Exhibit 10.19
EMPLOYMENT AGREEMENT
This Agreement is made the lst day of October, 1995, by and among XXXX X
XXXXXX, who currently resides at 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as "Xxxxxx"), BROAD NATIONAL BANK, a national
banking association organized under Acts of Congress, with its principal
office located at 000 Xxxxx Xxxxxx in the City of Newark, County of Essex and
State of New Jersey (hereinafter referred to as the "Bank"), and BROAD
NATIONAL BANCORPORATION, the holding company for the Bank, a corporation
organized under the laws of the State of New Jersey, with its principal office
located at 000 Xxxxx Xxxxxx in the City of Newark, County of Essex and State
of New Jersey (hereinafter referred to as the "Bancorp"). The Bank and
Bancorp are sometimes referred to herein collectively as the "Corporations".
In any instance where reference is made to both the Bank and Bancorp or the
Corporations, unless the context clearly requires otherwise, conditions,
practices or actions referred to shall be identical or joint.
W I T N E S S E T H:
WHEREAS, Xxxxxx has since April 9, 1992 been employed as President and
Chief Operating Officer of the Bank and of Bancorp; and
WHEREAS, the Boards of Directors of the Corporations believe that the
continued leadership and productivity of Xxxxxx will be extremely beneficial
and will significantly contribute to the growth and financial security of the
corporations; and
WHEREAS, the Corporations wish to assure themselves of the services of
Xxxxxx as a employee, officer and, if elected, director of the Corporations
for the period provided in this
Agreement, and Xxxxxx had agreed to serve in the employ of the Corporations on
a full-time basis in such capacities on the terms and conditions hereinafter
set forth; and
WHEREAS, the Boards of Directors of the Corporation have determined that
the best interests of the Corporations would be served by providing Xxxxxx
with protection and special benefits following any change of control of the
Corporations;
NOW, THEREFORE, for and in consideration of the employment of Xxxxxx
with the Corporations, the compensation to be paid and the other benefits to
be provided to Xxxxxx by the Corporations for his services and the mutual
covenants set forth in the Agreement, the parties hereto hereby agree as
follows:
1. EMPLOYMENT
1.1 The Corporation agrees to the continued employment of Xxxxxx, and
Xxxxxx agrees to continue to be employed by the Corporations for the period
stated in Section 2.1 hereof and upon the other terms and conditions herein
provided.
1.2 If Xxxxxx is suspended from office and/or temporarily prohibited
from participating in the conduct of the affairs of the Bank or Bancorp, or
both of them, by a notice served under section 1818(e)(3) or section
1818(g)(1) of the Federal Deposit Insurance Act(12 U.S.C. 1818(e)(3), or
1818(g)(1), all obligations of the Corporations under this Agreement shall be
suspended as of the date of service of the notice, unless stayed by
appropriate proceedings. If the charges specified in the notice are
dismissed, Xxxxxx shall be reinstated in his employment with the Corporations
and the Corporations may in their discretion (i) pay Xxxxxx all or part of the
compensation withheld while their obligations under this Agreement were
suspended, and/or (ii) reinstate (in whole or in part) any of their
obligations which were suspended.
1.3 If Xxxxxx is removed and/or permanently prohibited from
participating in the conduct of the affairs of the Bank or Bancorp, or both of
them, by an order issued under section 8(e)(4) or section (g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or 1818(g)(1), all
obligations of the Corporations under this Agreement shall terminate as of the
effective date of the order, and Xxxxxx shall not have the right to receive
compensation or any of the other benefits provided for hereunder, unless and
then only to the extent required by law, for any period after such removal or
prohibition.
1.4 If the Bank is in default (as defined in section 1813(x)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. 1813(x)(1), all obligations of
Corporations under this Agreement shall terminate as of the date of default,
but this section shall not affect any vested rights of the parties.
1.5 All obligations of the Corporation under this Agreement shell be
terminated, except to the extent it is determined that continuation of this
Agreement is necessary for the continued operation of the Bank, (i) by the
Federal Deposit Insurance Corporation ("FDIC"), at any time the FDIC enters
into an agreement to provide assistance to or on behalf of the3 Bank under the
authority of section 1823(c) of the Federal Deposit Insurance Act (12 U.S.C.
1823(C)), or (ii) by the FDIC at any time the FDIC approves a supervisory
merger to resolve problems related to the operation of the Bank or when the
Bank is determined by FDIC to be in an unsafe or unsound condition, but, in
any of the above-described events, the vested rights of Xxxxxx shall not be
affected.
1.6 In the event of receipt of any notice or order, a default, an
agreement to provide assistance, or an approval of the supervisory merger as
such are described in Sections 1.2, 1.3, 1.4 or 1.5 hereof, the suspension or
termination of the obligations of the Corporations hereunder shall
be automatic and shall not be conditioned upon any further action by the
Corporations or delivery of notice to Xxxxxx and shall be deemed a suspension
or termination of employment jointly and severally by the Bank, Bancorp and
the regulatory body providing or delivering such document; provided, however,
that such suspension or termination shall not prejudice Xxxxxx'x vested rights
under this Agreement.
2. TERMS, POSITION AND RESPONSIBILITIES
2.1 Term of Employment. The period of Xxxxxx'x employment under this
Agreement with the Bank and with Bancorp, respectively, shall commence as of
October 1, 1995 and shall continue for a period of fifteen (15) full calendar
months thereafter and any extension thereafter, unless this Agreement is
earlier terminated in accordance with the terms hereof (the "Employment
Period"). Notwithstanding the foregoing, if at any time during the Employment
Period the shareholders of Bancorp vote either (i) to approve an agreement to
merge or consolidate Bancorp or the Bank with or into another corporation or
(ii) to sell or otherwise dispose of all or substantially all of its or their
assets, in either case, in a transaction in which a majority of the
outstanding stock of the surviving or acquiring corporation following such
merger, consolidation or sale of assets shall not be held by persons who held
a majority of the outstanding shares of Bancorp immediately prior to such
transaction the period of Xxxxxx'x employment shall automatically be extended
without further action by the respective parties for an additional twenty-four
(24) calendar months. In such event, the Employment Period of this Agreement
shall for all purposes hereunder be deemed to include the foregoing
twenty-four (24) calendar month extension.
2.2 Duties During Employment. During the Employment Period, Xxxxxx
shall serve as the President and Chief Operating Officer of Broad National
Bank and of Broad National Bancorporation, and shall have the customary duties
and responsibilities of each such office. The employment of Xxxxxx in such
foregoing capacities is a material condition of this Agreement for purposes of
Section 4.1C. In addition, during the Employment Period, if elected, Xxxxxx
shall also serve, without any additional compensation or fees, as a member of
the Boards of Directors and as a member of the Executive Committees of the
Corporations.
3. COMPENSATION AND REIMBURSEMENT OF EXPENSES
3.1 Compensation - Base Salary.
A. The compensation specified under this Agreement shall
constitute the salary and benefits paid Xxxxxx for his services as described
in Section 2.2 by the Bank and Bancorp. The Corporations shall pay Xxxxxx as
compensation an annual salary ("Base Salary") at the combined rate of the One
Hundred Fifty Seven Thousand Five Hundred Dollars ($157,500) for the remainder
of the calendar year 1995. During the period of this Agreement it is
understood and agreed that Xxxxxx'x Base Salary shall be reviewed by the Board
of Directors of the Corporation or the Bank or a committee or committees
thereof at least annually. The first such review shall be made no later than
December 31, 1995. The Board of Directors of the Corporation or the Bank or
the committee or committees thereof may, in their sole discretion, increase
the Base Salary to be paid to Xxxxxx from time to time, to reflect Xxxxxx'x
performance and to maintain a compensation level comparable to that of
similarly situated executives in the financial institutions industry, but the
Base Salary may not be decreased below the Base Salary specified above in this
paragraph A without the written consent of Xxxxxx.
B. From time to time, the Boards of Directors of the
Corporations shall apportion between the Bank and Bancorp the amounts payable
hereunder without affecting Xxxxxx'x rights hereunder. Such apportionment
shall be made (i) on the basis of the judgment of such Boards of Directors as
to Xxxxxx'x relative responsibilities and contributions with respect to the
Bank and Bancorp, and (ii) on the basis of such other factors as such Boards
of Directors may deem appropriate.
3.2 Participation in Bonus Plan. Xxxxxx shall be entitled to
participate in such bonus or other incentive compensation plan(s) as currently
is or may hereafter be established by the Corporations for their respective
executive officers during the Employment Period. Any such bonus shall be
payable in the manner specified by the appropriate Board of Directors, or
committee of such Board of Directors, at the time such bonus is awarded.
3.3 Participation in Benefit Plans. The payments provided for in
Section 3, 5 and 6 hereof, except where specifically provided otherwise, are
in addition to any other benefits to which Xxxxxx may be, or may become,
entitled under any group hospitalization, health, dental care, or sick-leave
plan, life or other insurance or death benefit plan, travel or accident
insurance, retirement income or pension plan or program of the Corporations,
or other present or future group employee benefit plan or program of the Bank
or Bancorp, for which their executive officers are or shall become eligible to
receive during the Employment Period, and during any subsequent period for
which Xxxxxx shall be entitled to receive payments from the Corporations under
sections 5 and 6 to the extent permissible under the general terms and
provisions of such plans or programs and in accordance with the provisions
thereof. Xxxxxx shall contribute such amounts towards such benefits as are
required of all employees so long as he receives such
benefits. Nothing contained in this Agreement shall prevent the Boards of
Directors of the Corporations from amending or otherwise altering any such
plan, program or arrangement so long as such amendment or alteration equitably
affects all executive officers of the Bank or Bancorp.
3.4 Additional Benefits. The Corporations recognize that it is
essential to the performance by Xxxxxx of his duties and responsibilities that
the Corporations, at their cost, provide him with the use of certain
facilities and that the Corporations incur certain expenses during the
Employment Period, as follows:
A. An office commensurate with his position, and a secretary,
as he requires.
B. The nonexclusive use of a late model Buick or Oldsmobile or
comparable car which shall be used by other personnel of the Corporations when
not used by Xxxxxx.
C. Payment of or reimbursement to Xxxxxx, in accordance with
such policies and procedures as the respective Boards of Directors of the Bank
or the Corporation may establish from time to time, for all reasonable travel,
entertainment, country club dues and other expenses incurred by Xxxxxx in the
performance of his obligations under this Agreement; except that country club
dues shall not be paid for Xxxxxx unless there is a change in control as
defined herein or as otherwise specified by the Board.
X. Xxxxxx shall be entitled to four (4) weeks paid vacation per
calendar year, or such longer period as the Corporations may from time to time
determine (prorated in any calendar year in such longer period during which
Xxxxxx is employed hereunder for less than such entire year or longer period).
E. Participation in the Bank's Split Dollar Life Insurance Plan
with coverage of $500,000.
4. TERMINATION OF EMPLOYMENT
4.1 Termination of employment. Xxxxxx'x employment under this
Agreement may be terminated by the Corporation or Xxxxxx as follows:
A. Disability. If, as a result of Xxxxxx'x incapacity due to
physical or mental illness or injury, Xxxxxx shall have been absent from his
duties with the Corporation(s) on a full time basis or he is unable to
substantially perform the services required for his employment for a period of
six (6) consecutive months, or shorter periods aggregating one hundred eighty
(180) days within any consecutive twelve (12) month period, and within thirty
(30) days after written notice of potential termination is given by either the
Bank or Bancorp he shall not have returned to the full-time performance of his
duties within such notice period, then Xxxxxx'x employment under this
Agreement will terminate for "Disability".
B. Death. If Xxxxxx dies while employed under this Agreement,
his employment with the Corporations under this Agreement will terminate as of
the date of his death ("Date of Death").
C. Termination By Xxxxxx. Xxxxxx shall be entitled to
terminate his employment with the Corporation (i) if the Corporation defaults
or otherwise commits a breach of a material term or condition of this
Agreement, or (ii) for "Good Reason" as defined below or (iii) upon the
occurrence of a "Change of Control".
For purposes of this Agreement "Good Reason" shall mean any
of the following:
1. The assignment to Xxxxxx of any duties inconsistent
with, or the reduction of powers or functions associated with Xxxxxx'x
position, title, duties, responsibilities
and status with the Corporation as set forth herein, or as later agreed upon by
Xxxxxx and the Corporation;
2. Any removal of Xxxxxx from, or any failure to re-elect
Xxxxxx to, any position(s) or office(s) Xxxxxx held immediately prior to such
action;
3. A reduction by the Corporation in Xxxxxx'x annual base
Compensation;
4. The Corporation's transfer of Xxxxxx to another
geographic location from his present office location, except for required
travel on the Corporation's business to an extent substantially consistent
with Xxxxxx'x business travel obligations immediately prior to the date
hereof;
5. The failure by the Corporation to continue in effect
any employee benefit plan, program or arrangement (including, without
limitation the Corporation'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 Xxxxxx is
participating immediately prior to the date hereof (except that the
Corporation may institute or continue plans, programs or arrangements
providing Xxxxxx with substantially similar benefits); the taking of any
action by the Corporation which would adversely affect Xxxxxx'x participation
in or materially reduce Xxxxxx'x benefits under, any of such plans, programs
or arrangements; the failure to continue, or the taking of any action which
would deprive Xxxxxx, of any material fringe benefit enjoyed by Xxxxxx
immediately prior to the date hereof;
6. Any purported termination of Xxxxxx'x employment by
the Corporation 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.
For purposes of this Agreement, a "Change in Control" shall
mean and shall be deemed to have occurred, if at any time during the
Employment Period, directly or indirectly, in one or a series of transactions.
1. any person or group (as defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, (15 U.S.C. 78m(d)
and 15 U.S.C. 78(d)) or under the rules or regulations of the Federal Home
Loan Bank Board or of the Federal Deposit Insurance Corporations) as in effect
on the date hereof other than Bancorp or Xxxxxx Xxxx has acquired:
a) more than twenty (20%) percent of the
outstanding common stock of the Bank or Bancorp, or equivalent in voting power
of any class or classes of outstanding securities of the Bank or Bancorp
ordinarily entitled to vote in elections of directors;
b) irrevocable proxies representing more than
twenty (20%) percent of any class of voting stock of the Bank or Bancorp;
c) any combination of voting stock and irrevocable
proxies representing more than twenty (20%) percent of any class of voting
stock of the Bank or Bancorp.
d) the ability to control in any manner the
election of a majority of the directors of the Bank or Bancorp;
2. The Xxxx/Xxxxxx family sells or otherwise disposes of
fifty (50%) percent or more of the voting securities of the Bank or Bancorp
owned by such family as of the date Xxxxxx first became employed by the
Corporations to a nonfamily member or members.
3. Any merger or consolidation of the Bank or Bancorp
into or with another entity has occurred and the holders of a majority of the
voting stock of the surviving entity shall not have been shareholders of
Bancorp immediately prior to such transaction; or
4. Any transfer or sale of all or substantially all of
the assets of the Bank or Bancorp has occurred.
D. Termination by Corporations. Notwithstanding any other
provisions of this Agreement, the Corporation shall be entitled to terminate
Xxxxxx'x employment with or without "cause". For purposes of this Agreement,
"cause" shall mean (i) willful and continued failure by Xxxxxx to perform his
duties for the Corporation under this Agreement (as it may be modified or
supplemented in the event of a Change-in-Control) after at least one warning
in writing from the Corporation's Board of Directors identifying specifically
any such failure; (ii) the willful engaging by Xxxxxx in misconduct which
causes material injury to the Corporation as specified in a written notice to
Xxxxxx from the Board of Directors; 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 (with respect to
drunkenness or absenteeism only) in writing from the Board of Directors to
refrain from such behavior. No act or failure to act on the part of Xxxxxx
shall be considered willful unless done, or omitted to be done, by Xxxxxx not
in good faith and without reasonable belief that the action or omission was in
the best interest of the Corporation.
4.2 Notice of Termination. Any purported termination by the
Corporations or by Xxxxxx in accordance with Section 4.1, (excluding Section
4.1B) shall be communicated by written Notice of Termination to the other
party or parties hereto in accordance with this Section 4.2. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Xxxxxx'x employment under the provision so
indicated.
4.3 Date of Termination, etc. "Date of Termination" shall mean
(a) if Xxxxxx'x employment is terminated for Disability, thirty (30) days
after a Notice of Termination is given (provided that he shall not have
returned to the performance of his duties on a full time basis during such
30-day period), and (b) if his employment is terminated for any other reason,
the date specified in the Notice of Termination; provided that if within
thirty (30) days after a Notice of Termination is given the party receiving
such Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the earlier of:
(I) the date upon which the dispute is finally determined by mutual agreement
of the parties or by a binding arbitration award entered in accordance with
Section 9 hereof; or, (ii) the expiration of the Employment Period then
existing under this Agreement; provided, further, that the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable dispatch and diligence. Notwithstanding the pendency of such
dispute, the Corporations will continue to pay Xxxxxx his full compensation in
effect when the notice giving rise to dispute was given (including, but not
limited to, base salary) and continue him as a participant in all
compensation,
benefit and insurance plans in which he was participating when
the notice giving rise to the dispute was given as though termination had not
occurred, until the dispute is finally resolved in accordance with this
Section at which time the parties shall adjust for any overpayment or
underpayment made. Amounts paid under this Section are in addition to the
other amounts due under this Agreement and unless specifically provided
otherwise shall not be offset against to reduce any other amounts due under
this Agreement.
5. TERMINATION BENEFITS
5.1 Disability Termination Benefits. Upon the termination of Xxxxxx'x
employment with the Corporations as a result of "Disability" pursuant to
Section 4.1A, the Corporations shall pay to Xxxxxx a monthly disability
benefit equal to one hundred (100%) percent of his Base Salary, at the rate in
effect on the "Date of Termination", for a period of one year from and after
said date; provided, however, that any amounts payable under this Section 5.1
shall be reduced by any amounts paid to Xxxxxx under any other disability
program or policy (other than Social Security) maintained by the Bank or
Bancorp. If the amount of such disability insurance payments exceed the
amount otherwise payable under this Section 5.1, Xxxxxx may retain the entire
amount of such disability insurance payments inclusive of the excess, if any.
Such payments shall be made by the Corporations to Xxxxxx, or in the event of
his subsequent death, to his beneficiary or beneficiaries, or his estate, as
the case may be, in accordance with the customary payroll practices of the
Corporations.
During the period Xxxxxx is entitled to receive payments from the
Corporations under this Section 5.1, the Corporations shall maintain or cause
to be maintained life and health insurance benefits for Xxxxxx at least
equivalent to those he had at the Date of Termination with
any amendments and/or alterations subsequently made equitably to all executive
officers of the Bank and/or Bancorp. During the period Xxxxxx is entitled to
receive payments from the Corporations under this Section 5.1 he shall not be
considered an "employee" of the Corporations except as respects any
requirements specifically imposed by law or as may otherwise be required to
continue any insurance benefits provided for this Section 5.1.
5.2 Benefits Payable Upon Death. Within thirty (30) days after the
Date of Death, the Corporations shall pay to Xxxxxx'x beneficiary or
beneficiaries or his estate, as the case may be, a lump sum benefit equal to
three (3) times the monthly rate of Xxxxxx'x Base Salary as in effect on the
Date of Death.
5.3 Benefits Payable Upon Termination by Xxxxxx. In the event that
Xxxxxx terminates his employment with the Corporations under Section 4.1 of
this Agreement, the Corporations shall pay to Xxxxxx within thirty (30) days
of such termination as severance a lump sum equal to the aggregate amount of
the future Base Salary, at the monthly rate then in effect, Xxxxxx would have
received if he continued in the employ of the Corporations for the remainder
of the Employment Period then existing under this Agreement plus, if the
Employment Period shall not have been already extended pursuant to the terms
of Section 2.1 by reason of a vote of shareholders, an additional twenty-four
(24) months and the incentive bonuses to which he would have otherwise been
entitled during such period of time, based on the average incentive bonus
received by him during the then two most recent fiscal years of the
Corporations; provided, however, that if the Bank, Bancorp or such entity as
survives the Change of Control shall offer to assume the obligations of the
Corporations under this Agreement, and to extend this Agreement, if necessary,
to cause the remaining term to equal at least twenty-four (24) months; and in
connection therewith shall offer Xxxxxx a position which in Xxxxxx'x
reasonable judgment is of equal or greater responsibility, importance or scope
than described in Section 2.2 above, or if Xxxxxx shall enter into a new
Employment Agreement with the Bank, Bancorp or such entity as survives the
Change of Control, then in such event, the Corporations shall have no
obligation to, and Xxxxxx shall not be entitled to, receive any of the
foregoing benefits or the benefits provided under Section 6 hereof.
5.4 Termination by the Corporations for Cause. If Xxxxxx'x
employment under this Agreement is terminated by either the Bank or Bancorp
for "cause" (as defined in Section 4.1D), or if Xxxxxx voluntarily resigns his
employment other than pursuant to Section 4.1C, the Corporations shall pay to
Xxxxxx his Base Salary as then in effect that has accrued to the Date of
Termination. Unless otherwise determined by the Boards of Directors of the
Corporations, Xxxxxx shall have no right to receive compensation or other
benefits under this Agreement after such a termination for "cause" or
following a voluntary resignation.
5.5 Termination by the Corporations for Other than Cause. If
during the Employment Period the Bank or Bancorp or both of them terminate
Xxxxxx'x employment other than for "cause" (as defined in Section 4.1D) or
other than for the reasons specified in Sections 1.3, 1.4, 1.5 and 1.6 of this
Agreement, then in such event the Corporations shall pay Xxxxxx, or in the
event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be, as severance a lump sum equal to the aggregate
amount of the future Base Salary payments Xxxxxx would have received if he
continued in the employ of the Corporations for the remainder of the then
existing Employment Period of this Agreement plus twenty-four (24) months at
the highest rate of Base Salary and bonus paid to Xxxxxx at any time under
this Agreement or within
two years prior to the date hereof. Xxxxxx shall not be required to mitigate
damages by seeking other employment and payments required to be made hereunder
shall not be reduced by any other income which Xxxxxx may receive or by any
setoffs or claims which may exist against Xxxxxx for any reason whatsoever.
5.6 Certain Reduction of Payments by the Corporations.
A. Anything in this Agreement to the contrary
notwithstanding, prior to the payment of any lump sum amount payable
hereunder, the certified public accountants of the Corporations immediately
prior to a Change of Control (the "Certified Public Accountants) shall
determine as promptly as practical and in any event within 20 business days
following the termination of employment of Xxxxxx whether any payment or
distribution by the Corporations to or for the benefit of Xxxxxx (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would more likely than not be
nondeductible by the Corporations for Federal income purposes because of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"),
and if it is then the aggregate present value of amounts payable or
distributable to or for the benefit of Xxxxxx pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are hereinafter referred
to as "Agreement Payments") shall be reduced (but not below zero) to the
"Reduced Amount" For purposes of this paragraph, the "Reduced Amount" shall
be an amount expressed in present value which maximizes the aggregate present
value of Agreement Payments without causing any Payment to be nondeductible by
the Corporations because of said Section 280G of the Code.
B. If under paragraph A. of this section the Certified
Public Accountants determine that any Payment would more likely than not be
nondeductible by the
Corporations because of Section 280G of the Code, the Corporations shall
promptly give Xxxxxx notice to that effect and a copy of the detailed
calculation thereof and of the Reduced Amount, and Xxxxxx may then elect, in
his sole discretion, which and how much of the Agreement Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Agreement Payments equals the Reduced Amount), and shall advise
the Corporations in writing of his election within 20 business days of his
receipt of notice. If no such election is made by Xxxxxx within such 20-day
period, the Corporations may elect which and how much of the Agreement Payments
shall be eliminated or reduced (as long as after such election the aggregate
present value of the Agreement Payments equals the Reduced Amount) and shall
notify Xxxxxx promptly of such election. For purposes of this paragraph,
present value shall be determined in accordance with Section 280G(d)(4) of the
Code. All determinations made by the Certified Public Accountants shall be
binding upon the Corporations and Xxxxxx and shall be made within 20 business
days of a termination of employment of Xxxxxx. With the consent of Xxxxxx, the
Corporations may suspend part or all of the lump sum payment due Xxxxxx
hereunder until the Certified Public Accountants finish the determination and
Xxxxxx (or the Corporations, as the case may be) elect how to reduce the
Agreement Payments, if necessary. As promptly as practicable following such
determination and the elections hereunder, the Corporations shall pay to or
distribute to or for the benefit of Xxxxxx such amounts as are then due to
Xxxxxx under this Agreement and shall promptly pay to or distribute for the
benefit of Xxxxxx in the future such amounts as become due to Xxxxxx under
this Agreement.
C. As a result of the uncertainty in the application of
Section 280G of the Code, it is possible that Agreement Payments may have been
made by the Corporations which
should not have been made ("Overpayment") or that additional Agreement Payments
which will have not been made by the Corporations could have been made
("Underpayment"), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Certified Public Accountants, based
upon the assertion of a deficiency by the Internal Revenue Service against the
Corporations or Xxxxxx which said Certified Public Accountants believe has a
high probability of success, determines that an Overpayment has been made, any
such Overpayment shall be treated for all purposes as a loan to Xxxxxx which
Xxxxxx shall repay to the Corporations together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(B) of the Code; provided,
however, that no amount shall be payable by Xxxxxx to the Corporations to the
extent such payment would not reduce the amount which is subject to taxation
under Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Corporations
to or for the benefit of Xxxxxx together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(B) of the Code.
6. OTHER TERMINATION BENEFITS
6.1 Insurance. If Xxxxxx'x employment with the Corporations shall be
terminated either by Xxxxxx pursuant to the provisions of Section 4.1C or by
the Corporations or either of them without "cause", the Corporations will
continue or cause to be continued the life and health insurance coverage
substantially identical to the coverage maintained by the Corporations for
Xxxxxx prior to his severance. Xxxxxx shall contribute such amounts towards
such benefits as are required of all employees of the Corporations so long as
he receives such benefits.
6.2 Special Retirement Benefits. If Xxxxxx'x employment with the
Corporations shall be terminated either by Xxxxxx pursuant to the provisions
of Section 4.1C or by the Corporations or either of them without "cause",
Xxxxxx shall be entitled to receive "Special Retirement Benefits" from the
Corporations so that the total retirement benefits Xxxxxx receives from the
Corporations will approximate the total retirement benefits Xxxxxx would have
received under all qualified retirement plans (which shall not include
severance plans) of the Corporations in which Xxxxxx participates were Xxxxxx
fully vested under such qualified retirement plans as if Xxxxxx had continued
in the employ of the Corporations for at least sixty (60) consecutive months
in the absence of early termination or until his retirement. The benefits
specified in this Section 6.2 will include all ancillary benefits, such as
early retirement and survivor rights and benefits available at retirement.
The amount payable to Xxxxxx or his beneficiary(s) under this Section 6.2
shall equal the excess of (1) the benefits that would be paid to Xxxxxx or his
beneficiaries, under all retirement plans of the Corporations in which Xxxxxx
participates if Xxxxxx were fully vested under such plans or (2) the benefits
that are payable to Xxxxxx or his beneficiaries under all retirement plans of
the Corporations in which Xxxxxx participates. These Special Retirement
Benefits are provided on an unfunded basis, are not intended to meet the
qualification requirements of Section 401 of the Internal Revenue Code and
shall be payable solely from the general assets of the Corporations. These
Special Retirement Benefits shall be payable at the times and in the manner
provided in the applicable retirement plans to which they relate.
6.3 Split Dollar Insurance. If pursuant to Section 4.1C Xxxxxx'x
employment with the Corporations following a "Change of Control" shall
terminate, the Corporations shall continue
to pay the premium for and maintain the Broad National Bank Split Dollar Life
Insurance for and on behalf of Xxxxxx with coverage of $500,000 until such
time as said policy is fully paid.
6.4 Use of Vehicle. If pursuant to Section 4.IC Xxxxxx shall
terminate his employment with the Corporations following a "Change of
Control", the Corporations shall at their option provide Xxxxxx with the use
of the late model car specified in Section 3.4B for a period of twenty-four
(24) months following the Date of Termination or the reasonable value
corresponding to such usage; provided, however, that notwithstanding the
foregoing Xxxxxx may in lieu thereof elect to purchase said vehicle at its
then present value by providing the Corporations with written notice of such
election.
6.5 Payments Upon Termination. Termination of this Agreement on any
grounds whatsoever will not affect the obligations of the parties to make
payment of any sums that have accrued but remain unpaid at effective date of
such termination.
7. SOURCE OF FUNDS
Except for those benefits payable directly from the qualified retirement
or pension plan of the Corporations or either of them, all payments and
benefits provided in Sections 3, 5 or 6 shall be paid to Xxxxxx or paid for on
behalf of Xxxxxx from the general funds of the Corporations and no special or
separate funds shall be established and no other segregation of assets shall
be made to assure payment. Xxxxxx shall have no right, title or interest
whatsoever in or to any investments which the Corporations may make to aid
them in meeting their obligations hereunder.
8. FEDERAL INCOME TAX WITHHOLDING
The Corporations may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
9. ARBITRATION
In the event that any claim, controversy, issue or other dispute arises
under this Agreement, the breach thereof, the termination of Xxxxxx'x
employment by the Corporations under Section 4 of this Agreement, including
any claim based in whole or in part on federal or state constitutions,
statutes or regulations, local ordinances, the common law or public policy,
including, but not limited to Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act of 1967, the Employee Retirement Income
Security Act of 1974, Americans with Disabilities Act, the Worker Adjustment
and Retraining Notification Act, the Employee Polygraph Protection Act of
1988, the Occupational Safety and Health Act, the Fair Labor Standards Act,
the Civil Rights Act of 1971; the Rehabilitation Act of 1973 and the Vietnam
Era Veterans Readjustment Assistance Act of 1974, or the amount of any
payments under Sections 5 or 6, if the claim, controversy, issue or dispute is
not settled by agreement among the parties, the dispute shall be settled by a
single arbitration in the State of New Jersey, under the auspices of, and in
accordance with the applicable rules of, the American Arbitration Association
then in effect, and the decision of the arbitrator shall be final and
conclusive on the parties and judgment upon such decision may be entered in
any court having jurisdiction thereof. The award of the arbitrator shall be
in writing and shall specify the factual and legal basis for the award.
Xxxxxx shall be entitled to reimbursement by the Corporations for all
reasonable, legal and other professional fees and expenses incurred by him in
such arbitration or in enforcing the award,
including the reasonable attorneys' fees. The parties agree that resolution of
any such claim, controversy, issue or other dispute pursuant to the foregoing
arbitration proceeding is intended to be final and binding on them and any
award rendered by such arbitration shall constitute a complete, final and
binding adjudication of any and all legal or factual issues pertaining to
or arising out of the matter that gave rise to the controversy or dispute.
The provisions of this Article 9 shall survive the termination of this
Agreement for any reason whatsoever.
10. CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement shall preclude the Corporations or either of
them from consolidating or merging into or with, or transferring all or
substantially all of their assets to, another corporation which assumes this
Agreement and all obligations and undertakings of the Corporations hereunder.
11. POST-TERMINATION COVENANTS
11.1 Covenant Not to Compete. Xxxxxx covenants and agrees that, in
consideration of the amounts to be paid and benefits to be provided to Xxxxxx
hereunder, for a period of twelve (12) months following the termination of his
employment with the Corporations pursuant to Section 4.1A, 4.1C or Section
4.1D, Xxxxxx shall not be employed as an executive officer of, shall not
control, manage or otherwise participate in the management of, any other
financial institution having its principal headquarters and/or executive
offices in the County of Essex, State of New Jersey, or of a company that owns
or controls a majority of the voting securities of any such financial
institution. The term "financial institution" shall mean and include any
bank, savings bank, savings and loan association or credit union.
11.2 In the event of a Change of Control, either before or after a Date
of Termination, Article 11 shall in its entirety become legally inoperative
and Xxxxxx will no longer be bound by any of the covenants contained therein.
11.3 Solicitation of Employees. Xxxxxx covenants and agrees that, in
consideration of the amounts to be paid and benefits to be provided to Xxxxxx
hereunder, for a period of twelve (12) months following the termination of his
employment with the Corporations irrespective of the time, manner or cause of
said termination, Xxxxxx shall not solicit any employee of the Bank or Bancorp
to leave its or their employ or join the employment of, or employ, or permit
any business of which he is an owner, partner, substantial shareholder or
principal executive to solicit the employment of or employ, any person who is
employed by the Bank or Bancorp or has been employed by the Bank or Bancorp
within two (2) years prior to the time of such solicitation of employment.
11.4 Covenants to Survive. The parties hereto agree and acknowledge
that except as provided in Section 11.2 above, the terms of this Article 11
and of Article 20 shall survive the termination of this Agreement for any
reason whatsoever.
12. ENTIRE AGREEMENT
This writing shall constitute the entire Agreement of the parties as to
the employment
This writing shall constitute the entire Agreement of the parties as to
the employment and compensation of Xxxxxx by the Corporations, and shall
supersede any and all prior agreements and understandings, whether they be
oral or in writing.
13. SEVERABILITY
If, for any reason, any provision of this Agreqment is held invalid,
such invalidity shall not effect any other provision of this Agreement not
held so invalid, and each such other provision shall to the full extent
consistent with law continue in full force and effect. If any provision of
this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision together with all provisions of this
Agreement shall to the full extent consistent with law continue in full force
and effect.
14. AMENDMENT OF AGREEMENT
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
15. WAIVER
No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by a written instrument executed by the
party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each waiver
shall operate as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future nor as to any act
other than that specifically waived.
16. HEADINGS
Headings used in this Agreement are for convenience only and shall not
affect the construction of this Agreement.
17. BINDING EFFECT AND GOVERNING LAW
All of the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of, and be enforceable by and against Xxxxxx and
his executors, administrators and heirs and Broad National Bank and Broad
National Bancorporation and their respective permitted successors and assigns.
This Agreement has been executed and delivered in the State of New Jersey and
its validity, interpretation, performance and enforcement shall be govemed by
the laws of said State.
18. NO ATTACHMENT
Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, communication, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt to voluntary or involuntary, to affect any such action shall be null,
void and of no effect.
19. NONASSIGNABILITY
Neither this Agreement nor any right or interest hereunder shall be
assignable by Xxxxxx, his beneficiaries or legal representative without the
Corporations' prior written consent; provided, however, that nothing in this
Section 19 shall preclude (a) Xxxxxx from designating a beneficiary to receive
any benefit payable hereunder upon his death, or (b) the executors,
administrators or other legal representatives of Xxxxxx or his estate from
assigning any rights hereunder to the person or persons entitled thereto.
20. CONFIDENTIAL INFORMATION
20.1 Xxxxxx shall not, directly or indirectly, during the term of his
employment hereunder and any time after termination of his employment for any
reason, to the detriment of the Corporations, knowingly divulge, disclose,
disseminate, publish, reveal or otherwise communicate to any unauthorized
person any Confidential Information relating to the Corporations or to any of
the businesses operated by them.
20.2 Xxxxxx confirms that the Confidential Information constitutes the
exclusive property of the Corporations. Upon termination of his employment
hereunder, Xxxxxx will promptly return to the Corporations all materials
(whether prepared by Xxxxxx or others) containing, constituting, embodying or
illustrating Confidential Information, and all other property of the
Corporations then in his possession or custody.
20.3 As used in this Article 20, the following terms shall have the
following meanings:
A. The term "Confidential Information" means information
disclosed to Xxxxxx or known to Xxxxxx as a consequence of or through his
employment by the Corporations and not generally known in the banking
industry. Such information includes, but is not limited to, information
relating to the Corporations' products, research, developments, accounting,
finances, marketing, merchandising and selling, and specifically includes
future business plans, client list, applicant list, and training and operating
methods and techniques. The term "Confidential Information" does not include
information which (I) at the time it was received by Xxxxxx was generally
available to the public; (ii) prior to its use by Xxxxxx, becomes generally
available to the public through no act or failure of Xxxxxx; (iii) prior to
its becoming known to Xxxxxx as a consequence of or through his employment by
the Corporations, was
otherwise known to Xxxxxx; or (iv) is received by Xxxxxx from a person who is
not a party to this Agreement and he was not under an obligation of confidence
with respect to such information.
B. "Materials" includes, but is not limited to, books,
notebooks, documents, records, photographs, films, video tapes, audio
recordings, discs, diskettes, or other electronic or optical storage media,
software and support materials, and similar or other materials.
20.4 Xxxxxx shall not otherwise knowingly act or conduct himself (a) to
the material detriment of the Corporations, or (b) in a manner which is
inimical or contrary to the interest thereof.
IN WITNESS WHEREOF, the Corporations have caused this Agreement to be
executed and their respective seals to be affixed hereunto by their duly
authorized officers, and Xxxxxx, has signed this Agreement, all as of the date
first written above.
BROAD NATIONAL BANK, a national banking association organized under the
laws of the United States of America, hereby acknowledges and agrees to be
bound to the extent applicable by the terms of the Employment Agreement dated
October 1, 1995 between XXXX X. XXXXXX and BROAD NATIONAL BANCORPORATION and
guarantees payments and performance of the terms of said agreement to the
extent permitted by the laws of New Jersev and the laws of the United States
of America.
ATTEST: BROAD NATIONAL BANCORPORATION
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx
Secretary Xxxxxx X. Xxxx
Chairman & CEO
ATTEST: BROAD NATIONAL BANK
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx
Secretary Xxxxxx X. Xxxx
Chairman & CEO
WITNESS:
/s/ Xxxxxxxx X. Xxxxxxxxxx /s/ Xxxx X. Xxxxxx 10/1/95
XXXX X. XXXXXX (Dated)
