EXHIBIT 10(S)
CHANGE-IN-CONTROL AGREEMENT
(First Senior Vice President)
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made as of this 28th
day of November, 2001, 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 XXXXXXXXXXX (the "Executive").
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank for
at least three full 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.
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 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. Base Salary. "Base Salary", as used in Section 9 hereof, means
-----------
the annual cash base salary (excluding any bonus and the value of any fringe
benefits) paid to the Executive at the time of the termination of employment
unless such amount has been reduced after a Change in Control, in which case
such amount shall be the highest base salary in effect during the 18 months
prior to the Change in Control.
b. 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 Company's Board of Directors 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 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 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 interest of the Company.
c. 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) upon the approval by Valley's stockholders of (A)
a merger or consolidation of Valley with or into
another corporation (other than a merger or consolidation which is approved by
at least two-thirds of the Continuing Directors (as hereinafter defined) or the
definitive agreement for which provides that at least two-thirds of the
directors of the surviving or resulting corporation immediately after the
transaction are Continuing Directors (in either case, 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). No person shall be considered a Control Person for purposes of clause
(i) above if (A) such person is or becomes the beneficial owner, directly or
indirectly, of more than ten percent (10%) but less than twenty-five percent
(25%) of the combined voting power of Valley's then outstanding securities if
the acquisition of all voting securities in excess of ten
percent (10%) was approved in advance by a majority of the Continuing Directors
then in office or (B) such person acquires in excess of ten percent (10%) of the
combined voting power of Valley's then outstanding voting securities in
violation of law and by order of a court of competent jurisdiction, settlement
or otherwise, disposes or is required to dispose of all securities acquired in
violation of law.
d. Continuously Employed. "Continuously employed", as used in
---------------------
Section 9, means continuously employed by the Bank but excludes any period of
employment by a bank or financial institution acquired by or merged into the
Bank and excludes any period of employment by the Bank if such period is
separated from the current employment with the Bank by a break in service (other
a break in service resulting solely from illness, disability or family leave).
e. 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 first 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.
f. Exchange Act. "Exchange Act" means the Securities Exchange Act
------------
of 1934, as amended.
g. 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 written consent:
(1) The assignment to Executive of any duties inconsistent
with, or the reduction of powers or functions associated with, Executive's
position, duties, responsibilities and status with the Company immediately prior
to a Change in Control. A change in title or positions resulting merely from a
merger of the Company into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and responsibilities shall
not meet the requirements of this paragraph;
(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 or a
failure by the Company to continue Executive as a participant in such plan on at
least the same basis as Executive participated in such plan prior to the Change
in Control;
(4) The Company's transfer of Executive to another
geographic location more than 35 miles from his present office location, except
for required travel on the Company's business to an extent substantially
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 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.
h. Pro-rata Bonus Amount. "Pro-rata Bonus Amount", as used in
---------------------
Section 9, means an amount equal to a "portion" of the highest cash bonus paid
to the Executive in the three calendar years immediately prior to the Change in
Control. The "portion" of such cash bonus shall be a fraction, the numerator of
which is the number of calendar months or part thereof which the
Executive has worked in the calendar year in which the termination occurs and
the denominator of which is 12.
i. 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 by the bank as a Senior Officer, 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 substantially the same title and 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 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.
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.
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 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, 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. 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), then no such change shall be deemed to be contrary to this
paragraph.
6. Termination for Cause. 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 benefits under this Agreement.
7. Disability. During the Contract Period if the Executive
----------
becomes permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months in any
12 month period, the Company may terminate the employment of the Executive. In
such event, the Executive shall not be entitled to any further benefits under
this Agreement.
8. Death Benefits. Upon the Executive's death during the Contract
--------------
Period, his estate shall not be entitled to any further benefits under this
Agreement.
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 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 the Company terminates the
Executive's employment during the Contract Period without Cause or if the
Executive Resigns for Good Reason, the Company shall, subject to section 12
hereof:
a. Within 20 business days of the termination of employment pay
the Executive a lump sum equal to: (i), if the Executive has been continuously
employed by the Bank for 6 full years or more, two (2) years of Base Salary plus
a Pro-rata Bonus Amount or (ii), if the Executive has been continuously employed
by the Bank for less than 6 full years but more than three years, then one (1)
year of Base Salary plus a Pro-rata Bonus Amount; and
b. Continue to provide the Executive with medical, dental and
life insurance
for the period equal to the equivalent lump sum payment (e.g. 1 or 2 years) as
were provided at the time of termination of his employment with the Company, at
the Company's cost. Upon expiration of benefit coverages, full COBRA benefits
(18 months) will be made available to Executive.
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 insurance
benefits due under this section, the Executive, after giving 10 days' written
notice to the Company identifying the Company's failure, shall be entitled to
recover from the Company 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.
10. Resignation Without Good Reason. The Executive shall be
-------------------------------
entitled to resign from the employment of the Company at any time during the
Contact 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.
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.
c. Survival. This section shall survive the termination of the
--------
Executive's employment hereunder and the expiration of this Agreement.
12. Certain Reduction of Payments by the Company.
--------------------------------------------
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 Company 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
Executive whether any payment or distribution by the Company to or for the
benefit of the Executive (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 Company 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 Executive pursuant to this Agreement (such payments or distributions
pursuant to this Agreement are thereinafter 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 Company 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 Company because of Section 280G of the Code, the Company
shall promptly give the Executive notice to that effect and a copy of the
detailed calculation thereof and of the Reduced Amount, and the Executive 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 Company in writing of his election within 20 business days of his
receipt of notice. If no such election is made by the Executive within such
20-day period, the Company 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 the Executive 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 Company and Executive shall be made within 20 business
days of a termination of employment of Executive. With the consent of the
Executive, the Company may suspend part or all of the lump sum payment due under
Section 9 hereof and any other payments due to the Executive hereunder until the
Certified Public Accountants finish the determination and the Executive (or the
Company, 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 Company shall pay to or distribute to or for the
benefit of Executive such amounts as are then due to Executive under this
Agreement and shall promptly pay to or distribute for the benefit of Executive
in the future such amounts as become due to Executive 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
Company which should not have been made ("Overpayment") or that additional
Agreement Payments which will have not been made by the Company 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 Company or Executive 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 Executive which
Executive shall repay to the Company together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided,
however, that no amount shall be payable by Executive to the Company in and for
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 Company to or for the benefit of the Executive
together with interest at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.
13. Term and Effect Prior to Change in Control.
------------------------------------------
a. Term. Except as otherwise provided for hereunder, 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 Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term is always 3 years) unless, prior to a Change in Control,
the Personnel and Compensation Committee 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) twenty-four months 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 effect any rights of the Company to terminate 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 and after 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.
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 received any payment hereunder, he shall not be entitled to any
payment under the Company's severance policy for officers and directors.
15. 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. 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. 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.
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/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------------- ---------------------------------
, Secretary Xxxxxx X. Xxxxxx, Chairman
and Chief Executive Officer
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------------- ---------------------------------
, Secretary Xxxxxx X. Xxxxxx, Chairman
and Chief Executive Officer
WITNESS:
/s/ Xxxxxx Xxxxx /s/ Xxxxxx Xxxxxxxxxx
---------------------------------- ------------------------------------
Xxxxxx Xxxxxxxxxxx, Executive
September 21, 1981
------------------
"Executive"
Valley National Bank
Service Date
