Consulting and Non-Competition Agreement
EXHIBIT
10.13
This
Consulting and Non-Competition Agreement (“Agreement”) is entered into this
23rd
day of
June, 2006 by and between Sterling Bank (the “Company”) with its place of
business headquartered at Mount Laurel, New Jersey and Xxxx X. Xxxxxxxx
(“Consultant”).
WHEREAS,
the
Company, Sterling Banks, Inc. and Xxxxxxxxxx Bancorp, Inc. (“Xxxxxxxxxx”) have
entered into a Plan of Merger, and as a condition of such merger, the Company
requires Consultant to enter into this Consulting and Non-Competition Agreement
to protect the Company’s interests in the transition following the Merger
closing; and
WHEREAS,
Consultant
has previously served Peoples Savings Bank (the “Bank”) and Xxxxxxxxxx as a
senior officer; and
WHEREAS,
the
Company recognizes the specialized knowledge and expertise of the Consultant
related to the business affairs of Peoples Savings Bank (the “Bank”) the Bank
and the financial industry, and that upon acquisition of the Bank by the Company
(“Merger”), the Company wishes to enter into a consulting and non-competition
relationship with Consultant; and
WHEREAS,
Consultant
and the Company desire to enter into such a relationship upon the terms and
conditions hereinafter contained;
NOW,
THEREFORE, in
consideration of the covenants and terms contained in this Agreement as set
forth herein and of the mutual benefits accruing to Company and to Consultant
from the consulting relationship to be established between the parties by the
terms of this Agreement, Company and Consultant agree as follows:
1. Consulting
Relationship
Company
hereby retains Consultant, and Consultant hereby agrees to be retained by
Company, as an independent contractor, and not as an employee, with such duties
and responsibilities to be effective as of the effective time of the Merger
(the
“Effective Time”).
2. Consulting
Service
Consultant
agrees that during the Term (as defined in Section 5) of this
Agreement:
| A. |
Consultant
will devote his best efforts to such position as an independent contractor
and will perform such duties and execute the policies of the Company,
as
the Company’s President and Consultant may mutually agree upon from time
to time, and that as an independent contractor, Consultant shall not
be an
officer or employee of the Company and shall not be subject to the
direct
control or supervision of the President of the Company with respect
to the
time spent, research undertaken, or procedures followed in the performance
of consulting services rendered
hereunder.
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During
the Term of the Agreement, Consultant agrees to consult with the Company, as
requested by the Company’s President, on matters related to the business affairs
and operations of the Company as they pertain to the former operations of the
Bank, strategic planning and product development, merger and acquisition
analysis, and business development opportunities that may be available to the
Company based upon the Bank’s established reputation and stature in its market
area.
| B. |
Consultant
shall exercise a reasonable degree of skill, prudence and care in
performing the services referred to in Section 2.A.
above;
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| C. |
Except
as may be limited by Section 6 hereinafter, Consultant may be an employee,
officer or director of other companies or entities and may provide
consulting services for other companies or organizations; provided
that
such activities do not conflict with the services and activity that
the
Consultant is rendering to the Company or any of its subsidiaries or
the
services or activities of the Company and its
subsidiaries;
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| D. |
Consultant
shall be available to render services to Company under this Agreement
as
requested by the President of the Company commencing on the first date
of
the initial Term of this Agreement as contained in Section 5 herein.
Consultant will agree to provide consulting services to the Company
during
the one year period after the Effective Time as follows: (i) up to
35
hours per week for the 90-day period after the Effective Time, and
(ii) up
to 5 hours per week during the balance of the year after the Effective
Time. Consultant shall not be obligated to render any services under
this
Agreement during such period when he is unable to do so due to illness,
disability or injury, subject to the terms of Section 5(b)
hereof;
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| E. |
Consultant
shall be available for service hereunder upon receipt of not less than
five (5) business days’ written notice from Company; and
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| F. |
Consultant
shall not enter into agreements or make commitments on behalf of the
Company without prior written consent or approval of the Company or
its
senior management.
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3. Compensation
| A. |
Company
agrees to pay Consultant for his services performed under this Agreement
and for his commitments and agreements as contained herein, including
Section 6 herein, a payment of $208,000 upon the Merger and $8,666.67
per
month for an additional twenty-four (24 months), payable no less than
monthly beginning on the one year anniversary of the Merger Effective
Time. The Company acknowledges that compliance by the Consultant with
Section 6, herein, is an essential component of this Agreement, and
that
such compliance is necessary for the Company to obtain the full value
of
its investment in the Merger. The parties agree that Consultant shall
not
be entitled to participate in or receive benefits under any Company
programs maintained for its employees. The Consultant will receive
remuneration for services as a director of the Company for such time
that
he may be serving in such capacity commensurate with the remuneration
received by other outside directors of the Company. Remuneration received
as an outside director shall not be in lieu of or reduce any remuneration
otherwise due under this Agreement.
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| B. |
The
Company hereby agrees to reimburse the Consultant for all reasonable
expenses incurred by the Consultant on behalf of and with the consent
of
the Company, provided that the Consultant shall furnish appropriate
documentation of such expenses and receives prior approval of such
expenses.
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4. Other
Conditions
Consultant
shall have no authority over any employee or officer of Company, nor shall
Company be required in any manner to implement any plans or suggestions
Consultant may provide.
5. Term
and Termination
The
term
of this Agreement shall begin on the date of termination of employment of the
Consultant as an employee of the Bank upon the closing date of the Merger
between the Company and the Bank and shall continue for a period of 36 calendar
months thereafter (“Term”), unless extended or terminated in accordance with the
provisions set forth below.
| A. |
Termination
for Cause. The Company may terminate this Agreement at any time for
“Just
Cause;” provided, that after any such termination, the Consultant shall
nevertheless be obligated to comply with the provisions of Section
6
hereof for the balance of the Term and the Company shall nevertheless
remain obligated to comply with the provisions of Section 3(A) hereof
for
the balance of the Term. Termination for “Just Cause” shall be defined as
termination because of the Consultant’s personal dishonesty, willful
misconduct (including willful breach of a material term of this agreement
and failure to cure such breach within 30 days after written notice
thereof from the Company), breach of fiduciary duty involving personal
profit, or willful violation of any law, rule or regulation related
to the
business or operations of the Company or its
subsidiaries.
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| B. |
Disability
or Breach of Contract. In the event of a breach of this Agreement by
the
Company or termination of service due to Consultant’s permanent
disability, all amounts due and payable for the remaining term of the
Agreement shall be paid to Consultant or his beneficiary, as the case
may
be.
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6. Non-Competition
and Confidential Business
| A. |
Consultant,
during the Term of the Agreement, will not, without the express written
consent of Company, directly or indirectly communicate or divulge to,
or
use for his own benefit or for the benefit of any other person, firm,
association, or corporation, any trade secrets, proprietary data or
other
confidential information communicated to or otherwise learned or acquired
by Consultant from the Company while serving as a Consultant or director
of the Company, if applicable, or while serving as an officer, director
or
employee of the Bank, or Xxxxxxxxxx Bancorp, Inc. (collectively, the
“Target”), except that Consultant may disclose such matters to the extent
that disclosure is (a) requested by the Company or (b) required by
a court
or other governmental agency of competent
jurisdiction.
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| B. |
The
Consultant agrees that during the Term of this Agreement, the Consultant
will not, directly or indirectly, (i) become a director, officer,
employee, shareholder, principal, or agent of, or become a consultant
or
independent contractor rendering or performing professional services
associated with providing client/customer services and products for
the
benefit of, any insured depository institution, trust company or parent
holding company of any such institution or company which has an office
within 25 miles of Xxxxxxxxxx’x headquarters office located at 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, or any other entity
whose
business in the aforesaid area materially competes with the depository,
lending or other business activities of the Company (in each case,
a
“Competitor”); provided, however, that this provision shall not prohibit
the Consultant from owning bonds, non-voting preferred stock or up
to five
percent (5%) of the outstanding common stock of any such entity if
such
common stock is publicly traded, (ii) solicit or induce, or cause others
to solicit or induce, any employee of the Company or any of its
subsidiaries to leave the employment of such entities; or (iii) solicit
(whether by mail, telephone, personal meeting or any other means,
excluding general solicitations of the public that are not based in
whole
or in part on any list of customers of the Company) any customer of
the
Company to transact business with any other entity, whether or not
a
Competitor, or to reduce or refrain from doing any business with the
Company or its subsidiaries, or interfere with or damage (or attempt
to
interfere with or damage) any relationship between the Company and
any
such customers.
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| C. |
Unless
prior written consent is obtained from the Company, during the Term
of
this Agreement, the Consultant hereby agrees that he shall not, on
his own
behalf or on behalf of others, employ, solicit, or induce, or attempt
to
employ, solicit or induce, any employee of the Company for employment
with
any Competitor, nor will Consultant directly or indirectly, on his
behalf
or for others, seek to influence any Company employee to leave the
employ
of the Company or any Company subsidiary.
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| D. |
During
the Term of the Agreement, Consultant will not make any public statements
regarding the Company without the prior consent of the Company, and
the
Consultant shall not make any statements that disparage the Company
or its
business practices.
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| E. |
The
Consultant and the Company acknowledge and agree that irreparable injury
will result to the parties in the event of a breach of any of the
provisions of this Section 6 (the “Designated Provisions”) and that the
Consultant and the Company will have no adequate remedy at law with
respect thereto. Accordingly, in the event of a material breach of
any
Designated Provision, and in addition to any other legal or equitable
remedy the Consultant or the Company may have, the Consultant or the
Company shall be entitled to the entry of a preliminary and a permanent
injunction (including, without limitation, specific performance by
a court
of competent jurisdiction located in any county in the State of New
Jersey, or elsewhere), to restrain the violation or breach thereof
by
either the Consultant or the Company, and the parties shall submit
to the
jurisdiction of such court in any such
action.
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7. Independent
Contractor
The
parties hereto agree and acknowledge that the relationship between Company
and
Consultant shall be that of an independent contractor and not that of
employer-employee, master-servant or principal-agent. Nothing in this Agreement,
or its implementation, shall be construed to be to the contrary.
8. The
Complete Agreement
This
Agreement, and any attachments or exhibits appended hereto, shall represent
the
complete Agreement between Company and Consultant concerning the subject matter
hereof and supersedes all prior agreements or understandings, written or oral.
No attempted modification or waiver of any of the provisions hereof shall be
binding on either party unless made in writing and signed by both Consultant
and
Company.
9. Notices
Any
notice required or permitted to be given hereunder shall be in writing and
shall
be effective three business days after it is properly sent by registered or
certified mail, if to the Company to the President at the administrative offices
of the Company, or if to Consultant to the address set forth beneath his
signature to this Agreement, or to such other address as either party may from
time to time designate by notice.
10. Assignability
This
Agreement may not be assigned by either party without the prior written consent
of the other party, except that no consent is necessary for the Company to
assign this Agreement to a corporation succeeding to substantially all the
assets or business of the Company whether by merger, consolidation, acquisition
or otherwise. This Agreement shall be binding upon Consultant, his heirs and
permitted assigns and the Company, its successors and permitted
assigns.
11. Severability
Each
of
the sections contained in this Agreement shall be enforceable independently
of
every other section in this Agreement, and the invalidity or non-enforceability
of any section shall not invalidate or render non-enforceable any other section
contained herein. If any section or provision in a section is found invalid
or
unenforceable, it is the intent of the parties that a court of competent
jurisdiction shall reform the section or provisions to produce its nearest
enforceable economic equivalent.
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12. Arbitration
Except
as
detailed at Section 61 herein, unless otherwise mutually agreed to by the
Consultant and the Company in writing, any controversy or claim arising out
of
or relating to this Agreement or the breach thereof shall be settled exclusively
by binding arbitration in accordance with the Commercial Arbitration Rules
of
the American Arbitration Association, with such arbitration hearing to be held
at the offices of the American Arbitration Association (“AAA”) nearest to
Bordentown, New Jersey, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Either
the Consultant or the Company may file a request for such arbitration with
the
AAA.
13. Governing
Law
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the United States where applicable and otherwise
by
the substantive laws of the State of New Jersey.
Notwithstanding
anything herein to the contrary, any payments made to Consultant pursuant to
the
Agreement, or otherwise, shall be subject to and conditioned upon compliance
with 12 USC § 1828(k) and any regulations promulgated thereunder.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and the first above written.
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STERLING
BANK (“COMPANY”)
By: ___/S/
Xxxxxx X. King_________________
____Robert
H. King________,
PRESIDENT
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Xxxx
X. Xxxxxxxx, CONSULTANT
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Address:
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______5
Shadow Lake Lane___
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_____Shamong,
NJ 08002
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