AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment
Agreement is entered into by and between Xxxx Xxxxxxxx (hereinafter “Employee”)
and Commerce Bancorp, Inc. (and all of its affiliates and subsidiaries)
(hereinafter collectively “Commerce”), a New Jersey business corporation,
effective date of October 2, 2007.
BACKGROUND
Commerce and Employee (the “Parties”)
entered into an Employment Agreement, dated August 1, 2000. Commerce recognizes
that, as is the case with many publicly held companies, the possibility of a
change in control may exist, and that such possibility and the uncertainty and
questions which it may raise among management may result in the departure or
distraction of the Employee in the performance of the Employee’s duties, to the
detriment of Commerce and its shareholders. It is in the best
interests of Commerce and its shareholders to reinforce and encourage the
continued attention and dedication of qualified management personnel, including
Employee, to their assigned duties. The Parties have determined that
this Agreement should be entered into to address the uncertainty and amend and
restate the terms and conditions of the employment relationship;
and
The Parties agree that Commerce will
continue to employ Employee, and Employee agrees to continue his employment per
the terms and conditions in this Agreement, which shall supersede any prior
agreements between the Parties with respect to their employment
relationship.
NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained herein, and intending to be
legally bound, Commerce
and Employee
AGREE as follows:
1. Employment and Term of
Employment.
1.1.
Three-Year
Term. Commerce offers Employee employment, and Employee
accepts such employment, subject to all the terms and conditions of this
Agreement, for a term of three (3) years beginning on the effective date stated
above.
(a) “Term” means the three (3) year
employment period beginning on the effective date stated
above. However, if there is a “Change in Control’ (as defined in
Section 8.1) within the first 18 months of the Term, the Term will automatically
be extended until the three (3) year anniversary of the consummation of the
Change in Control (the “Closing
Date”). Notwithstanding the preceding, Employee’s employment
under this Agreement is subject to Commerce’s and Employee’s right to terminate
such employment by delivering written notice of termination to the other party
at least thirty (30) days prior to the date of termination of
employment.
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(b) Expiration. This
Agreement expires three (3) years after the effective date stated above, or, if
applicable, on the third anniversary of the Closing Date.
2. Services and
Duties.
2.1 Duties. Commerce
agrees to employ Employee during the Term as President – Regional
Banking. Employee agrees to accept such employment, and to devote
substantially all of his full business time and efforts to the business and
affairs of Commerce and to use his reasonable best efforts to promote the
interests of Commerce (exclusive of spending his own money to promote the
business interests of Commerce). Employee shall have such executive
responsibilities, duties and authorities as may from time to time be assigned to
him by the Commerce Board of Directors (the “Commerce Board”) and/or Office of
the Chairman, consistent with his position as President – Regional Banking of
Commerce. Employee agrees that during his employment hereunder he
will not be employed by, participate or engage in, or be a part of, in any
manner directly or indirectly, the affairs of any other business enterprise,
venture or occupation related to Commerce’s banking, insurance and financial
services business without Commerce’s express prior written consent, which
consent shall not be unreasonably withheld, delayed or
conditioned. Employee shall serve, without additional compensation,
as a director and/or committee member of Commerce if so appointed or
elected. During the term, Employee shall be governed by and be
subject to all Commerce rules and regulations whether written or oral which are
applicable to employees in general.
3. Compensation.
3.1 Base Salary. By
entering into this Agreement, Commerce is hereby agreeing to pay and provide
Employee with a vested “base salary” at the rate of not less than $600,000.00
per year during each of the three years of the Term of
this Agreement, unless Employee (i) resigns from Commerce Voluntarily
(as defined in Section 5), (ii) is terminated by Commerce for Cause (as defined
in Section 5), or (iii) dies while employed hereunder, in which cases (and in
only such cases) the base salary payments to Employee will cease as of such
date. Base salary shall be payable at regular intervals in accordance with
Commerce’s normal payroll practices.
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(a) Adjustment. Employee’s
base salary is subject to an annual review and subject to such upward
adjustments as may be deemed appropriate by a Commerce Board-designated
Committee or other Commerce Board designee. There is no obligation to
recommend an increase or to increase base salary; but, base salary once
increased may not be decreased.
3.2 Bonus. Employee
shall be eligible to receive a target bonus in the amount of $150,000.00 for
each year of the Term, based on the achievement of objective and reasonable
performance metrics with respect to both corporate and personal
performance. With respect to the 2007 year, the annual cash bonus and
the number of stock options that Employee shall receive in the first quarter of
2008 for such 2007 year shall not be less than the aggregate cash bonus
compensation and the number of stock options that Employee received in the first
quarter of 2007 with respect to the 2006 year.
3.3 Expenses. During
the period that Employee is employed during the Term, Commerce will reimburse
Employee for all expenses incurred by him that Commerce determines to be
reasonable and necessary for him to carry out his duties under this
Agreement. This reimbursement will be in accord with Commerce’s
normal reimbursement practices in effect now or in the future.
3.4 SERP. It is agreed
and acknowledged that Employee is currently a participant in Commerce's
Supplemental Executive Retirement Plan ("SERP") and will continue to be eligible
for discretionary company contributions and continue to be credited with
earnings credits in accordance with the terms and conditions of the
SERP. As of June 30, 2007, Employee had a vested account balance of
$41,604.00 with an additional earnings credit of $1,040.00 scheduled to be
credited to Employee's account for the six-month period beginning on July 1,
2007 and ending on December 31, 2007. Under the terms of the SERP, payment
of Employee's accrued benefit will begin on Employee's "benefit
commencement date," generally the 90th day following Employee's
termination of employment (other than a termination for "good cause" as defined
in the SERP). Such accrued benefit will be paid in five annual
installments on Employee’s benefit commencement date, unless another
distribution election is made in accordance with the terms of the SERP
consistent with Section 409A of the Code.
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4. Plans and Fringe
Benefits.
4.1 Plans and
Programs. During the period that Employee is employed during
the Term, Employee shall be entitled to participate in any bonus programs,
incentive compensation plans, stock option plans, stock purchase plans, 401(k)
or similar retirement plans, or similar benefit or compensation programs in
effect now or in the future that are generally made available to salaried
officers of Commerce.
4.2 Fringe
Benefits. During the period that Employee is employed during
the Term, Employee shall also be entitled to:
(a) Generally Available
Benefits. Participate in all fringe benefits as then in effect
that are generally available to Commerce’s salaried officers including, without
limitation, personal or family medical, dental and hospitalization coverage;
personal life insurance coverage and disability coverage; Paid Time Off for
holidays and vacations annualized days.
(b) Car
Allowance. Employee shall be entitled to use of a car or
receipt of a car allowance in accordance with Commerce policy.
(c) Country Club
Membership. During the Term of his employment,
Employee may be entitled to a “country club membership” in the organization of
his choice, and may be reimbursed for all reasonable and necessary expenses
associated with such membership, including all membership fees and dues in
accordance with Commerce policy.
(d) Other
Benefits. Such other fringe benefits shall be deemed
appropriate by Commerce or a Commerce Board Committee.
4.3 Insurance
and Death Benefits.
(a) Death. If Employee
dies during the Term while employed under this Agreement, then his employment
and his rights to base salary under Section 3.1 of this Agreement shall
automatically terminate at the close of the calendar week in which death
occurs. Commerce shall pay to such person as Employee shall designate
in a notice filed with Commerce or, if no such person shall be designated, to
Employee’s estate, as a lump sum death benefit, an amount equal to three times
Employee’s annual base
salary in effect at date of death in addition to his full accrued but
unpaid base salary to the date of termination and any other compensation due him
(including but not limited to any remaining unpaid portion of the Change in
Control Payment). The foregoing death benefit shall be in addition to
any amount payable under any group life insurance program maintained by Commerce
for salaried officers of Commerce.
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(b) Insurance. In the event of
Employee’s disability as determined by Commerce in accordance with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), termination or
resignation, all during the Term (unless Employee terminates for Cause or
resigns Voluntarily), Employee shall, to the fullest extent permitted by law, be
entitled to participate, without cost to the Employee, in all Commerce medical,
disability, and hospitalization benefits for a period of three years after such
termination.
4.4 Stock
Options. On any termination of Employee’s employment for
any reason after a Change in Control, all of Employee stock options shall remain
outstanding and exercisable for a two (2) year period following termination of
employment for any reason (unless Employee terminates for Cause or resigns
Voluntarily).
5. Definitions
For
purposes of this Agreement, the following terms have the following
meanings:
The term
“Cause” shall be deemed
to mean the following:
(a) If
at any time during the Term, Employee commits fraud, material dishonesty or
material theft against Commerce and/or any of its affiliates or subsidiaries, or
is convicted of or enters a plea of guilty or nolo contendere to a felony (or a
crime classified under New Jersey law of the first, second or third degree) or
crime of falsehood or dishonesty or a crime involving moral turpitude, or his
license or licenses related to his employment are revoked, lost, suspended or
similarly affected; or
(b)
If at any time during the Term, Employee willfully violates any of the material
terms of this Agreement, including, without limitation, willful failure to
materially perform his duties hereunder (for reasons other than incapacity due
to illness or disability), or Employee’s engaging in conduct materially harmful
to Commerce’s business and operations, provided that, where curable, Employee
has been provided written notice of the conduct at issue and period of thirty
(30) days to cure or correct such conduct; or
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(c) If
at any time during the Term, Employee engages in conduct, determined by the
Board as being detrimental to Commerce’s business and operations, which
determination is made based upon substantial evidence (that is, based upon
information which would support the Board’s reasonable belief that the conduct
at issue has occurred and such conduct has been the cause of the harm which the
Board has identified).
The term
“Voluntarily” when used
with respect to a termination by Employee shall not include any termination by
Employee (i) by reason of his death, (ii) by reason of his “disability” as
determined by Commerce in accordance with Section 409A of the Code, and (iii) if
both (x) a “Change in Control” of Commerce
(as defined in Section 8.1) shall have occurred (y) within three years after
such Change in Control,
any of the following occur without the written consent of Employee:
(a) Reduction of
Authority. The nature and scope of Employee’s authority with
Commerce or a surviving or acquiring Person are materially reduced to a level
below that which Employee enjoys when the change in control occurs;
(b) Materially Inconsistent
Duties. The duties and responsibilities assigned to Employee
are materially inconsistent with that which Employee has when the change in
control occurs;
(c) Materially Reduced
Benefits. The fringe benefits which Commerce provides Employee
are materially reduced to a level below that which he enjoys when the change of
control occurs;
(d) Reduction of Position or
Title. Employee’s position or title with Commerce or the
surviving or acquiring person is reduced from his position or title with
Commerce when the change of control occurs;
(e) Transfer of Offices and
Relocation. Any relocation or transfer of Commerce’s principal
executive offices to a location more than fifty (50) miles from their locations
when the change of control occurs; or if Employee is required, without his
written consent, to relocate more than fifty (50) miles from his principal
residence when the change of control occurs;
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(f) Material
Breaches. Commerce materially breaches this Agreement;
or
(g) Non-Assumption. There
is a failure or refusal of any successor to Commerce to assume all duties and
obligations of Commerce under this Agreement;
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so
long as, with respect to clause (iii), (1) Employee shall first give
Commerce not less than thirty (30) days prior written notice of his
intention to terminate his employment specifying the reason(s) why such
termination is not Voluntarily as set forth above and the date of
termination; and (2) after receipt of such notice, if Commerce fails to
cure or remedy the reason(s) for such termination before the date of
termination set forth in such notice. Notwithstanding the
foregoing, by executing this Agreement, Employee agrees that none of the
events described in clauses (a) through (g) shall be deemed to occur
solely due to the fact that (i) as a result of the consummation of the
Merger (as defined in Section 8.1 below), Commerce ceases to be a publicly
held corporation (and as such, Employee’s title, duties and
responsibilities are no longer those held at a publicly held corporation),
and (ii) the Employee will report to the President and CEO of TD
Banknorth, NA and TD Banknorth,
Inc.
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If a “Change in Control” (as defined in
Section 8.1) shall occur during the Term of this Agreement, then Employee shall
be entitled to a “Change in
Control Payment” which shall be equal to an aggregate amount of
$4,000,000.00, the payment of which is subject to this Section 6. The
Change in Control
Payment shall be paid by Commerce in four (4) equal installments equal to
$1,000,000.00 each, less applicable withholding taxes, with the first
installment to be paid on the Closing Date or January 1,
2008 (whichever occurs later), and the remaining installments being paid on each
successive anniversary of the Closing Date until all installments have been
paid. Notwithstanding the foregoing, if Employee terminates
employment Voluntarily or if Commerce terminates Employee’s employment with
Commerce for Cause, in either case prior to the third anniversary of the Closing
Date, Employee shall not be entitled to receive, and Commerce shall have no
further obligation to pay, any remaining unpaid installment(s) of the Change in
Control Payment (for purposes of clarity, the foregoing are the only
circumstances pursuant to which the Change in Control Payment will not be fully
paid to Employee on the respective anniversary dates set forth
above).
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7. 280G Cut-Back and Other
Provisions
7.1 Parachute
Payments. Upon a payment event under this Agreement, Commerce
shall promptly determine whether such payment is considered a “parachute
payment” under Section 280G of the Code, and, if so, the aggregate present value
pursuant to Section 280G(d)(4) of the Code of all amounts payable to Employee
under this Agreement, and of all other amounts payable to him upon or by reason
of the “Change in Control” or of his termination which are determined in good
faith by Commerce to be “parachute payments” (as
defined in section 280G(b)(2) of the Code and the regulations promulgated
thereunder) made pursuant to agreements or plans which are subject to section
280G.
(a)
Determination. Commerce’s
determination of present
value and of other amounts constituting “parachute payments” is binding;
provided that (1) Commerce use all commercially reasonable efforts to determine
the maximum portion of such present value and other amounts that constitute
“reasonable compensation” under Section 280G of the Code and the regulations
promulgated thereunder and (2) if Employee obtains an opinion of counsel
satisfactory to Commerce or an Internal Revenue Service ruling to the effect
that the method of determining present value was improper or that specified
payments did not constitute “parachute payments,” then calculations will be made
in accordance with such opinion or ruling.
(b)
Waiver for Base Amount Equal to or
Over 300%. If
the aggregate present value of all benefits under this Agreement and other
“parachute payments” is equal to or in excess of 300% of Employee’s “base amount” as defined in
Section 280G (b)(3)(A) and the regulations thereunder, then Employee waives the
right to “parachute payments” sufficient to reduce the present value of all such
payments below 300% of the “base amount.” Employee shall have the right to
designate those benefits which shall be waived or reduced in order to comply
with this provision; but, failing designation by Employee, Commerce may
designate those benefits which may be waived or reduced.
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(c)
Payment on
Non-Deductibility. If it is established pursuant to a final
determination of a court of competent jurisdiction or an Internal Revenue
Service proceeding that, notwithstanding the good faith of Commerce and Employee
in applying the terms of this Section 7, the aggregate “parachute payments” paid
to or for Employee’s benefit are in an amount that would result in any portion
of such “parachute payments” not being deductible by Commerce or any affiliate
by reason of Section 280G of the Code, then Employee shall have an obligation to
pay Commerce upon demand an amount equal
to the sum of:
i) the excess of the aggregate “parachute
payments” paid to or for Employee’s benefit without any portion of such
“parachute payments” not being deductible by reason of Section 280G of the Code;
and
ii) interest on the amount set forth in
clause (i) above at the applicable federal rate (as defined in Section 1274(d)
of the Code) from the date of Employee’s receipt of such excess until the date
of such payment.
7.2 Plans and Program
Rights. Except as provided in this Section 7, nothing in this
Agreement shall affect or have any bearing on Employee’s entitlement to other
benefits under any plan or program providing benefits by reason of termination
of employment.
7.3 No Mitigation by
Employee. Anything in this Agreement to the contrary
notwithstanding, Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment, nor shall
there be a right to set off.
8. “Change
in Control” Definition.
8.1 “Change in
Control”. For this Agreement, a “change in control” or “change of control” means the
occurrence of any one of the following events:
(a) individuals
who constitute the Board as of the date of the adoption of this Agreement (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to the date
of this Agreement, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the Board (either
by a specific vote or by approval of the proxy statement of Commerce in which
such person is named as a nominee for director, without written objection by
such Incumbent Directors to such nomination) shall be deemed to be an Incumbent
Director; provided, however, that no individual elected or nominated as a
director of Commerce initially as a result of an actual or threatened election
contest with respect to directors or as a result of any other actual or
threatened solicitation of proxies by or on behalf of any person other than the
Board shall be deemed to be an Incumbent Director;
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(b) any
“person” (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Commerce representing 30% or more of the combined voting power of Commerce’s
then outstanding securities eligible to vote for the election of the Board (the
“Company Voting Securities”); provided, however, that the event described in
this paragraph (b) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions: (A) by Commerce, (B) by any
employee benefit plan sponsored or maintained by Commerce, or by any employee
stock benefit trust created by Commerce, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) pursuant
to a Non-Qualifying Transaction (as defined in paragraph (c)); or
(c)
the
consummation of a merger, consolidation, share exchange or similar form of
corporate transaction involving Commerce or any of its Subsidiaries that
requires the approval of Commerce’s shareholders, whether for such transaction
or the issuance of securities in the transaction (a “Business Combination”),
unless immediately following such Business Combination: (A) more than
50% of the total voting power of (x) the corporation resulting from the
consummation of such Business Combination (the “Surviving Corporation”), or (y)
if applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Company Voting Securities that were outstanding immediately prior
to such Business combination (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan sponsored or
maintained by the Surviving Corporation or the Parent Corporation or any
employee stock benefit trust created by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of 30%
more of the total voting power of the outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Business Combination were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”).
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Notwithstanding
the foregoing, a Change in Control of Commerce shall not be deemed to
occur solely because any person acquires beneficial ownership of more than
30% of Commerce Voting Securities as a result of the acquisition of
Company Voting Securities by Commerce which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by
Commerce such person becomes the beneficial owner of additional Company
Voting Securities that increases the percentage of outstanding Company
Voting Securities beneficially owned by such person, a Change in Control
of Commerce shall then occur.
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For purposes of clarity, it is
acknowledged that the consummation of the transaction contemplated by the
Agreement and Plan of Merger, dated as of the
date of execution of such agreement, by and between The Toronto Dominion Bank,
Cardinal Merger Co. and Commerce (the “Merger”), shall constitute a Change in
Control of Commerce (the foregoing not being the exclusive list of Merger
Agreements that could possibly result in a Change in Control as defined
herein).
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9. Confidential
Information, Non-Competition and Non-Solicitation.
9.1 Confidentiality.
(a)
Company
Information. For purposes of this Agreement, Employee
acknowledges and agrees that the term “Company Information” shall
mean information that Commerce owns or possesses, that it has developed at
significant expense and effort, that it uses or is potentially useful in its
business, that it treats as proprietary, private or confidential, and that is
not generally known to the public, including but not limited to client lists,
referral lists, employee lists, financial data, marketing programs of Commerce,
other specialized facts regarding customers of Commerce, and all other papers,
documents and computer records containing such information; provided, however,
that Company Information shall not mean information that is or becomes publicly
available by means other than unauthorized disclosure.
(b)
Non-Disclosure
Non-Use. Employee covenants and agrees that during the Term of
his employment or at any time thereafter he will (1) keep all company
information strictly confidential and that he will not use such information for
any purpose whatsoever or divulge such information to any Person other than
Commerce or Persons with respect to whom Commerce has given its written consent
to divulge such information; (2) safeguard Commerce’s Company Information from
exposure to, or appropriation by unauthorized Persons, and that he will not,
without the prior written consent of Commerce, divulge, reveal, report, publish,
transfer or use for any purpose whatsoever (except as required by law), such
Company Information.
(c)
Upon
termination of Employee’s employment hereunder for any reason whatsoever,
Employee covenants and agrees that he will return to Commerce all such Company
Information, and any and all other property belonging to Commerce which is in
his possession or under his control. Employee further covenants and
agrees that under no circumstances will he remove from the offices of Commerce
any of its books, records, documents, customer lists, or copies thereof, which
constitute Company Information nor will he make any copies thereof outside of
the office except as personally authorized in writing by
Commerce.
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9.2 Commerce’s
Interests. Employee will not, during the Term, except with the
express prior written consent of the Board, directly or indirectly, whether as
employee, owner, partner, consultant, agent, director, officer, shareholder or
in any other capacity, engage in or assist any Person to engage in any act or
action which Employee acting reasonably, believes or should believe would be
harmful or inimical to the interests of Commerce.
9.3 Non-Competition. Employee
further covenants and agrees that while he is employed by Commerce, and for a
period of twelve (12) months after his employment with Commerce has been
terminated for any reason whatsoever, he will not directly or indirectly, on his
own behalf or for the benefit of any natural person, corporation, partnership,
trust, estate, joint venture, sole proprietorship, association, cooperative or
other entity, establish, engage or participate in or otherwise perform work for
or provide advice to any banking related business in any geographic area in
which Commerce and its subsidiaries are then conducting such
business. The foregoing restriction shall not prohibit Employee from
owning as a shareholder less than 5% of the outstanding voting stock of an
issuer engaged for a commercial banking business.
9.4 Non-Solicitation. Employee
covenants and agrees that during the term of his employment and for period of
twelve (12) months after his employment with Commerce has been terminated for
any reason whatsoever, he will not directly or indirectly, for his own behalf or
for the benefit of any other Person or entity solicit, aid in solicitation of,
induce, encourage, hire or in any way cause any Commerce employee to leave the
employ of Commerce; or solicit, aid, induce or in any way cause a Commerce
customer to alter its relationship with Commerce, or otherwise conduct business
with or consult for a customer of Commerce.
9.5 Intellectual
Property. All rights, including without limitation,
Intellectual Property Rights (as hereinafter defined), title, and interest in
and to ideas, inventions, methods, works of authorship, designs, analyses,
drawings, reports or processes, and all similar or related information, and all
components and derivatives thereof, whether completed or not, relating to
Commerce’s actual or anticipated business, research and development, or existing
or future products or services that are conceived, developed, or made by the
undersigned while employed by Commerce (“Work Product”), shall lie exclusively
in Commerce. All works and all components thereof comprised by the
Work Product, including, but not limited to, all masks, databases, written
materials, and other reductions of expression into tangible media, whether
completed or not, were and are works made for hire and all right, title and
interest (in every country, in all media, now existing or created in the future,
and for the entire duration of such rights) in such works lie, upon creation,
exclusively with Commerce, and Employee reserves no rights in such
works.
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(a)
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To
the extent that some or all rights, including without limitation,
Intellectual Property Rights, title and interest in and to the Work
Product do not lie, upon creation, exclusively with Commerce, Employee
irrevocably sells, assigns, transfers, and sets over to Commerce all
rights, including without limitation, Intellectual Property Rights title
and interest in and to the Work Product or any component of the Work
Product, whether completed or not (in every country, in all media, now
existing or created in the future, and for the entire duration of such
rights), exclusively to Commerce.
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(b)
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Employee
shall, at Commerce’s expense, cooperate and take all steps reasonably
requested by Commerce to perfect, confirm, and protect Commerce’s
worldwide rights, including without limitation, Intellectual Property
Rights, title, and interest in and to the Work Product including without
limitation, executing and delivering all documents, filing registration
and assignment documents, and giving
testimony.
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(c)
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For
purposes of this Agreement, Employee acknowledges and agrees that the term
“Intellectual Property Rights” shall mean all intellectual property rights
worldwide arising under statutory or common law, and whether or not
perfected, including without limitation, all (a) patents, reissues of and
reexamined patents, and patent applications, whoever filed and wherever
issued, including without limitation, continuations, continuations-in
part, substitutes, and divisions of such applications and all priority
rights resulting from such applications, (b) rights associated with works
of authorship including copyrights, copyright applications, copyright
registrations, mask work rights, mask work applications, mask work
registrations, (c) rights relating to the protection of trade secrets and
confidential information, (d) rights analogous to those set forth in this
definition and any and all other proprietary rights relating to intangible
property and (e) divisions, continuations, renewals, reissues and
extensions of the foregoing (as and to the extent applicable) now
existing, hereafter filed, issued, or
acquired.
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9.6 Remedies. If
this Agreement expires without a successor agreement or is terminated, the
restrictions contained in this Section 9 above shall remain in full force and
effect for a period of twelve (12) months after Employee’s
employment with Commerce terminates for whatever reason.
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(a)
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Employee
hereby acknowledges and agrees that Commerce’s business and services are
highly competitive, and that the restrictions contained in Section 9 are
reasonable and necessary to protect Commerce’s legitimate business
interests. Employee further acknowledges that in the event his
employment with Commerce terminates, he will still be able to earn a
livelihood without violating this Agreement, and that compliance with
Section 9 is a material condition to his employment and continued
employment with Commerce.
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(b)
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The
parties agree that any breach by Employee of any of the covenants or
agreements contained in this Section 9 will result in irreparable injury
to Commerce for which money damages could not adequately compensate
Commerce and therefore, in the event of any such breach, Commerce shall be
entitled ( in addition to any other rights and remedies which it may have
at law or in equity) to seek an injunction issued by any competent court
enjoining and restraining Employee and/or any other Person involved
therein from continuing such breach. The existence of any claim
or cause of action which Employee may have against Commerce or any other
Person (other than a claim for Commerce’s breach of this Agreement for
failure to make payments hereunder) shall not constitute a defense or bar
to the enforcement of such
covenants.
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9.7 Enforceability. If
any portion of the covenants or agreements contained in this Section 9, or the
application hereof, is construed to be invalid or unenforceable, the other
portions of such covenant(s) or agreement(s) or the application thereof shall
not be affected and shall be given full force and effect without regard to the
invalid or unenforceable portions to the fullest extent possible. If any
covenant or agreement in this Section 9 is held to be unenforceable because of
the duration thereof or the scope thereof, then the court making such
determination shall have the power to reduce the duration and/or limit the scope
thereof, and the covenant or agreement shall then be enforceable in its reduced
form.
9.8 Notifications. During
the Term of this Agreement and the restricted period specified in this Section 9
hereof, Employee agrees to notify any prospective employers, joint venturers,
partners, associations or other entities, of this Agreement with Commerce;
and/or if Employee accepts employment or establishes a relationship with a
competitor of Commerce, Employee agrees to notify Commerce immediately of such
relationship. If Commerce reasonably believes that Employee is
affiliated or employed by or with a competitor of Commerce during the restricted
period specified in this Section 9, then Employee grants Commerce the right to
forward a copy of this Agreement to such competitor/employer.
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9.
9 Extensions. If
a violation by Employee of any of the covenants contained in Section 9 of this
Agreement occurs, he agrees that the restrictive period, as set forth in this
Section, so violated shall be extended by a period of time equal to the period
of such violation by him. It is the intent of this paragraph that the
running of the restricted period shall be tolled during any period of violation
of such covenant so that Commerce shall get the full and reasonable protection
for which it contracted and so that an Employee may not profit by
the breach.
10. Successors
and Assigns.
10.1
Successors/Assigns. This
Agreement shall inure to the benefit of and be binding upon any corporate or
other successor of Commerce which may acquire, directly or indirectly, by
combination, merger, consolidation, purchase, or otherwise, all or substantially
all of the assets of Commerce; and, shall otherwise inure to the benefit of and
be binding on Commerce and Employee and their respective heirs, executors,
administrators, successors and assigns.
10.2 Death. Upon Employee’s death,
any payments or benefits otherwise due him under this Agreement shall be paid
to, or be for the benefit of, Employee’s legal representatives.
10.3 Combinations. Nothing in the
Agreement shall preclude Commerce from combining, consolidating or merging into
or with, or transferring all or substantially all of its assets to, another
Person. In that event, such other Person shall assume this Agreement and all
obligations of Commerce in this Agreement. Upon such a combination,
consolidation, merger, or transfer of assets and assumption, the term “Commerce”
as used in this Agreement, shall mean such other Person and this Agreement shall
continue in full force and effect.
11. Assignment.
11.1 Neither this
Agreement, nor any rights to receive payments under this Agreement, shall be
voluntarily or involuntarily assigned, transferred, alienated, encumbered or
disposed of, in whole or in part, without Commerce’s prior written consent and
approval; and, this Agreement and such payment rights shall not be subject to
anticipation, levy, execution, garnishment, attachment by, or interference or
control of, any creditor.
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12.
Source of
Payment and Timing.
12.1 Source. All
payments provided under this Agreement shall be paid in cash from the general
funds of Commerce; no special or separate fund shall be required to be
established by Commerce; and Employee shall have no right, title or interest
whatsoever in or to any investment that Commerce may make to aid Commerce in
meeting any obligations under this Agreement except to the extent that Commerce
shall, in its sole and absolute discretion, choose to designate any of its
rights it may have under one or more life insurance policies it may obtain to
cover any of its obligations under this Agreement. Nothing in this Agreement,
and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind or fiduciary relationship
between Commerce and Employee or any other Person.
13. Notices.
13.1 Form of Notice. All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered
by: hand with delivery receipt; or certified or registered mail,
return receipt requested, with postage prepaid; or overnight or express courier
with a receipt-for-delivery tracking system.
13.2 Place of Notice. All notices are
to be delivered to the following addresses or to such other address as either
party may designate by like notice:
i) If
to Employee, to the address of Employee on the books and records of Commerce
from time to time
ii) If
to Commerce, to:
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Office
of the Chairman
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Commerce
Bancorp, Inc.
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Commerce
Atrium
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0000
Xxxxx 00 Xxxx
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Xxxxxx
Xxxx, Xxx Xxxxxx 00000-0000
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and to
such other or additional person or persons as either party shall have designated
to the other party in writing by like notice.
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14. General
Provisions.
14.1 Entire
Agreement. Nothing in this Agreement shall require the payment
of any amounts hereunder to the extent not permitted by applicable
law. This Agreement constitutes the entire agreement between
Commerce and Employee concerning its subject matter. It supersedes
and replaces all prior discussions, representations, promises or agreements,
whether written or oral, expressed or implied, between Employee, Commerce or
their representatives.
14.2 Amendments, Waivers and
Termination. No amendment, waiver or termination of any of the
provisions of this Agreement shall be effective unless made in writing and
signed by the party against whom it is sought to be enforced. Any written
amendment, waiver or termination of this Agreement executed by Commerce and
Employee (or his legal representatives) shall be binding upon them and upon all
other Persons, without the necessity of securing the consent of any other Person
including, but not limited to, Employee’s spouse, and no Person shall be deemed
to be a third party beneficiary under this Agreement except to the extent
provided under Section 10.1 above.
14.3 Benefits and
Insurance. The benefits provided under this Agreement shall be
in addition to and shall not affect the proceeds payable to Employee’s
beneficiaries under group life insurance policies which Commerce may be carrying
on Employee’s life.
14.4 “Person”. As used in
this Agreement, “Person”
means a natural person, joint venture, corporation, sole proprietorship, trust,
estate, partnership, cooperative, association, non-profit organization or any
other legal entity.
14.5 Counterparts. This
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same Agreement.
14.6 Waiver. Except as
otherwise expressly stated in this Agreement, no failure by any party to this
Agreement to exercise and no delay in exercising any right, power or remedy
under this Agreement shall operate as a waiver; nor shall any single or partial
exercise of any right, power or remedy under this Agreement preclude any other
or further exercise thereof or the exercise of any other right, power or
remedy.
14.7 New Jersey Exclusive
Jurisdiction. Commerce and Employee irrevocably, knowingly and
expressly consent to:
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of 21
(a) Courts in Camden,
NJ. The exclusive jurisdiction of the Superior Court, Chancery
or Law Division, Camden County, New Jersey, or the United States District Court
for the District of New Jersey, Camden Vicinage, to enforce this Agreement, or
to resolve any claim, controversy or dispute involving it; and
(b) Service of
Process. Service of process as set forth in the Notice stated
in Section 13 above.
14.8 Headings. The
headings of the sections of this Agreement have been inserted for convenience
and clarity. They do not restrict or modify any of the terms or
provisions of this Agreement.
14.9 Cure. If Commerce
or Employee has a dispute or claim under this Agreement, then that dispute or
claim shall be described with specificity in writing and sent according to the
Notice stated in Section 13 above; and, the party receiving such written notice
shall have ten (10) business days to cure the dispute or claim.
14.10 New Jersey Law
Governs. This Agreement shall be governed and construed and
the legal relationships of the parties determined in accordance with the laws of
the State of New Jersey applicable to contracts executed and to be performed
solely in the State of New Jersey.
[Signatures
on Next Page]
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IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.
COMMERCE BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
Name: Xxxxxxx X.
Xxxxx
EMPLOYEE
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Page 20 of 21
Amendment to Employment
Agreement
This
Amendment to Employment Agreement (this “Amendment) is entered into by and
between Xxxx Xxxxxxxx (hereinafter “Employee”) and Commerce Bancorp, Inc. (and
all of its affiliates and subsidiaries) (hereinafter collectively “Commerce”), a
New Jersey business corporation, effective as of the date written
below. This Amendment amends the Amended and Restated Employment
Agreement between Employee and Commerce dated as of October 2, 2007 (the
“Employment Agreement”).
For
purposes of complying with Section 409A of the Internal Revenue Code of 1986, as
amended, the last sentence of Section 7.1(b) of the Employment Agreement is
deleted, and in its place, the following sentence is added:
“If and
only to the extent that it becomes necessary to reduce any compensation payable
to Employee in order to comply with this provision, then (i) the installment of
the Change in Control Payment to be paid to Employee on the third anniversary of
the Closing Date shall be reduced first, (ii) the installment of the Change in
Control Payment to be paid to Employee on the second anniversary of the Closing
Date shall be reduced second, (iii) the installment of the Change in Control
Payment to be paid to Employee on the first anniversary of the Closing Date
shall be reduced third, (iv) the installment of the Change in Control Payment to
be paid to Employee on the Closing Date shall be reduced fourth, and (v) any
other cash payments to be paid to Employee shall be reduced fifth, commencing
with those payments payable latest in time and ending with those payments
payable earliest in time under the terms of this Agreement.”
In addition, Section 7.1(c) of the
Employment Agreement (for purposes of clarity, including subsections (i) and
(ii) thereof) is hereby deleted, and all references thereto are hereby
deleted.
All other terms of the Employment
Agreement remain unamended. This Amendment may be signed in
counterparts, all of which shall be considered one and the same
instrument.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
December 31, 2007.
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COMMERCE
BANCORP, INC.
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By:
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/s/ Xxxxxxx
X. Xxxxx
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EMPLOYEE
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/s/ Xxxx
Xxxxxxxx
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Xxxx
Xxxxxxxx
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Page 21 of 21
