EMPLOYMENT AGREEMENT
AGREEMENT made this _______ day of ____________________, 1996 between CARNEGIE
BANCORP, a New Jersey corporation having its principal place of business at 000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Carnegie") and Xxxx X. Xxxxxxx, an
individual residing at ______________________________________ (the "Executive").
W I T N E S S E T H:
WHEREAS, Carnegie deems it to be in its best interests to secure and
retain the services of the Executive and the Executive desires to work for
Carnegie upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Employment and Term.
(a) Carnegie hereby employs the Executive as Executive Vice
President of Carnegie and of Carnegie Regent Bank, N.A. (collectively, the
"Position") and the Executive agrees to serve in the employ of Carnegie in the
Position, for a term of three years (the "Initial Term"), which shall commence
on the date hereof (the "Effective Date"), and which, subject to paragraphs 1(b)
and 1(c) hereof, shall terminate on the third anniversary of the Effective Date.
(b) Unless written notice terminating the term of employment
is given by either Carnegie or the Executive not less than 90 days prior to the
end of the Initial Term or any renewal term, this Agreement shall be
automatically extended, on all of the terms and conditions hereof, for
successive periods of one year.
(c) Carnegie shall have the right to terminate the Executive's
employment hereunder prior to the third anniversary of the Effective Date, but
only for cause. For purposes of this Agreement, "cause" means (i) the
Executive's willful and continued failure substantially to perform the duties of
his Position with Carnegie, (ii) fraud, misappropriation or other intentional
material damage to the property or business of Carnegie, (iii) the Executive's
admission or conviction of, or plea of nolo contendere to, any felony that, in
the judgment of the Board of Directors of Carnegie (the "Board"), adversely
affects Carnegie's reputation or the Executive's ability to perform his duties
hereunder; or (iv) Executive's willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease-and-desist
order issued by or regulatory consent agreement with any banking regulatory
agency having jurisdiction over Carnegie or its subsidiaries.
(d) The Executive shall have the right to terminate his employment
hereunder at any time prior to the third anniversary of the Effective Date, upon
giving sixty (60) days' prior written notification to Carnegie.
2. Duties.
(a) Subject to the ultimate control and discretion of the
Board and the Chief Executive Officer, the Executive shall serve in the Position
and perform all duties and services of an executive nature commensurate to the
Position which the Board and the Chief Executive Officer may from time to time
reasonably assign to the Executive.
(b) The Executive shall, consistent with his position
Executive Vice President of Carnegie, be responsible for such duties and
services as are incidental to the position, subject to the authority of the
Board and the Chief Executive Officer of Carnegie.
(c) The Executive shall devote all of the Executive's time and
attention during regular business hours to the performance of the Executive's
duties hereunder and, during the term of the Executive's employment hereunder,
shall not engage in any other business enterprise which requires more than five
hours per week of the Executive's personal time or attention, unless granted the
prior permission of the Board. The foregoing shall not prevent the Executive's
purchase, ownership or sale of investment securities or of any interest in, any
business which competes with the business of Carnegie or the Executive's
involvement in charitable or community activities, provided that the time and
attention which the Executive devotes to such business and activities does not
materially interfere with the performance of the Executive's duties hereunder.
3. Compensation.
(a) For all services to be rendered by the Executive under
this Agreement, Carnegie agrees to pay the Executive a salary of not less than
$110,000 per annum during the term of this Agreement ("Base Compensation"),
payable in accordance with Carnegie's normal payroll practices as in effect from
time to time, plus an annual bonus (the "Bonus") equal to not less than 1.2
percent of the net after-tax income of Carnegie calculated before the
Executive's and other executive additional compensation is deducted and before
any dividends or other bonuses are deducted, plus such other additional
compensation as may be awarded from time to time to the Executive by the Board.
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(b) The Executive, in his capacity as a Director of Carnegie,
shall receive a fee of $750 for each Directors meeting and an additional fee of
$300 for each Committee meeting attended; provided, however, that Executive
shall not be entitled to any compensation for attendance at loan committee
meetings. Said amount shall be increased in the event the Board increases the
per meeting compensation of members of the Board.
(c) The compensation provided for in paragraph 3(a) hereby
shall be in addition to such rights as the Executive may have, during the
Executive's service thereunder or hereafter, to participate in and receive
benefits from or under any bonus, stock option, pension, profit-sharing,
insurance or other employee benefit plan or plans of Carnegie which may exist
now or hereafter (collectively, the "Plans").
(d) During the term of the Executive's employment hereunder
and for a period of two years after the termination of such employment (unless
such termination is by Executive pursuant to paragraph 1(d) hereof or by
Carnegie pursuant to paragraph 1(c)(ii), (iii) and (iv) hereof), Carnegie agrees
to provide the Executive and his spouse, or reimburse the Executive and his
spouse for the cost of, (i) the medical and dental insurance benefits in which
the Executive and his spouse participated immediately prior to the Effective
Date or (ii) equivalent or better benefits.
(e) If Carnegie terminates the Executive's employment
hereunder, other than in accordance with paragraph 1(c) hereof, prior to the
expiration of the Initial Term, Carnegie shall continue to pay the Executive the
Base Compensation and Bonus provided in paragraph 3(a) hereof, in accordance
with Carnegie's normal payroll practices in effect from time to time, and
maintain or pay for the medical and dental insurance benefits provided in
paragraph 3(d) hereof, for the remainder of the Initial Term.
4. Vacations. The Executive shall be entitled each year to four weeks
of vacation time during which vacation the Executive shall continue to receive
the compensation provided in paragraph 3 hereof. Each vacation shall be taken by
the Executive at such time or times as the Executive reasonably determines,
taking into account Executive's duties as set forth in Section 2 hereof and
Carnegie's business needs at any particular time.
5. Expenses. Carnegie shall promptly reimburse the
Executive for all reasonable expenses paid or incurred by the
Executive in connection with his employment hereunder upon
presentation of expense vouchers or appropriate documentation
therefor reasonably requested by Carnegie.
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6. Death. If the Executive dies during the Initial Term of this
Agreement, this Agreement shall terminate and Carnegie's sole obligation
hereunder shall be to pay to the Executive's spouse, if such spouse survives the
Executive, or if not, to the Executive's issue in equal amounts, or if none
survive, to his Estate, (a) any accrued but unpaid compensation due the
Executive pursuant to paragraph 3 hereof to the date of the Executive's death
and (b) the Base Compensation and Bonus which would otherwise be payable to
Executive through the end of the 12-month period following the date of the
Executive's death. Such Base Compensation and Bonus shall be paid in accordance
with Carnegie's normal payroll practices as in effect from time to time.
7. Indemnification. Carnegie shall indemnify the Executive, to the
fullest extent permitted by law, for any and all liabilities to which the
Executive may be subject as a result of, in connection with or arising out of
his employment by Carnegie hereunder, as well as the costs and expenses
(including attorneys' fees) of any legal action brought or threatened to be
brought against the Executive or Carnegie as a result of, in connection with or
arising out of such employment. The Executive shall be entitled to the full
protection of any insurance polices which Carnegie may elect to maintain
generally for the benefit of its directors and officers.
8. Change in Control.
(a) Upon the occurrence of a Change in Control (as herein
defined) followed at any time during the term of this Agreement by the
involuntary termination of the Executive's employment other than for "cause", as
defined in paragraph 1(c) hereof, or, as provided below, the voluntary
termination of his employment by Executive within 18 months of such Change in
Control, the Executive shall be entitled to the benefits provided under
paragraph 8(c). Upon the occurrence of a Change in Control, the Executive shall
have the right to elect to voluntarily terminate his employment within 18 months
of such Change in Control following any demotion, loss of title, office or
significant authority, reduction in his annual compensation or benefits, or
relocation of his principal place of employment by more than thirty miles from
its location immediately prior to the Change in Control.
(b) A "Change in Control" shall mean:
(i) a reorganization, merger, consolidation
or sale of all or substantially all of the assets
of Carnegie, or a similar transaction in which
Carnegie is not the resulting entity and which is
not approved by a majority of the Incumbent Board
(as herein defined);
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(ii) individuals who constitute the
Incumbent Board of Carnegie cease for
any reason to constitute a majority thereof;
(iii) the acquisition by any party or group
acting in concert of control of Carnegie, within
the meaning of 12 C.F.R. ss. 225.2(d)(2), as
determined by the Incumbent Board; provided,
however, that a change in control shall not be
deemed to occur if the transaction(s) constituting
a change in control is approved by a majority of
the Incumbent Board;
(iv) an event of a nature that would be
required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange
Act").
(v) Without limitation, a change in control
shall be deemed to have occurred at such time as
(i) any "person" (as the term is used in Section
13(d) and 14(d) 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 Carnegie representing 25 percent or
more of Carnegie's outstanding securities
ordinarily having the right to vote for the
election of directors, excluding any securities
purchased by any employee benefit plans established
by Carnegie from time to time in determining
whether such person is the beneficial owner of more
than 25 percent of Carnegie's securities; or
(vi) A proxy statement soliciting proxies
from stockholders of Carnegie is disseminated by
someone other than the current management of
Carnegie, seeking stockholder approval of a plan of
reorganization, merger or consolidation of Carnegie
or similar transaction with one or more
corporations as a result of which the outstanding
shares of the class of securities then subject to
the plan or transaction are exchanged or converted
into cash or property or securities not issued by
Carnegie;
(vii) A tender offer is made for 25 percent
or more of the voting securities of Carnegie and
the stockholders owning beneficially or of record
25 percent or more of the outstanding securities
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of Carnegie have tendered or offered to sell their
shares pursuant to such tender offer and such
tendered shares have been accepted by the tender
offeror.
For these purposes, "Incumbent Board" means the Board of
Directors of Carnegie on the Effective Date, provided that any person becoming a
director of Carnegie subsequent to the Effective Date whose election was
approved by a vote of at least three-quarters of the directors comprising the
Incumbent Board, or whose nomination for election by members or stockholders was
approved by the same nominating committee serving under an Incumbent Board,
shall be considered as though he were a member of the Incumbent Board.
(c) In the event the conditions of paragraph (a) above are
met, the Executive shall be entitled to receive the Base Compensation and Bonus
which would otherwise have been payable to the Executive through the end of the
18-month period after such termination. Such payments will be made in accordance
with Carnegie's normal payroll practices in effect at the time of the
Executive's termination. In addition, Carnegie shall continue to provide the
Executive with hospital, health, medical and life insurance, and any other
benefits in effect at the time of such termination through the end of such
period. The Executive shall have no duty to mitigate damages in connection with
his termination by Carnegie or its successor without cause. However, in the
event the Executive obtains new employment and such new employment provides for
hospital, health, medical and life insurance, and other benefits, in a manner
substantially similar to the benefits payable by Carnegie to the Executive upon
the date of such termination, Carnegie may permanently terminate the duplicative
benefits it is obligated to provide hereunder.
9. Additional Covenants.
(a) Confidential Information. Except as required in the
performance of his duties hereunder, the Executive shall not use or disclose any
Confidential Information (as hereinafter defined) or any know-how or experience
related thereto without the express prior written authorization of Carnegie.
Upon termination of his employment, the Executive shall leave with Carnegie all
documents and other items in his possession which contain Confidential
Information. For purposes of this paragraph 9(a), the term "Confidential
Information" shall mean all information about Carnegie or relating to any of its
services or any phase of its operations not generally known to any of its
competitors with which the Executive becomes acquainted during the term of his
employment.
(b) Specific Performance. Carnegie and the Executive
agree that irreparable damage would occur in the event that the
provisions of paragraph 9(a) hereof were not performed in
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accordance with their specific terms or were otherwise breached. Carnegie and
the Executive accordingly agree that Carnegie shall be entitled to an injunction
or injunctions to prevent a breach of paragraph 9(a) hereof and to enforce
specifically the terms and provisions of paragraph 9(a) hereof in addition to
any other remedy to which Carnegie is entitled at law or in equity.
10. Notices. Any notice required or permitted to be given
under this Agreement shall be sufficient, if in writing and if
sent by registered or certified mail to either party hereto at
their respective addresses set forth above. All notices shall be
deemed given when mailed.
11. Assignability. The services of the Executive hereunder are personal
in nature, and neither this Agreement nor the rights or obligations of Executive
hereunder may be assigned , whether by operation of law or otherwise. This
Agreement shall be binding upon, and inure to the benefit of, Carnegie and its
permitted successors and assigns hereunder. This Agreement shall inure to the
benefit of the Executive's heirs, executors, administrators and other legal
representatives.
12. Waiver. The waiver by Carnegie or the Executive of a
breach of any provision of this Agreement by the other shall not
operate or be construed as a waiver of any subsequent or other
breach hereof.
13. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New
Jersey without giving effect to principles of conflict of laws.
14. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto with respect to the subject
matter hereof and may not be amended, waived, changed, modified
or discharged, except by an agreement in writing signed by the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under their respective hands and seals as of the day and year first above
written.
CARNEGIE BANCORP
Attest: By:
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Xxxxxx X. Xxxx, Xx.,
President and Chief
Executive Officer
Witness:
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Xxxx X. Xxxxxxx
