EXECUTIVE DEFERRED
BONUS PLAN
UNITED NATIONAL BANK
Bridgewater, New Jersey
October 1, 1997
EXECUTIVE DEFERRED
BONUS PLAN
This Executive Deferred Bonus Plan (the "Plan"), effective as of the
1st day of October, 1997, formalizes the understanding by and between UNITED
NATIONAL BANK (the "Bank"), a national banking association having its principal
place of business in New Jersey, and certain eligible Executives, hereinafter
referred to as "Executive", who shall be approved by the Bank to participate and
who shall elect to become a party to this Executive Deferred Bonus Plan by
execution of a Executive Deferred Bonus Joinder Agreement ("Joinder Agreement")
in a form provided by the Bank. UNITED NATIONAL BANCORP (the "Holding Company")
is a party to this Plan for the sole purpose of guaranteeing the Bank's
performance hereunder.
W I T N E S S E T H :
WHEREAS, the Executives are employed by the Bank; and
WHEREAS, the Bank recognizes the valuable services heretofore performed
for it by such Executives and wishes to encourage continued employment of each;
and
WHEREAS, the Executives wish to be assured that they will be entitled
to a certain amount of additional compensation for some definite period of time
from and after retirement from active employment with the Bank or other
termination of employment and wish to provide their beneficiaries with benefits
from and after death; and
WHEREAS, the Bank and the Executives wish to provide the terms and
conditions upon which the Bank shall pay such additional compensation to the
Executives after retirement or other termination of employment and/or death
benefits to their beneficiaries after death; and
WHEREAS, these Executives wish to defer a certain portion of their
bonus compensation to be earned in the future; and
1
WHEREAS, the Bank and the Executives intend this Plan to be considered
an unfunded arrangement, maintained primarily to provide retirement income for
such Executives, members of a select group of management or highly compensated
employees of the Bank, for tax purposes and for purposes of the Employee
Retirement Income Security Act of 1974, as amended; and
WHEREAS, the Bank has adopted this Executive Deferred Bonus Plan which
controls all issues relating to the Deferred Bonus Benefits as described herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree to the following terms and conditions:
SECTION I
DEFINITIONS
When used herein, the following words and phrases shall have the
meanings below unless the context clearly indicates otherwise:
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.2 "Bank" means UNITED NATIONAL BANK and any successor thereto.
1.3 "Beneficiary" means the person or persons (and their heirs) designated
as Beneficiary in the Executive's Joinder Agreement to whom the
deceased Executive's benefits are payable. If no Beneficiary is so
designated, then the Executive's Spouse, if living, will be deemed the
Beneficiary. If the Executive's Spouse is not living, then the Children
of the Executive will be deemed the Beneficiaries and will take on a
per stirpes basis. If there are no Children, then the Estate of the
Executive will be deemed the Beneficiary.
2
1.4 "Benefit Age" shall be the birthday on which the Executive becomes
eligible to receive benefits under the Plan. Such birthday shall be
designated in the Executive's Joinder Agreement.
1.5 "Benefit Eligibility Date" shall be the date on which a Executive is
entitled to receive his Deferred Bonus Benefit. It shall be the first
day of the month following the month in which the Executive attains the
Benefit Age designated in his Joinder Agreement.
1.6 "Cause" shall mean willful misconduct, breach of fiduciary duty
involving personal benefit to the Executive, conviction of a felony,
wilful breach or willful neglect by the Executive of his duties as an
Executive of the Holding Company or the Bank, or persistent negligence
or misconduct in the performance of such duties. For purposes of this
definition, no act or failure to act on the part of the Executive shall
be considered "willful" unless done or omitted not in good faith and
without reasonable belief that the action or omission was in the best
interest of the Holding Company or the Bank. If the termination for
Cause occurs after a Change in Control, the Executive shall not be
deemed to have been terminated for Cause hereunder unless and until:
(i) there shall have been delivered to the Executive a copy of a
certification by a majority of the non-officer members of the Board of
Directors of the Bank finding that, in the good faith opinion of such
majority, the Executive was guilty of conduct which was deemed to be
Cause for termination and specifying the particulars thereof in detail,
and (ii) after reasonable notice to the Executive there shall have been
an opportunity for the Executive, together with counsel to the
Executive, to be heard before such non-officer members of the Board of
Directors.
1.7 "Change in Control" of the Holding Company or the Bank shall mean the
first to occur of any of the following events:
(a) Any person or entity or group of affiliate persons or entities
(other than the Holding Company) becomes a beneficial owner,
directly or indirectly, of 25% or more
3
Holding Company's and/or the Bank's voting securities or all or
substantially all of the assets of Holding Company and/or the
Bank.
(b) Holding Company and/or the Bank enters into a definitive
agreement which contemplates the merger, consolidation or
combination of either Holding Company or the Bank with an
unaffiliated entity in which either or both of the following is
to occur: (i) the directors of Holding Company and/or Bank, as
applicable, immediately prior to such merger, consolidation or
combination will constitute less than a majority of the board of
directors of the surviving, new or combined entity; or (ii) less
than 75% of the outstanding voting securities of the surviving,
new or combined entity will be beneficially owned by the
stockholders of Holding Company immediately prior to such merger,
consolidation or combination; provided, however, that if any
definitive agreement to merge, consolidate or combine is
terminated without consummation of the transaction, then no
Change in Control shall be deemed to have occurred pursuant to
this paragraph (b).
(c) Holding Company and/or the Bank enters into a definitive
agreement which contemplates the transfer of all or substantially
all of Holding Company's and/or the Bank's assets, other than to
a wholly-owned subsidiary of Holding Company; provided, however,
that if any definitive agreement to transfer assets is terminated
without consummation of the transfer, then no Change in Control
shall be deemed to have occurred pursuant to this paragraph (c).
(d) A majority of the members of the Board of Directors of either
Holding Company or the Bank shall be persons who: (i) were not
members of such Board on the date hereof ("current members"); and
(ii) were not nominated by a vote of the Board which included the
affirmative vote of a majority of the current members on the
Board at the time of their nomination ("future designees") and
(iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and
future designees, taken as a group, on the Board at the time of
their nomination.
4
1.8 "Children" means the Executive's children, or any issue of any deceased
children, both natural and adopted, determined at the time payments are
due the Children under this Plan.
1.9 "Deferral Period" means the period of months designated in the
Executive's Joinder Agreement during which the Executive shall be
entitled to defer bonus compensation. The Deferral Period shall
commence on the date designated in the Executive's Joinder Agreement.
1.10 "Deferred Bonus Benefit" means the annuitized value (using the Interest
Factor) of the Executive's Elective Bonus Contribution Account,
measured as of the Executive's Benefit Age, payable in monthly
installments throughout the Payout Period and commencing on the
Executive's Benefit Eligibility Date.
1.11 "Disability Benefit" means the monthly benefit payable to the Executive
following a determination, in accordance with Subsection 5.2, that he
is no longer able, properly and satisfactorily, to perform his duties
as a Executive.
1.12 "Effective Date" of this Plan is October 1, 1997.
1.13 "Elective Bonus Contribution" shall refer to any bookkeeping entry
required to record an Executive's annual pre-tax deferral of up to One
Hundred Percent (100%) of his bonus compensation which shall be made in
accordance with the Executive's Joinder Agreement.
1.14 "Elective Bonus Contribution Account" shall be represented by the
bookkeeping entries required to record a Executive's Elective Bonus
Contributions plus accrued interest, equal to the Interest Factor,
earned to date on such amounts. However, neither the existence of such
bookkeeping entries nor the Elective Bonus Contribution Account itself
shall be deemed to create either a trust of any kind, or a fiduciary
relationship between the Bank and the Executive or any Beneficiary.
Amounts credited to the Elective Bonus
5
Contribution Account with respect to a Executive shall include the
total fair market value of all accruals on behalf of such Executive
prior to the adoption of this restated Plan and amounts accrued
hereunder.
1.15 "Estate" means the estate of the Executive.
1.16 "Financial Hardship" means an unforeseeable emergency resulting from a
sudden and unexpected illness or accident of the Executive or of a
dependent of the Executive, loss of the Executive's property due to
casualty, or other similar extraordinary and unforeseeable
circumstances which arise as a result of an event not within the
control of the Executive. The circumstances that shall constitute an
unforeseeable emergency will depend upon the facts of each case, but,
in any instance, payment may not be made to the extent that such
hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of the
Executive's assets to the extent such liquidation would not itself
cause severe financial hardship, or (iii) by cessation of deferrals
under the Plan. Examples of what are not considered to be unforeseeable
emergencies include the need to send the Executive's child to college
or the decision to purchase a home.
1.17 "Financial Hardship Benefit" means a withdrawal or withdrawals of an
amount or amounts attributable to a Financial Hardship and limited to
the extent reasonably needed to satisfy the emergency need.
1.18 "Interest Factor" means monthly compounding or discounting, as
applicable, at a rate determined annually in accordance with the
following: the Interest Factor shall be equal to the greater of (i)
eight percent (8%) or (ii) the annual rate of return on equity for the
Bank for the immediately preceding year minus five percent (5%),
provided, however, that "(ii)" shall only be applicable if the Bank's
equity to asset ratio is eight percent (8%) or greater.
6
1.19 "Maximum Elective Bonus Contribution" means the total amount of bonus
compensation that the Executive shall be allowed to defer during his
Deferral Period, as designated in his Joinder Agreement.
1.20 "Payout Period" means the time frame during which certain benefits
payable hereunder shall be distributed. Payments shall be made in equal
monthly installments commencing on the first day of the month following
the occurrence of the event which triggers distribution and continuing
for a period of months, as designated in the Executive's Joinder
Agreement.
1.21 "Plan Year" shall mean the twelve (12) month period from January 1 to
December 31 of each year.
1.22 "Projected Deferral" is an estimate, determined upon execution of a
Joinder Agreement, of the total amount of bonus compensation to be
deferred by the Executive during his Deferral Period (excluding any
interest accrued on such deferrals), and so designated in the
Executive's Joinder Agreement.
1.23 "Spouse" means the individual to whom the Executive is legally married
at the time of the Executive's death.
1.24 "Survivor's Benefit" means a stream of monthly installments payable to
the Beneficiary throughout the Payout Period. In the event a policy of
life insurance has been purchased by the Plan on the Executive's life,
the Survivor's Benefit is equal to the amount designated in the Joinder
Agreement, and subject to Subsection 6.1. In the event no life
insurance policy has been purchased by the Plan on the Executive's
life, the Survivor's Benefit shall equal the annuitized value (using
the Interest Factor) of the Executive's Elective Bonus Contribution
Account, payable over the Payout Period.
7
1.25 "Tier One Executives" means those Executives who are eligible to
participate herein and who are designated as Tier One Executives by the
Bank's Board of Directors. Exhibit C attached hereto sets forth those
persons who have been designated as Tier One Executives.
SECTION II
ESTABLISHMENT OF RABBI TRUST
The Bank shall establish a rabbi trust into which the Bank shall
contribute assets which shall be held therein, pursuant to the agreement which
establishes such rabbi trust. The contributed assets shall be subject to the
claims of the Bank's creditors in the event of the Bank's "Insolvency" as
defined in the agreement which establishes such rabbi trust, until the
contributed assets are paid to the Executive and his Beneficiary(ies) in such
manner and at such times as specified in this Plan. It is the intention of the
Bank to make a contribution or contributions to the rabbi trust to provide the
Bank with a source of funds to assist it in meeting the liabilities of this
Plan. The rabbi trust and any assets held therein shall conform to the terms of
the rabbi trust agreement which has been established in conjunction with this
Plan. Any contribution(s) to the rabbi trust shall be made in accordance with
the rabbi trust agreement. The amount and timing of such contribution(s) shall
be specified in the agreement which establishes such rabbi trust.
SECTION III
DEFERRED COMPENSATION
Commencing on the execution date of the Executive's Joinder Agreement
and continuing through the end of the Deferral Period, the Executive and the
Bank agree that the Executive shall be entitled to defer into his Elective Bonus
Contribution Account up to Twenty-Five Percent (25%) of the Executive's bonus
compensation which the Executive would otherwise be entitled to receive from the
Bank in each Plan Year during the Deferral Period. The specific amount of bonus
compensation which the Executive elects to defer annually shall be designated in
the Executive's Joinder Agreement.
8
In addition, a Tier One Executive shall be entitled to defer into his
Elective Bonus Contribution Account up to an additional amount of the Tier One
Executive's bonus compensation which the Tier One Executive would otherwise be
entitled to receive from the Bank in each Plan Year during the Deferral Period,
so long as the average bonus deferral percentage for all Executives (not just
Tier One Executives) entitled to make bonus deferrals under the Plan shall not
exceed the dollar amount determined by multiplying Twenty-Five Percent (25%) by
the sum of the bonus compensation for all Executives entitled to participate
hereunder (such dollar amount shall be referred to as the "Bonus Deferral Pool
Limit.")
If prior to the beginning of any Plan Year the total of the Projected
Deferrals of all Executives for such year is less than the total dollar amount
of the Bonus Deferral Pool Limit, the Tier One Executives, on a pro-rata basis,
will be given an opportunity to defer an additional amount, up to the Bonus
Deferral Pool Limit. After all Tier One Executives have been given such
opportunity, if the total Projected Deferrals is less than the dollar amount of
the Bonus Deferral Pool Limit, the Tier One Executives shall be given another
opportunity to increase their Projected Deferrals, on a pro-rata basis up to the
Bonus Deferral Pool Limit, and so on, until (i) all Tier One Executives have
deferred the maximum amount they wish to defer, or (ii) the total Projected
Deferrals equals (but does not exceed) the Bonus Deferral Pool Limit; provided
however, that all increases in an Executive's Projected Deferral must be made
prior to January 1 of the Plan Year for which such Projected Deferral is
effective.
SECTION IV
ADJUSTMENT OF DEFERRAL AMOUNT
Deferral of the specific amount of bonus compensation designated in the
Executive's Joinder Agreement shall continue in effect pursuant to the terms of
this Plan unless and until the Executive amends his Joinder Agreement by filing
with the Administrator a Notice of Adjustment of Deferral Amount (Exhibit B of
the Joinder Agreement). A Notice of Adjustment of Deferral Amount shall be
effective if filed with the Administrator no later than December 31st
9
during the Executive's Deferral Period. Such Notice of Adjustment of Deferral
Amount shall be effective January 1st following its filing and shall be
applicable only to bonus compensation not yet awarded to the Executive.
SECTION V
BENEFITS GENERALLY
5.1 Retirement Benefit. Subject to Subsection 6.1 of this Plan, the Bank
agrees to pay the Executive the Deferred Bonus Benefit commencing on
the Executive's Benefit Eligibility Date. Such payments will be made
over the term of the Payout Period. In the event of the Executive's
death after commencement of the Deferred Bonus Benefit, but prior to
completion of all such payments due and owing hereunder, the Bank shall
pay to the Executive's Beneficiary a continuation of the monthly
installments for the number of months remaining in the Payout Period.
5.2 Disability Benefit. If requested by the Executive and approved by the
Board of Directors, the Executive shall be entitled to receive the
Disability Benefit hereunder, in any case in which it is determined by
a duly licensed independent physician selected by the Bank, that the
Executive is no longer able, properly and satisfactorily, to perform
his regular duties as an Executive because of ill health, accident,
disability or general inability due to age. If the Executive's
employment is terminated pursuant to this Subsection and Board of
Director approval is obtained, the Executive may elect to begin
receiving the Disability Benefit in lieu of the Deferred Bonus Benefit,
which is not available prior to the Executive's Benefit Eligibility
Date. The benefit shall begin within thirty (30) days of Board of
Director approval of such benefit. The amount of the monthly benefit
shall be the annuitized value of the Executive's Elective Bonus
Contribution Account, measured as of the date of the disability
determination and payable over the Payout Period. The Interest Factor
shall be used to annuitize the Elective Bonus Contribution Account. In
the event the Executive dies while receiving Disability Benefit
payments pursuant to this
10
Subsection, or after becoming eligible for such payments but before the
actual commencement of such payments, his Beneficiary shall be entitled
to receive those benefits provided for in Subsection 6.1(a) and the
Disability Benefits provided for in this Subsection shall terminate
upon the Executive's death.
5.3 Removal For Cause. In the event the Executive is removed for Cause at
any time prior to reaching his Benefit Age, he shall be entitled to
receive the balance of his Elective Bonus Contribution Account,
measured as of the date of removal. Such amount shall be paid in a lump
sum within thirty (30) days of the Executive's date of removal. All
other benefits provided for the Executive or his Beneficiary under this
Plan shall be forfeited and the Plan shall become null and void with
respect to such Executive.
5.4 Voluntary or Involuntary Termination Other Than for Cause. If the
Executive's employment with the Bank is voluntarily or involuntarily
terminated prior to the attainment of his Benefit Eligibility Date, for
any reason including a Change in Control, but excluding termination for
Cause, the Executive's death or disability, then commencing on his
Benefit Eligibility Date, the Executive shall be entitled to the
annuitized value (using the Interest Factor) of his Elective Bonus
Contribution Account calculated as of his Benefit Eligibility Date, and
payable over the Payout Period. During the period between termination
of employment and the Executive's Benefits Eligibility Date, the
Executive's Elective Contribution Account will continue to earn
interest at a rate equal to he Interest Factor.
5.5 Financial Hardship Benefit. In the event the Executive incurs a
Financial Hardship, the Executive may request a Financial Hardship
Benefit. Such request shall be either approved or rejected by the Bank
in the exercise of its sole discretion. The Executive will be required
to demonstrate to the satisfaction of the Bank that a Financial
Hardship has occurred and that the Executive is otherwise entitled to a
Financial Hardship Benefit in accordance with Sections 1.16 and 1.17.
If a Financial Hardship Benefit is approved, it shall be paid in a
11
lump sum within thirty (30) days of the event which triggers payment
and only to the extent of the Executive's account balances when paid.
Any Deferred Compensation Benefit or Disability Benefit shall be
actuarially adjusted to reflect such distribution.
SECTION VI
DEATH BENEFITS
6.1 Death Benefit Prior to Commencement of Deferred Bonus Benefit. In the
event of the Executive's death prior to commencement of the Deferred
Bonus Benefit, the Bank shall pay the Executive's Beneficiary a monthly
benefit for the Payout Period, commencing within thirty (30) days of
the Executive's death. The amount of such monthly benefit payments
shall be determined as follows:
(a) (1) In the event death occurs (i) while the Executive is
receiving the Disability Benefit provided for in Subsection 5.2,
or (ii) after the Executive has become eligible for such
Disability Benefit payments but before such payments have
commenced, the Executive's Beneficiary shall be entitled to
receive a lump sum benefit equal to the present value of the
Survivor's Benefit, reduced by the Disability Benefit payments
made to the Executive. In the event death occurs after the
Executive has received the Disability Benefit provided for in
Subsection 5.2 for the entire Payout Period, the Executive's
Beneficiary shall not be entitled to the Survivor's Benefit for
any length of time. However, the lump sum payment described in
paragraph two (2) of this Subsection 6.1(a) shall still be
applicable to such Beneficiary.
(2)If (i) the total dollar amount of Disability Benefit payments
received by the Executive under Subsection 5.2 is less than the
total dollar amount of payments which would have been received
had the Survivor's Benefit been paid in lieu of the Disability
Benefit which was paid during the Executive's life, and (ii)
Board of
12
Director approval is obtained, the Bank shall pay the
Executive's Beneficiary a lump sum payment for the difference.
This lump sum payment shall be made within thirty (30) days of
the Executive's death.
(b) In the event death occurs while the Executive is (i) in the
service of the Bank, (ii) deferring bonus compensation
pursuant to Section III and (iii) prior to any reduction or
discontinuance (via an effective filing of a Notice of
Adjustment of Deferral Amount) in the level of deferrals
reflected in the Executive's Joinder Agreement, the
Executive's Beneficiary shall be paid the Survivor's Benefit.
(c) In the event death occurs while the Executive is (i) in the
service of the Bank, (ii)deferring bonus compensation pursuant
to Section III, and (iii) after any reduction
or discontinuance (via an effective filing of a Notice of
Adjustment of Deferral Amount) in the level of deferrals
reflected in the Executive's initial Joinder Agreement, the
Executive's Beneficiary shall be paid a reduced Survivor's
Benefit. The amount of such reduced Survivor's Benefit shall
be determined by multiplying the monthly payment available as
a Survivor's Benefit by a fraction, the numerator of which is
equal to the total amount of bonus compensation actually
deferred by the Executive as of his death, and the denominator
of which is equal to the total amount of bonus compensation
which would have been deferred as of his death, if
no reduction or discontinuance in the level of deferrals had
occurred at any time following execution of the Joinder
Agreement and during the Deferral Period.
(d) In the event the Executive completes less than One Hundred
Percent (100%) of his Projected Deferrals due to any voluntary
or involuntary termination of employment other than
termination for Cause, the Executive's Beneficiary shall be
paid a reduced Survivor's Benefit. The amount of such reduced
Survivor's Benefit shall be determined by multiplying the
monthly payment available as a Survivor's Benefit by a
fraction, the numerator of which is equal to the total amount
of bonus
13
compensation actually deferred by the Executive, and the
denominator of which is equal to the Executive's Projected
Deferral.
(e) In the event the Executive completes One Hundred Percent
(100%) of his Projected Deferrals prior to any voluntary or
involuntary termination other than removal for Cause, and
provided no payments have been made pursuant to Subsection
5.2, the Executive's Beneficiary shall be paid the
Survivor's Benefit.
6.2 Additional Death Benefit - Burial Expense. In addition to the
above-described death benefits, upon the Executive's death, the
Executive's Beneficiary shall be entitled to receive a one-time lump
sum death benefit in the amount of Ten Thousand Dollars ($10,000.00).
This benefit shall be provided specifically for the purpose of
providing payment for burial and/or funeral expenses of the Executive.
Such benefit shall be payable within thirty (30) days of the
Executive's death. The Executive's Beneficiary shall not be entitled to
such benefit if the Executive is removed for Cause prior to death.
Notwithstanding anything in this Section 6.2 to the contrary, if the
Executive is also a participant in an Executive Supplemental Retirement
Income Agreement or in the Executive Deferred Bonus Plan under which an
additional $10,000 death benefit for burial expenses is being paid, no
such death benefit shall be paid hereunder.
SECTION VII
BENEFICIARY DESIGNATION
The Executive shall make an initial designation of primary and
secondary Beneficiaries upon execution of his Joinder Agreement and shall have
the right to change such designation, at any subsequent time, by submitting to
the Administrator in substantially the form attached as Exhibit A to the Joinder
Agreement, a written designation of primary and secondary Beneficiaries. Any
Beneficiary designation made subsequent to execution of the Joinder Agreement
shall become effective only when receipt thereof is acknowledged in writing by
the Administrator.
14
SECTION VIII
EXECUTIVE'S RIGHT TO ASSETS
The rights of the Executive, any Beneficiary, or any other person
claiming through the Executive under this Plan, shall be solely those of an
unsecured general creditor of the Bank. The Executive, the Beneficiary, or any
other person claiming through the Executive, shall only have the right to
receive from the Bank those payments so specified under this Plan. The Executive
agrees that he, his Beneficiary, or any other person claiming through him shall
have no rights or interests whatsoever in any asset of the Bank, including any
insurance policies or contracts which the Bank may possess or obtain to
informally fund this Plan. Any asset used or acquired by the Bank in connection
with the liabilities it has assumed under this Plan, unless expressly provided
herein, shall not be deemed to be held under any trust for the benefit of the
Executive or his Beneficiaries, nor shall any asset be considered security for
the performance of the obligations of the Bank. Any such asset shall be and
remain, a general, unpledged, and unrestricted asset of the Bank.
SECTION IX
RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any
fund or money with which to pay its obligations under this Plan. The Executive,
his Beneficiaries or any successor in interest to him shall be and remain simply
a general unsecured creditor of the Bank in the same manner as any other
creditor having a general claim for matured and unpaid compensation. The Bank
reserves the absolute right in its sole discretion to either purchase assets to
meet its obligations undertaken by this Plan or to refrain from the same and to
determine the extent, nature, and method of any such asset purchases. Should the
Bank decide to purchase assets such as life insurance, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such assets at any time, in whole or in part. At no
time shall the Executive be deemed to have any lien, right, title or interest in
or to any specific investment or
15
to any assets of the Bank. If the Bank elects to invest in a life insurance,
disability or annuity policy upon the life of the Executive, then the Executive
shall assist the Bank by freely submitting to a physical examination and by
supplying such additional information necessary to obtain such insurance or
annuities.
SECTION X
ALIENABILITY AND ASSIGNMENT PROHIBITION
Neither the Executive nor any Beneficiary under this Plan shall have
any power or right to transfer, assign, anticipate, hypothecate, mortgage,
commute, modify or otherwise encumber in advance any of the benefits payable
hereunder, nor shall any of said benefits be subject to seizure for the payment
of any debts, judgments, alimony or separate maintenance owed by the Executive
or his Beneficiary, nor be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Executive or any
Beneficiary attempts assignment, communication, hypothecation, transfer or
disposal of the benefits hereunder, the Bank's liabilities shall forthwith cease
and terminate, with respect to such Executive or Beneficiary.
SECTION XI
ACT PROVISIONS
11.1 Named Fiduciary and Administrator. The Bank shall be the Named
Fiduciary and Administrator (the "Administrator") of this Plan. As
Administrator, the Bank shall be responsible for the management,
control and administration of the Plan as established herein. The
Administrator may delegate to others certain aspects of the management
and operational responsibilities of the Plan, including the employment
of advisors and the delegation of ministerial duties to qualified
individuals.
11.2 Claims Procedure and Arbitration. In the event that benefits under this
Plan are not paid to the Executive (or to his Beneficiary in the case
of the Executive's death) and such
16
claimants feel they are entitled to receive such benefits, then a
written claim must be made to the Administrator within sixty (60) days
from the date payments are refused. The Administrator shall review the
written claim and, if the claim is denied, in whole or in part, they
shall provide in writing, within ninety (90) days of receipt of such
claim, their specific reasons for such denial, reference to the
provisions of this Plan or the Joinder Agreement upon which the denial
is based, and any additional material or information necessary to
perfect the claim. Such writing by the Administrator shall further
indicate the additional steps which must be undertaken by claimants if
an additional review of the claim denial is desired.
If claimants desire a second review, they shall notify the
Administrator in writing within sixty (60) days of the first claim
denial. Claimants may review this Plan, the Joinder Agreement or any
documents relating thereto and submit any issues and comments, in
writing, they may feel appropriate. In its sole discretion, the
Administrator shall then review the second claim and provide a written
decision within sixty (60) days of receipt of such claim. This decision
shall state the specific reasons for the decision and shall include
reference to specific provisions of this Plan or the Joinder Agreement
upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Plan and the Joinder Agreement or the
meaning and effect of the terms and conditions thereof, then claimants
may submit the dispute to mediation, administered by the American
Arbitration Association ("AAA") (or a mediator selected by the parties)
in accordance with the AAA's Commercial Mediation Rules. If mediation
is not successful in resolving the dispute, it shall be settled by
arbitration administered by the AAA under its Commercial Arbitration
Rules, and judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
17
SECTION XII
MISCELLANEOUS
12.1 No Effect on Employment Rights. Nothing contained herein will confer
upon the Executive the right to be retained in the employment of the
Bank nor limit the right of the Bank to discharge or otherwise deal
with the Executive without regard to the existence of the Plan.
12.2 State Law. The Plan is established under, and will be construed
according to, the laws of the state of New Jersey.
12.3 Severability. In the event that any of the provisions of this Plan or
portion thereof, are held to be inoperative or invalid by any court of
competent jurisdiction, then: (1) insofar as is reasonable, effect will
be given to the intent manifested in the provisions held invalid or
inoperative, and (2) the validity and enforceability of the remaining
provisions will not be affected thereby.
12.4 Incapacity of Recipient. In the event the Executive is declared
incompetent and a conservator or other person legally charged with the
care of his person or Estate is appointed, any benefits under the Plan
to which such Executive is entitled shall be paid to such conservator
or other person legally charged with the care of his person or Estate.
12.5 Unclaimed Benefit. The Executive shall keep the Bank informed of his
current address and the current address of his Beneficiaries. If the
location of the Executive is not made known to the Bank within three
(3) years after the date on which any payment of the Deferred Bonus
Benefit may first be made, payment may be made as though the Executive
had died at the end of the three (3) year period.
18
12.6 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, no individual acting as an employee or agent of
the Bank, or as a member of the Board of Executives shall be personally
liable to the Executive or any other person for any claim, loss,
liability or expense incurred in connection with this Plan.
12.7 Gender. Whenever in this Plan words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine
or neuter gender, whenever they should so apply.
12.8 Effect on Other Corporate Benefit Plans. Nothing contained in this Plan
shall affect the right of the Executive to participate in or be covered
by any qualified or non-qualified pension, profit sharing, group, bonus
or other supplemental compensation or fringe benefit agreement
constituting a part of the Bank's existing or future compensation
structure.
12.9 Suicide. Notwithstanding anything to the contrary in this Plan, the
benefits otherwise provided herein shall not be payable if the
Executive's death results from suicide, whether sane or insane, within
twenty-six (26) months after the execution of his Joinder Agreement. If
the Executive dies during this twenty-six (26) month period due to
suicide, the balance of his Elective Bonus Contribution Account will be
paid to the Executive's Beneficiary in a single payment. Payment is to
be made within thirty (30) days after the Executive's death is declared
a suicide by competent legal authority. Credit shall be given to the
Bank for payments made prior to determination of suicide.
12.10 Inurement. This Plan shall be binding upon and shall inure to the
benefit of the Bank, its successors and assigns, and the Executive, his
successors, heirs, executors, administrators, and Beneficiaries.
12.11 Source of Payments. All payments provided in this Plan shall be timely
paid in cash or check from the general funds of the Bank or the assets
of the rabbi trust. The Holding
19
Company guarantees payment and provision of all amounts and benefits
due to the Executives and, if such amounts and benefits are not timely
paid or provided by the Bank, or a rabbi trust, such amounts and
benefits shall be paid of provided by the Holding Company.
12.12 Modification of Benefit Eligibility Date. In the event that a Executive
desires to modify his Benefit Eligibility Date or Payout Period with
respect to future Elective Bonus Contributions, the Executive may do so
at the time and in the manner that the Executive is entitled to adjust
his Elective Bonus Contribution, pursuant to Section IV of the Plan. In
the event that a Executive desires to modify his Benefit Eligibility
Date or Payout Period with respect to amounts accrued in his Elective
Bonus Contribution Account the Executive may do so, provided, however,
that any such modification is made no later than twenty-four (24)
months prior to the date of both (i) the Executive's existing Benefit
Eligibility (at the time of such modification) and (ii) the Executive's
Benefit Eligibility Date, as modified.
12.13 Tax Withholding. The Bank may withhold from any benefits payable under
this Plan all federal, state, city, or other taxes as shall be required
pursuant to any law or governmental regulation then in effect.
12.14 Headings. Headings and sub-headings in this Plan are inserted for
reference and convenience only and shall not be deemed a part of this
Plan.
SECTION XIII
AMENDMENT/REVOCATION
This Plan shall not be amended, modified or revoked at any time, in
whole or part, without the mutual written consent of the Executive and the Bank,
and such mutual consent shall be required even if the Executive is no longer
employed by the Bank.
20
SECTION XIV
EXECUTION
14.1 This Plan sets forth the entire understanding of the parties hereto
with respect to the transactions contemplated hereby, and any previous
agreements or understandings between the parties hereto regarding the
subject matter hereof are merged into and superseded by this Plan.
14.2 This Plan shall be executed in triplicate, each copy of which, when so
executed and delivered, shall be an original, but all three copies
shall together constitute one and the same instrument.
[The Remainder of Page Intentionally Left Blank]
21
IN WITNESS WHEREOF, the Bank and the Holding Compay have caused this
Plan to be executed on the day and date first above written.
ATTEST: UNITED NATIONAL BANK
By: __________________________
Secretary
Title: _____________________
ATTEST: UNITED NATIONAL BANCORP
By:
Secretary
Title:
22
EXECUTIVE DEFERRED BONUS JOINDER AGREEMENT
I, ________________, and UNITED NATIONAL BANK hereby agree for good and
valuable consideration, the value of which is hereby acknowledged, that I shall
participate in the Executive Deferred Bonus Plan ("Plan"), which is effective
October 1, 1997, as such Plan may now exist or hereafter be amended or modified,
and do further agree to the terms and conditions thereof.
I understand that I must execute this Executive Deferred Bonus Joinder
Agreement ("Joinder Agreement") as well as notify the Administrator of such
execution, on or before October 1, 1997 in order to participate in the Plan from
its Effective Date. Otherwise, I may execute this Joinder Agreement and give
notice of such execution to the Administrator at least thirty (30) days prior to
any January 1.
I hereby elect to defer $__________ (or _______%) of my annual bonus
compensation, if any. Such deferrals shall commence with respect to bonuses
declared and paid after the execution of the Joinder Agreement for Plan Year
1997, shall renew annually unless otherwise changed and shall continue for a
period of five years known as the "Deferral Period", and will result in a
"Projected Deferral" in the amount of $__________ and a "Projected Deferred
Bonus Benefit" of $__________.
My "Maximum Elective Bonus Contribution" shall be $__________. I
understand that, in accordance with Subsection l.7 of the Plan, my Maximum
Elective Bonus Contribution shall serve as the limit on the total amount of
bonus compensation that I may defer.
I understand that my election to defer shall continue in accordance
with this Joinder Agreement until such time as I submit a "Notice of Adjustment
of Deferral Amount" (Exhibit B, hereto) to the Administrator, at least thirty
(30) days prior to any January 1st of my Deferral Period. A Notice of Adjustment
of Deferral Amount can be used to adjust the amount of Board fees and/or
retainer to be deferred or to discontinue deferrals altogether.
I hereby elect a "Benefit Age" of 65 and a "Payout Period" of 180 months.
In general, I understand that my designated Beneficiary shall be
entitled to a "Survivor's Benefit" monthly payment in the amount of $__________,
pursuant to Subsection 6.1 of the Plan and subject to all relevant Subsections
of the Plan.
1
I hereby designate the following individuals as my "Beneficiary" and I
am aware that I can subsequently change such designation by submitting to the
Administrator, at any subsequent time and in substantially the form attached
hereto as Exhibit A, a written designation of the primary and secondary
Beneficiaries to whom payment under the Plan shall be made in the event of my
death prior to complete distribution of the benefits due and payable under the
Plan. I understand that any Beneficiary designation made subsequent to execution
of the Joinder Agreement shall become effective only when receipt thereof is
acknowledged in writing by the Administrator.
PRIMARY BENEFICIARY
SECONDARY BENEFICIARY
I understand that I am entitled to review or obtain a copy of the Plan,
at any time, and may do so by contacting the Administrator.
This Joinder Agreement shall become effective upon execution (below) by
both the Executive and a duly authorized officer of the Bank.
Dated this 1st day of October, 1997.
(Executive)
(Bank's duly authorized Officer)
2
Exhibit A
EXECUTIVE DEFERRED BONUS JOINDER AGREEMENT
NOTICE OF ADJUSTMENT OF DEFERRAL AMOUNT
TO: Bank
Attention:
I hereby give notice of my election to adjust the amount of my
compensation deferral in accordance with my Executive Deferred Bonus Joinder
Agreement, dated the ____ day of __________, 19__. This notice is submitted
thirty (30) days prior to January 1st, and shall become effective January 1st,
as specified below.
Xxxxxx xxxxxxxx as of: January 1st, 19__
Previous Deferral Amount ____________ per month
New Deferral Amount ____________ per month
(to discontinue deferral, enter $0)
------------------------------------
EXECUTIVE
------------------------------------
DATE
ACKNOWLEDGED
BY:_________________________________
TITLE: _____________________________
------------------------------------
DATE
Exhibit B
EXHIBIT C
EXECUTIVE DEFERRED COMPENSATION PLAN
TIER ONE EXECUTIVES
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxx, Xx.
Exhibit C
