and Valley, dated
as of January 1, 1998, is hereby terminated, effective the date hereof. Except
as expressly specified in Section 14 with regard to the Severance Agreement,
this Agreement does not effect or reduce the benefits or obligations of the
parties under the Severance Agreement (or any supplement or amendment to or
replacement for that Agreement). The amendment or termination of this Agreement
may be made only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any successor
(whether direct or indirect, by purchase, merge, consolidation, liquidation or
otherwise) to all or substantially all of the assets of the Company. This
Agreement is personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
51
IN WITNESS WHEREOF, Valley National Bank and Valley National Bancorp
each have caused this Agreement to be signed by their duly authorized
representatives pursuant to the authority of their Boards of Directors, and the
Executive has personally executed this Agreement, all as of the day and year
first written above.
ATTEST: VALLEY NATIONAL BANCORP
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
WITNESS:
/s/ Xxxxxx Quick /s/ Xxxxx Xxxx Xxxxxxxx
------------------------------- -------------------------------------
Xxxxxx Quick Xxxxx Xxxx Xxxxxxxx, Executive
52
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(XXXXXX X. XXXXX)
THIS AMENDED AND RESTATED CHANGE IN CONTROL EMPLOYMENT AGREEMENT
(the "Agreement"), is made as of this 1st day of January, 1999, among VALLEY
NATIONAL BANK ("Bank"), a national banking association with its principal office
at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx, XXXXXX NATIONAL BANCORP ("Valley"), a
New Jersey Corporation which maintains its principal office at 0000 Xxxxxx Xxxx,
Xxxxx, Xxx Xxxxxx (Valley and the Bank collectively are the "Company") and
XXXXXX X. XXXXX (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by Valley and the Bank for
many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Valley;
WHEREAS, the Board of Directors of the Bank and Valley believe that
the future services of the Executive are of great value to the Bank and Valley
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders,
53
without concern that the Executive might be distracted by the personal
uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined; and
WHEREAS, the Executive and the Company had entered into a Change in
Control Agreement, dated as of January 1, 1998, and have agreed to amend and
restate that agreement with this Agreement.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of an acquisition
or a bid to take over control of the Company, and to induce the Executive to
remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive, each intending to be legally bound
hereby, agree as follows:
34. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for the
Company under this Agreement after at least one warning in writing from the
Boards of Directors of the Company identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes material
injury to the Company as specified in a written notice to the Executive from the
Boards of Directors of the Company; or (iii) conviction of a crime (other than a
traffic violation), habitual drunkenness, drug
54
abuse, or excessive absenteeism (other than for illness), after a warning
(required with respect to drunkenness or absenteeism only) in writing from the
Boards of Directors of the Company to refrain from such behavior. No act or
failure to act on the part of the Executive shall be considered willful unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the action or omission was in the best interests of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Valley or a Subsidiary acquires actual knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than an affiliate of Valley or a Subsidiary or an employee benefit
plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act) directly or indirectly, of securities of Valley
representing more than twenty-five percent (25%) of the combined voting power of
Valley's then outstanding securities (a "Control Person"); (ii) upon the first
purchase of Valley's common stock pursuant to a tender or exchange offer (other
than a tender or exchange offer made by Valley, a Subsidiary or an employee
benefit plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates); (iii) the consummation of (A) a merger or consolidation
of Valley with or into another corporation unless the definitive agreement
provides that at least two-thirds of the directors of the surviving or resulting
corporation immediately after the transaction are directors of Valley before the
transaction commenced (a "Non-Control Transaction"), (B) a sale or disposition
of all or substantially all of Valley's assets or (C) a plan of liquidation or
dissolution of Valley; (iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board (the
"Continuing Directors") cease for any reason to constitute at least two-thirds
thereof or, following a Non-Control Transaction, two-thirds of the board of
directors of the surviving or resulting
55
corporation; provided that any individual whose election or nomination for
election as a member of the Board (or, following a Non-Control Transaction, the
board of directors of the surviving or resulting corporation) was approved by a
vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director; or (v) upon a sale of (A) common stock of the
Bank if after such sale any person (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) other than Valley, an employee benefit plan
established or maintained by Valley or a Subsidiary, or an affiliate of Valley
or a Subsidiary, owns a majority of the Bank's common stock or (B) all or
substantially all of the Bank's assets (other than in the ordinary course of
business).
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) the third anniversary of the Change in Control or (ii) the date
the Executive would attain age 65 or (iii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to have occurred
at the date specified in the definition of Change in Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express prior written
consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or functions associated with,
Executive's position, title, duties, responsibilities and status with the
Company immediately prior to a Change in Control; any removal of Executive from,
or any failure to re-elect Executive to, any position(s) or office(s) Executive
held immediately prior to such Change in Control.
56
(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the Change in Control
(except that the Company may institute plans, programs or arrangements providing
the Executive substantially similar benefits) or a failure by the Company to
continue Executive as a participant in such plans on at least the same basis as
Executive participated in such plan prior to the Change in Control; or a failure
to pay the Executive the bonus provided for in Section 4.b hereof at the time
and in the manner therein specified;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his present
office location, except for required occasional travel on the Company's business
to an extent consistent with Executive's business travel obligations immediately
prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's retirement plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred compensation plan or long
term stock incentive plan) in which Executive is participating immediately prior
to a Change in Control (except that the Company may institute or continue plans,
programs or arrangements providing Executive with substantially similar
benefits); the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits under,
any of such plans, programs or arrangements; the failure to continue, or the
taking of any action which would deprive Executive, of any material
57
fringe benefit enjoyed by Executive immediately prior to such Change in Control;
or the failure by the Company to provide Executive with the number of paid
vacation days to which Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive prior
to any Change in Control; or
(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which is not effected pursuant
to all of the requirements of this Agreement; and, for purposes of this
Agreement, no such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
35. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.
36. Position. During the Contract Period the Executive shall be
employed as Executive Vice President of Valley and the Bank, or such other
corporate or divisional profit center as shall then be the principal successor
to the business, assets and properties of the Company, with the same title and
with the same duties and responsibilities as before the Change in Control. The
Executive shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any other
business activity. This paragraph shall not be
58
construed as preventing the Executive from managing any investments of his which
do not require any service on his part in the operation of such investments or
from continuing to serve on any boards of directors or trustees which he served
prior to the Change in Control or for which consent is provided by the Board
after a Change in Control.
37. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual salary shall be payable
in installments in accordance with the Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three years prior to the
Change in Control. The bonus shall be payable at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
38. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously reimbursed to him immediately prior to the
Change in Control.
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b. Benefit Equalization Plan. During the Contract Period, if
the Executive was entitled to benefits under the Company's Benefit Equalization
Plan ("BEP") prior to the Change in Control, the Executive shall be entitled to
continued benefits under the BEP after the Change in Control and such BEP may
not be modified or terminated to reduce or eliminate such benefits during the
Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, during the Contract Period he shall be entitled to the
same membership and/or use of an automobile at least comparable to the
automobile provided to him prior to the Change in Control.
d. Other Benefits. During the Contract Period, the Executive
also shall be entitled to vacations and sick days, in accordance with the
practices and procedures of the Company, as such existed immediately prior to
the Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other benefits
enjoyed, from time to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the Company.
Notwithstanding anything in this paragraph 5(d) to the contrary, if the Company
adopts any change in the benefits provided for senior officers of the Company,
and such policy is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the chief executive
officer of such entities, then no such change shall be deemed to be contrary to
this paragraph.
39. Termination for Cause. During the Contract Period, the Company
shall have the right to terminate the Executive for Cause, upon written notice
to him of the termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive shall not be
entitled to any further compensation or benefits under this Agreement.
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40. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months, the Company may terminate the employment of the Executive.
In such event, the Executive shall be paid within 10 days of termination a lump
sum equal to the highest annual salary (including 401(k) plan deferral) paid to
the Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control, but shall not be entitled to any
further compensation or benefits under this Agreement, except as provided in the
next sentence and in Section 12. If the Company fails to pay the Executive the
lump sum amount due him under this Section 7 or the payments under Section 12,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company on a
monthly basis as incurred all of his reasonable legal fees and expenses incurred
in connection with his enforcement against the Company of the terms of this
Agreement. The Executive shall be denied payment of his legal fees and expenses
only if a court finds that the Executive sought payment of such fees without
reasonable cause and not in good faith.
41. Death Benefits. During the Contract Period (defined without
regard to his death), upon the Executive's death his estate shall be paid within
20 business days of his death a lump sum equal to the highest annual salary
(including 401(k) plan deferral) paid to the Executive during any calendar year
in each of the three calendar years immediately prior to the Change in Control,
but shall not be entitled to any further compensation or benefits under this
Agreement, except as provided in the next sentence and in Section 12. If the
Company fails to pay the Executive's estate the lump sum amount due him under
this Section or the payments under Section 12, the Executive's estate, after
giving 10 days' written notice to the Company identifying the Company's failure,
shall be entitled to recover from the Company on a monthly basis as incurred all
61
of its reasonable legal fees and expenses incurred in connection with its
enforcement against the Company of the terms of this Agreement. The Executive's
estate shall be denied payment of its legal fees and expenses only if a court
finds that the Executive sought payment of such fees without reasonable cause
and not in good faith.
42. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the Contract Period by
written notice to the Executive providing four weeks notice. The Executive may
resign for Good Reason during the Contract Period upon four weeks written notice
to the Company specifying the facts and circumstances claimed to support the
Good Reason. The Executive shall be entitled to give a Notice of Termination
that his or her employment is being terminated for Good Reason at any time
during the Contract Period, not later than twelve months after any occurrence of
an event stated to constitute Good Reason. If during the Contract Period the
Company terminates the Executive's employment without Cause or the Executive
Resigns for Good Reason, then the Executive shall be entitled to the following:
(i) (subject to the possible age related reduction in the next sentence) the
Company shall within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three times the
highest annual compensation, consisting solely of salary (including any 401(k)
plan deferral) and bonus, paid to (or in the case of bonus accrued for) the
Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control; (ii) the Company shall continue to
provide the Executive for a period of three years after termination (but not
beyond the date the Executive reaches age 65) with health, hospitalization and
medical insurance, as well as life and disability insurance, as were provided at
the time of the termination of his employment with the Company, at the Company's
cost (subject to payment by the Executive of the same contribution amount and
62
deductibles as Executive previously paid); (iii) the Company shall credit
Executive under the BEP immediately upon termination with additional years of
credited service as if he had continued to work for the Company for three years
after the date of termination (but not beyond the date the Executive reaches age
65), the benefit plans covered thereby had remained the same during such period,
and the BEP was not changed or modified after the Change in Control or otherwise
during such period. After the Executive has reached age 62, the "three" times
referred to in clause (i) of the previous sentence shall be reduced to a number
equal to the quotient (rounded to the nearest thousand) the numerator of which
is the whole number of months left until the Executive reaches age 65 and the
denominator of which is 12.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
to provide him with the health, hospitalization and medical insurance, life
disability or BEP benefits due under this section or the payments under Section
12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
43. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contract
Period without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company, and shall not be entitled to any of the
63
other benefits provided hereunder. No such resignation shall be effective unless
in writing with four weeks' notice thereof.
44. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things, all
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions. No alleged breach of this Section 11 shall give the
Company the right to withhold or offset against any payments due the Executive
under this Agreement.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
15. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments or
64
benefits under Section 9 of this Agreement or Sections 7 or 8 or any other
provision of this Agreement, including but not limited to this Section 12 or
under any benefit plan of the Company applicable to Executive individually or
generally to executives or employees of the Company, then, notwithstanding any
other provisions of this Agreement, the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of the Excise Tax imposed on all such payments
and benefits and of the federal, state and local income tax and Excise Tax
imposed upon payments provided for in this Section 12, shall be equal to the
payments and benefits due to the Executive hereunder and the payments and/or
benefits due to the Executive under any benefit plan of the Company. Each
Gross-Up Payment shall be made to Executive or as provided in Section 16 hereof,
upon the later of (i) five (5) days after the date the Executive notifies the
Company of its need to make such Gross-Up Payment, or (ii) the date of any
payment causing the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally recognized
certified public accounting firm designated jointly by the Company and the
Executive. The cost of such services by the accounting firm shall be paid by the
Company. If the Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm used by the Company
immediately prior to the Change in Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to
65
be paid, and attach a copy of the IRS notice. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the date
on which the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however that the Company
shall pay directly all costs and expenses (including legal and accounting
fees, as well as other expenses and any additional interest and penalties)
incurred by the Executive and the Company in connection with an IRS levy,
contest or claim.
c. This Section shall survive the termination of Executive's
employment hereunder and the expiration of the Contract Period.
28. Term and Effect Prior to Change in Control.
a. Term. This Agreement shall commence on the date hereof and
shall remain in effect for a period of 3 years from the date hereof (the
"Initial Term") or until the end of
66
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term on any anniversary date is always 3 years) unless prior to
a Change in Control the Chief Executive Officer of the Bank notifies the
Executive in writing at any time that the Contract is not so extended, in which
case the Initial Term shall end upon the later of (i) 3 years after the date
hereof, or (ii) 2 years after the date of such written notice. Notwithstanding
anything to the contrary contained herein, the Initial Term shall cease when the
Executive attains age 65.
b. No Effect Prior to Change in Control. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement or
contract or plan with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon a Change in Control. If the full-time
employment of the Executive by the Company is ended for any reason prior to a
Change in Control, this Agreement shall thereafter be of no further force and
effect.
29. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that if
the Executive receives the lump sum severance payment due under paragraph 9
hereof, the Executive shall not be entitled to the lump sum severance payment
due under paragraph 1 of the Severance Agreement (the "Severance Agreement"),
dated January 1, 1998, between the Company and the Executive, or to severance
payments under any other plan or program of the Company providing for severance
pay, and shall not be entitled to health, hospital and other benefits under
paragraph 2 of the
67
Severance Agreement to the extent such post-employment benefits duplicate
benefits provided hereunder.
30. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company 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 dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than two
weeks nor more than six weeks after such Notice of Termination is given, except
in the case of termination of employment by the Company of the Executive for
Cause pursuant to Section 6 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
31. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment to be made
by the Company may be made in the form of withholding taxes, but shall be timely
directed to the IRS (or any state division of taxation) on the Executive's
behalf.
32. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Valley. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of New Jersey. Except as set forth herein, this
68
Agreement supersedes all prior agreements and understandings with respect to the
matters covered hereby, including expressly any prior agreement with the Company
concerning Change in Control benefits. The parties hereto expressly agree that
the Change in Control Agreement among the Executive, the Bank and Valley, dated
as of January 1, 1998, is hereby terminated, effective the date hereof. Except
as expressly specified in Section 14 with regard to the Severance Agreement,
this Agreement does not effect or reduce the benefits or obligations of the
parties under the Severance Agreement (or any supplement or amendment to or
replacement for that Agreement). The amendment or termination of this Agreement
may be made only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any successor
(whether direct or indirect, by purchase, merge, consolidation, liquidation or
otherwise) to all or substantially all of the assets of the Company. This
Agreement is personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
69
IN WITNESS WHEREOF, Valley National Bank and Valley National Bancorp
each have caused this Agreement to be signed by their duly authorized
representatives pursuant to the authority of their Boards of Directors, and the
Executive has personally executed this Agreement, all as of the day and year
first written above.
ATTEST: VALLEY NATIONAL BANCORP
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
WITNESS:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
------------------------------- -------------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxx, Executive
70
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(XXXXX XXXXXXXX)
THIS AMENDED AND RESTATED CHANGE IN CONTROL EMPLOYMENT AGREEMENT
(the "Agreement"), is made as of this 1st day of January, 1999, among VALLEY
NATIONAL BANK ("Bank"), a national banking association with its principal office
at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx, XXXXXX NATIONAL BANCORP ("Valley"), a
New Jersey Corporation which maintains its principal office at 0000 Xxxxxx Xxxx,
Xxxxx, Xxx Xxxxxx (Valley and the Bank collectively are the "Company") and XXXXX
XXXXXXXX (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by Valley and the Bank for
many years;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of the Bank and Valley;
WHEREAS, the Board of Directors of the Bank and Valley believe that
the future services of the Executive are of great value to the Bank and Valley
and that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the "Board")
believes it is imperative that the Company and the Board be able to rely upon
the Executive to continue in his position, and that they be able to receive and
rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders,
71
without concern that the Executive might be distracted by the personal
uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined; and
WHEREAS, the Executive and the Company had entered into a Change in
Control Agreement, dated as of January 1, 1998, and have agreed to amend and
restate that agreement with this Agreement.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of an acquisition
or a bid to take over control of the Company, and to induce the Executive to
remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive, each intending to be legally bound
hereby, agree as follows:
45. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for the
Company under this Agreement after at least one warning in writing from the
Boards of Directors of the Company identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes material
injury to the Company as specified in a written notice to the Executive from the
Boards of Directors of the Company; or (iii) conviction of a crime (other than a
traffic violation), habitual drunkenness, drug
72
abuse, or excessive absenteeism (other than for illness), after a warning
(required with respect to drunkenness or absenteeism only) in writing from the
Boards of Directors of the Company to refrain from such behavior. No act or
failure to act on the part of the Executive shall be considered willful unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the action or omission was in the best interests of the
Company.
b. Change in Control. "Change in Control" means any of the
following events: (i) when Valley or a Subsidiary acquires actual knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than an affiliate of Valley or a Subsidiary or an employee benefit
plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act) directly or indirectly, of securities of Valley
representing more than twenty-five percent (25%) of the combined voting power of
Valley's then outstanding securities (a "Control Person"); (ii) upon the first
purchase of Valley's common stock pursuant to a tender or exchange offer (other
than a tender or exchange offer made by Valley, a Subsidiary or an employee
benefit plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates); (iii) the consummation of (A) a merger or consolidation
of Valley with or into another corporation unless the definitive agreement
provides that at least two-thirds of the directors of the surviving or resulting
corporation immediately after the transaction are directors of Valley before the
transaction commenced (a "Non-Control Transaction"), (B) a sale or disposition
of all or substantially all of Valley's assets or (C) a plan of liquidation or
dissolution of Valley; (iv) if during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board (the
"Continuing Directors") cease for any reason to constitute at least two-thirds
thereof or, following a Non-Control Transaction, two-thirds of the board of
directors of the surviving or resulting
73
corporation; provided that any individual whose election or nomination for
election as a member of the Board (or, following a Non-Control Transaction, the
board of directors of the surviving or resulting corporation) was approved by a
vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director; or (v) upon a sale of (A) common stock of the
Bank if after such sale any person (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) other than Valley, an employee benefit plan
established or maintained by Valley or a Subsidiary, or an affiliate of Valley
or a Subsidiary, owns a majority of the Bank's common stock or (B) all or
substantially all of the Bank's assets (other than in the ordinary course of
business).
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) the third anniversary of the Change in Control or (ii) the date
the Executive would attain age 65 or (iii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to have occurred
at the date specified in the definition of Change in Control.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express prior written
consent:
(1) The assignment to Executive of any duties
inconsistent with, or the reduction of powers or functions associated with,
Executive's position, title, duties, responsibilities and status with the
Company immediately prior to a Change in Control; any removal of Executive from,
or any failure to re-elect Executive to, any position(s) or office(s) Executive
held immediately prior to such Change in Control.
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(2) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan
in which Executive participated immediately prior to the Change in Control
(except that the Company may institute plans, programs or arrangements providing
the Executive substantially similar benefits) or a failure by the Company to
continue Executive as a participant in such plans on at least the same basis as
Executive participated in such plan prior to the Change in Control; or a failure
to pay the Executive the bonus provided for in Section 4.b hereof at the time
and in the manner therein specified;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his present
office location, except for required occasional travel on the Company's business
to an extent consistent with Executive's business travel obligations immediately
prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's retirement plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred compensation plan or long
term stock incentive plan) in which Executive is participating immediately prior
to a Change in Control (except that the Company may institute or continue plans,
programs or arrangements providing Executive with substantially similar
benefits); the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits under,
any of such plans, programs or arrangements; the failure to continue, or the
taking of any action which would deprive Executive, of any material
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fringe benefit enjoyed by Executive immediately prior to such Change in Control;
or the failure by the Company to provide Executive with the number of paid
vacation days to which Executive was entitled immediately prior to such Change
in Control;
(6) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive prior
to any Change in Control; or
(7) Any purported termination of Executive's employment
by the Company during the term of this Agreement which is not effected pursuant
to all of the requirements of this Agreement; and, for purposes of this
Agreement, no such purported termination shall be effective.
f. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
46. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.
47. Position. During the Contract Period the Executive shall be
employed as Executive Vice President of Valley and the Bank, or such other
corporate or divisional profit center as shall then be the principal successor
to the business, assets and properties of the Company, with the same title and
with the same duties and responsibilities as before the Change in Control. The
Executive shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any other
business activity. This paragraph shall not be
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construed as preventing the Executive from managing any investments of his which
do not require any service on his part in the operation of such investments or
from continuing to serve on any boards of directors or trustees which he served
prior to the Change in Control or for which consent is provided by the Board
after a Change in Control.
48. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual salary shall be payable
in installments in accordance with the Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three years prior to the
Change in Control. The bonus shall be payable at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
49. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously reimbursed to him immediately prior to the
Change in Control.
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b. Benefit Equalization Plan. During the Contract Period, if
the Executive was entitled to benefits under the Company's Benefit Equalization
Plan ("BEP") prior to the Change in Control, the Executive shall be entitled to
continued benefits under the BEP after the Change in Control and such BEP may
not be modified or terminated to reduce or eliminate such benefits during the
Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, during the Contract Period he shall be entitled to the
same membership and/or use of an automobile at least comparable to the
automobile provided to him prior to the Change in Control.
d. Other Benefits. During the Contract Period, the Executive
also shall be entitled to vacations and sick days, in accordance with the
practices and procedures of the Company, as such existed immediately prior to
the Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other benefits
enjoyed, from time to time, by senior officers of the Company, all upon terms as
favorable as those enjoyed by other senior officers of the Company.
Notwithstanding anything in this paragraph 5(d) to the contrary, if the Company
adopts any change in the benefits provided for senior officers of the Company,
and such policy is uniformly applied to all officers of the Company (and any
successor or acquiror of the Company, if any), including the chief executive
officer of such entities, then no such change shall be deemed to be contrary to
this paragraph.
50. Termination for Cause. During the Contract Period, the Company
shall have the right to terminate the Executive for Cause, upon written notice
to him of the termination which notice shall specify the reasons for the
termination. In the event of termination for Cause the Executive shall not be
entitled to any further compensation or benefits under this Agreement.
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51. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months, the Company may terminate the employment of the Executive.
In such event, the Executive shall be paid within 10 days of termination a lump
sum equal to the highest annual salary (including 401(k) plan deferral) paid to
the Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control, but shall not be entitled to any
further compensation or benefits under this Agreement, except as provided in the
next sentence and in Section 12. If the Company fails to pay the Executive the
lump sum amount due him under this Section 7 or the payments under Section 12,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company on a
monthly basis as incurred all of his reasonable legal fees and expenses incurred
in connection with his enforcement against the Company of the terms of this
Agreement. The Executive shall be denied payment of his legal fees and expenses
only if a court finds that the Executive sought payment of such fees without
reasonable cause and not in good faith.
52. Death Benefits. During the Contract Period (defined without
regard to his death), upon the Executive's death his estate shall be paid within
20 business days of his death a lump sum equal to the highest annual salary
(including 401(k) plan deferral) paid to the Executive during any calendar year
in each of the three calendar years immediately prior to the Change in Control,
but shall not be entitled to any further compensation or benefits under this
Agreement, except as provided in the next sentence and in Section 12. If the
Company fails to pay the Executive's estate the lump sum amount due it under
this Section or the payments under Section 12, the Executive's estate, after
giving 10 days' written notice to the Company identifying the Company's failure,
shall be entitled to recover from the Company on a monthly basis as incurred all
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of its reasonable legal fees and expenses incurred in connection with its
enforcement against the Company of the terms of this Agreement. The Executive's
estate shall be denied payment of its legal fees and expenses only if a court
finds that the Executive sought payment of such fees without reasonable cause
and not in good faith.
53. Termination Without Cause or Resignation for Good Reason. The
Company may terminate the Executive without Cause during the Contract Period by
written notice to the Executive providing four weeks notice. The Executive may
resign for Good Reason during the Contract Period upon four weeks written notice
to the Company specifying the facts and circumstances claimed to support the
Good Reason. The Executive shall be entitled to give a Notice of Termination
that his or her employment is being terminated for Good Reason at any time
during the Contract Period, not later than twelve months after any occurrence of
an event stated to constitute Good Reason. If during the Contract Period the
Company terminates the Executive's employment without Cause or the Executive
Resigns for Good Reason, then the Executive shall be entitled to the following:
(i) (subject to the possible age related reduction in the next sentence) the
Company shall within 20 business days of the termination of employment pay the
Executive a lump sum severance payment in an amount equal to three times the
highest annual compensation, consisting solely of salary (including any 401(k)
plan deferral) and bonus, paid to (or in the case of bonus accrued for) the
Executive during any calendar year in each of the three calendar years
immediately prior to the Change in Control; (ii) the Company shall continue to
provide the Executive for a period of three years after termination (but not
beyond the date the Executive reaches age 65) with health, hospitalization and
medical insurance, as well as life and disability insurance, as were provided at
the time of the termination of his employment with the Company, at the Company's
cost (subject to payment by the Executive of the same contribution amount and
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deductibles as Executive previously paid); (iii) the Company shall credit
Executive under the BEP immediately upon termination with additional years of
credited service as if he had continued to work for the Company for three years
after the date of termination (but not beyond the date the Executive reaches age
65), the benefit plans covered thereby had remained the same during such period,
and the BEP was not changed or modified after the Change in Control or otherwise
during such period. After the Executive has reached age 62, the "three" times
referred to in clause (i) of the previous sentence shall be reduced to a number
equal to the quotient (rounded to the nearest thousand) the numerator of which
is the whole number of months left until the Executive reaches age 65 and the
denominator of which is 12.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period. If
the Company fails to pay the Executive the lump sum amount due him hereunder or
to provide him with the health, hospitalization and medical insurance, life
disability or BEP benefits due under this section or the payments under Section
12, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
on a monthly basis as incurred all of his reasonable legal fees and expenses
incurred in connection with his enforcement against the Company of the terms of
this Agreement. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such fees
without reasonable cause and not in good faith.
54. Resignation Without Good Reason. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contract
Period without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company, and shall not be entitled to any of the
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other benefits provided hereunder. No such resignation shall be effective unless
in writing with four weeks' notice thereof.
55. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things, all
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions. No alleged breach of this Section 11 shall give the
Company the right to withhold or offset against any payments due the Executive
under this Agreement.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
16. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments or
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benefits under Section 9 of this Agreement or Sections 7 or 8 or any other
provision of this Agreement, including but not limited to this Section 12 or
under any benefit plan of the Company applicable to Executive individually or
generally to executives or employees of the Company, then, notwithstanding any
other provisions of this Agreement, the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of the Excise Tax imposed on all such payments
and benefits and of the federal, state and local income tax and Excise Tax
imposed upon payments provided for in this Section 12, shall be equal to the
payments and benefits due to the Executive hereunder and the payments and/or
benefits due to the Executive under any benefit plan of the Company. Each
Gross-Up Payment shall be made to Executive or as provided in Section 16 hereof,
upon the later of (i) five (5) days after the date the Executive notifies the
Company of its need to make such Gross-Up Payment, or (ii) the date of any
payment causing the liability for such Excise Tax. The amount of any Gross-Up
Payment under this section shall be computed by a nationally recognized
certified public accounting firm designated jointly by the Company and the
Executive. The cost of such services by the accounting firm shall be paid by the
Company. If the Company and the Executive are unable to designate jointly the
accounting firm, then the firm shall be the accounting firm used by the Company
immediately prior to the Change in Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to
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be paid, and attach a copy of the IRS notice. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the date
on which the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however that the Company
shall pay directly all costs and expenses (including legal and accounting
fees, as well as other expenses and any additional interest and penalties)
incurred by the Executive and the Company in connection with an IRS levy,
contest or claim.
c. This Section shall survive the termination of Executive's
employment hereunder and the expiration of the Contract Period.
33. Term and Effect Prior to Change in Control.
a. Term. This Agreement shall commence on the date hereof and
shall remain in effect for a period of 3 years from the date hereof (the
"Initial Term") or until the end of
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the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term on any anniversary date is always 3 years) unless prior to
a Change in Control the Chief Executive Officer of the Bank notifies the
Executive in writing at any time that the Contract is not so extended, in which
case the Initial Term shall end upon the later of (i) 3 years after the date
hereof, or (ii) 2 years after the date of such written notice. Notwithstanding
anything to the contrary contained herein, the Initial Term shall cease when the
Executive attains age 65.
b. No Effect Prior to Change in Control. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement or
contract or plan with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon a Change in Control. If the full-time
employment of the Executive by the Company is ended for any reason prior to a
Change in Control, this Agreement shall thereafter be of no further force and
effect.
34. Severance Compensation and Benefits Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that if
the Executive receives the lump sum severance payment due under paragraph 9
hereof, the Executive shall not be entitled to the lump sum severance payment
due under paragraph 1 of the Severance Agreement (the "Severance Agreement"),
dated January 1, 1998, between the Company and the Executive, or to severance
payments under any other plan or program of the Company providing for severance
pay, and shall not be entitled to health, hospital and other benefits under
paragraph 2 of the
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Severance Agreement to the extent such post-employment benefits duplicate
benefits provided hereunder.
35. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company 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 dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than two
weeks nor more than six weeks after such Notice of Termination is given, except
in the case of termination of employment by the Company of the Executive for
Cause pursuant to Section 6 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
36. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment to be made
by the Company may be made in the form of withholding taxes, but shall be timely
directed to the IRS (or any state division of taxation) on the Executive's
behalf.
37. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Valley. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of New Jersey. Except as set forth herein, this
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Agreement supersedes all prior agreements and understandings with respect to the
matters covered hereby, including expressly any prior agreement with the Company
concerning Change in Control benefits. The parties hereto expressly agree that
the Change in Control Agreement among the Executive, the Bank and Valley, dated
as of January 1, 1998, is hereby terminated, effective the date hereof. Except
as expressly specified in Section 14 with regard to the Severance Agreement,
this Agreement does not effect or reduce the benefits or obligations of the
parties under the Severance Agreement (or any supplement or amendment to or
replacement for that Agreement). The amendment or termination of this Agreement
may be made only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any successor
(whether direct or indirect, by purchase, merge, consolidation, liquidation or
otherwise) to all or substantially all of the assets of the Company. This
Agreement is personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
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IN WITNESS WHEREOF, Valley National Bank and Valley National Bancorp
each have caused this Agreement to be signed by their duly authorized
representatives pursuant to the authority of their Boards of Directors, and the
Executive has personally executed this Agreement, all as of the day and year
first written above.
ATTEST: VALLEY NATIONAL BANCORP
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx XxXxxxx
------------------------------- -------------------------------------
Xxxx X. Xxxxx, Secretary Xxxxxx XxXxxxx, Chairman of
the Compensation Committee
WITNESS:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxxxx
------------------------------- -------------------------------------
Xxxxxx X. Xxxxxx Xxxxx Xxxxxxxx, Executive
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