EMPLOYMENT AGREEMENT
This Agreement is made the 31st day of December, 1996,
by and among XXXX X. XXXXXX, who currently resides at 00
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred
to as "Xxxxxx"), BROAD NATIONAL BANK, a national banking
association organized under Acts of Congress, with its principal
office located at 000 Xxxxx Xxxxxx in the City of Newark, County
of Essex and State of New Jersey (hereinafter referred to as the
"Bank"), and BROAD NATIONAL BANCORPORATION, the holding company
for the Bank, a corporation organized under the laws of the State
of New Jersey, with its principal office located at 000 Xxxxx
Xxxxxx in the City of Newark, County of Essex and State of New
Jersey (hereinafter referred to as the "Bancorp"). The Bank and
Bancorp are sometimes referred to herein collectively as the
"Corporation" or the "Corporations". In any instance where
reference is made to both the Bank and Bancorp or to the
Corporation or Corporations, unless the context clearly requires
otherwise, conditions, practices or actions referred to shall be
identical or joint.
W I T N E S S E T H:
WHEREAS, Xxxxxx has since April 9, 1992 been employed
as President and Chief Operating Officer of the Bank and of
Bancorp; and
WHEREAS, the Boards of Directors of the Corporations
believe that the continued leadership and productivity of Xxxxxx
will be extremely beneficial and will significantly contribute to
the growth and financial security of the Corporations; and
WHEREAS, the Corporations wish to assure themselves of
the services of Xxxxxx as a employee, officer and, if elected,
director of the Corporations for the period provided in this
Agreement, and Xxxxxx has agreed to serve in the employ of the
Corporations on a full-time basis in such capacities on the terms
and conditions hereinafter set forth; and
WHEREAS, there is currently in effect an Employment
Agreement, dated October 1, 1995, by and among Xxxxxx and the
Corporations (the "Prior Agreement"); and
WHEREAS, the Boards of Directors of the Corporations
have determined that the best interests of the Corporations would
be served by replacing the Prior Agreement with this Agreement as
of the Commencement Date hereinafter set forth;
NOW, THEREFORE, for and in consideration of the
employment of Xxxxxx with the Corporations, the compensation to
be paid and the other benefits to be provided to Xxxxxx by the
Corporations for his services and the mutual covenants set forth
in the Agreement, the parties hereto hereby agree as follows:
1. EMPLOYMENT
1.1 The Corporation agrees to the continued employment
of Xxxxxx, and Xxxxxx agrees to continue to be employed by the
Corporations for the period stated in Section 2.1 hereof and upon
the other terms and conditions herein provided.
1.2 If Xxxxxx is suspended from office and/or
temporarily prohibited from participating in the conduct of the
affairs of the Bank or Bancorp, or both of them, by a notice
served under Section 1818(e)(3) or Section 1818(g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3), or
1818(g)(1)), all obligations of the Corporations under this
Agreement shall be suspended as of the date of service of the
notice, unless stayed by appropriate proceedings. If the charges
specified in the notice are dismissed, Xxxxxx shall be reinstated
in his employment with the Corporations and the Corporations may
in their discretion (i) pay Xxxxxx all or part of the
compensation withheld while their obligations under this
Agreement were suspended, and/or (ii) reinstate (in whole or in
part) any of their obligations which were suspended.
1.3 If Xxxxxx is removed and/or permanently prohibited
from participating in the conduct of the affairs of the Bank or
Bancorp, or both of them, by an order issued under
Section 8(e)(4) or Section (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(e)(4) or 1818(g)(1)), all
obligations of the Corporations under this Agreement shall
terminate as of the effective date of the order, and Xxxxxx shall
not have the right to receive compensation or any of the other
benefits provided for hereunder, unless and then only to the
extent required by law, for any period after such removal or
prohibition.
1.4 If the Bank is in default (as defined in
Section 1813(x)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(x)(1)), all obligations of the Corporations under
this Agreement shall terminate as of the date of default, but
this section shall not affect any vested rights of the parties.
1.5 All obligations of the Corporation under this
Agreement shall be terminated, except to the extent it is
determined that continuation of this Agreement is necessary for
the continued operation of the Bank, (i) by the Federal Deposit
Insurance Corporation ("FDIC"), at any time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank
under the authority of Section 1823(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1823(c)), or (ii) by the FDIC at any
time the FDIC approves a supervisory merger to resolve problems
related to the operation of the Bank or when the Bank is
determined by FDIC to be in an unsafe or unsound condition, but,
in any of the above-described events, the vested rights of Xxxxxx
shall not be affected.
1.6 In the event of receipt of any notice or order, a
default, an agreement to provide assistance, or an approval of
the supervisory merger as such are described in Sections 1.2,
1.3, 1.4 or 1.5 hereof, the suspension or termination of the
obligations of the Corporations hereunder shall be automatic and
shall not be conditioned upon any further action by the
Corporations or delivery of notice to Xxxxxx and shall be deemed
a suspension or termination of employment jointly and severally
by the Bank, Bancorp and the regulatory body providing or
delivering such document; provided, however, that such suspension
or termination shall not prejudice Xxxxxx'x vested rights under
this Agreement.
2. TERMS, POSITION AND RESPONSIBILITIES
2.1 TERM OF EMPLOYMENT. The period of Xxxxxx'x
employment under this Agreement with the Bank and with Bancorp,
respectively, shall commence as of January 1, 1997 (the
"Commencement Date") and shall continue for a period of twelve
(12) full calendar months thereafter and any extension
thereafter, unless this Agreement is earlier terminated in
accordance with the terms hereof (the "Employment Period"). The
Prior Agreement (as defined in the recitals hereto) shall remain
in full force and effect, subject to the terms and conditions
thereof, from the date of this Agreement until the Commencement
Date, whereupon this Agreement shall automatically supersede the
Prior Agreement in its entirety without further action by the
parties hereto. Notwithstanding the foregoing, if at any time
during the Employment Period the shareholders of Bancorp vote
either (i) to approve an agreement to merge or consolidate
Bancorp or the Bank with or into another corporation or (ii) to
sell or otherwise dispose of all or substantially all of its or
their assets, in either case, in a transaction in which a
majority of the outstanding stock of the surviving or acquiring
corporation following such merger, consolidation or sale of
assets shall not be held by persons who held a majority of the
outstanding shares of Bancorp immediately prior to such
transaction the period of Xxxxxx'x employment shall automatically
be extended without further action by the respective parties for
an additional twenty-four (24) calendar months. In such event,
the Employment Period of this Agreement shall for all purposes
hereunder be deemed to include the foregoing twenty-four (24)
calendar month extension.
2.2 DUTIES DURING EMPLOYMENT. During the Employment
Period, Xxxxxx shall serve as the President and Chief Operating
Officer of Broad National Bank and of Broad National
Bancorporation, and shall have the customary duties and
responsibilities of each such office. The employment of Xxxxxx
in such foregoing capacities is a material condition of this
Agreement for purposes of Section 4.1C. In addition, during the
Employment Period, if elected, Xxxxxx shall also serve, without
any additional compensation or fees, as a member of the Boards of
Directors and as a member of the Executive Committees of the
Corporations.
3. COMPENSATION AND REIMBURSEMENT OF EXPENSES
3.1 COMPENSATION - BASE SALARY.
A. The compensation specified under this
Agreement shall constitute the salary and benefits paid Xxxxxx
for his services as described in Section 2.2 by the Bank and
Bancorp. The Corporations shall pay Xxxxxx as compensation an
annual salary ("Base Salary") at the combined rate of One Hundred
Sixty Nine Thousand Five Hundred Dollars ($169,500) for the
calendar year 1997. During the period of this Agreement it is
understood and agreed that Xxxxxx'x Base Salary shall be reviewed
by the Board of Directors of the Corporation or the Bank or a
committee or committees thereof at least annually. The Board of
Directors of the Corporation or the Bank or the committee or
committees thereof may, in their sole discretion, increase the
Base Salary to be paid to Xxxxxx from time to time, to reflect
Xxxxxx'x performance and to maintain a compensation level
comparable to that of similarly situated executives in the
financial institutions industry, but the Base Salary may not be
decreased below the Base Salary specified above in this paragraph
A without the written consent of Xxxxxx.
B. From time to time, the Boards of Directors of
the Corporations shall apportion between the Bank and Bancorp the
amounts payable hereunder without affecting Xxxxxx'x rights
hereunder. Such apportionment shall be made (i) on the basis of
the judgment of such Boards of Directors as to Xxxxxx'x relative
responsibilities and contributions with respect to the Bank and
Bancorp, and (ii) on the basis of such other factors as such
Boards of Directors may deem appropriate.
3.2 PARTICIPATION IN BONUS PLAN. Xxxxxx shall be
entitled to participate in such bonus or other incentive
compensation plan(s) as currently is or may hereafter be
established by the Corporations for their respective executive
officers during the Employment Period. Any such bonus shall be
payable in the manner specified by the appropriate Board of
Directors, or committee of such Board of Directors, at the time
such bonus is awarded.
3.3 PARTICIPATION IN BENEFIT PLANS. The payments
provided for in Sections 3, 5 and 6 hereof, except where
specifically provided otherwise, are in addition to any other
benefits to which Xxxxxx may be, or may become, entitled under
any group hospitalization, health, dental care, or sick-leave
plan, life or other insurance or death benefit plan, travel or
accident insurance, retirement income or pension plan or program
of the Corporations, or other present or future group employee
benefit plan or program of the Bank or Bancorp, for which their
executive officers are or shall become eligible to receive during
the Employment Period, and during any subsequent period for which
Xxxxxx shall be entitled to receive payments from the
Corporations under sections 5 and 6 to the extent permissible
under the general terms and provisions of such plans or programs
and in accordance with the provisions thereof. Xxxxxx shall
contribute such amounts towards such
benefits as are required of all employees so long as he receives
such benefits. Nothing contained in this Agreement shall prevent
the Boards of Directors of the Corporations from amending or
otherwise altering any such plan, program or arrangement so long
as such amendment or alteration equitably affects all executive
officers of the Bank or Bancorp.
3.4 ADDITIONAL BENEFITS. The Corporations recognize
that it is essential to the performance by Xxxxxx of his duties
and responsibilities that the Corporations, at their cost,
provide him with the use of certain facilities and that the
Corporations incur certain expenses during the Employment Period,
as follows:
A. An office commensurate with his position, and
a secretary, as he requires.
B. The nonexclusive use of a late model Buick or
Oldsmobile or comparable car which shall be used by other
personnel of the Corporations when not used by Xxxxxx.
C. Payment of or reimbursement to Xxxxxx, in
accordance with such policies and procedures as the respective
Boards of Directors of the Bank or the Corporation may establish
from time to time, for all reasonable travel, entertainment,
country club dues and other expenses incurred by Xxxxxx in the
performance of his obligations under this Agreement; except that
country club dues shall not be paid for Xxxxxx unless there is a
Change in Control as defined herein or as otherwise specified by
the Board.
X. Xxxxxx shall be entitled to four (4) weeks
paid vacation per calendar year, or such longer period as the
Corporations may from time to time determine (prorated in any
calendar year in such longer period during which Xxxxxx is
employed hereunder for less than such entire year or longer
period).
E. Participation in the Bank's Split Dollar Life
Insurance Plan with coverage of $500,000.
4. TERMINATION OF EMPLOYMENT
4.1 TERMINATION OF EMPLOYMENT. Xxxxxx'x employment
under this Agreement may be terminated by the Corporation or
Xxxxxx as follows:
A. DISABILITY. If, as a result of Xxxxxx'x
incapacity due to physical or mental illness or injury, Xxxxxx
shall have been absent from his duties with the Corporation(s) on
a full time basis or he is unable to substantially perform the
services required for his employment for a period of six (6)
consecutive months, or shorter periods aggregating one hundred
eighty (180) days within any consecutive twelve (12) month
period, and within thirty (30) days after written notice of
potential termination is given by either the
Bank or Bancorp he shall not have returned to the full-time
performance of his duties within such notice period, then
Xxxxxx'x employment under this Agreement will terminate
for "Disability".
B. DEATH. If Xxxxxx dies while employed under
this Agreement, his employment with the Corporations under this
Agreement will terminate as of the date of his death ("Date of
Death").
C. TERMINATION BY XXXXXX. Xxxxxx shall be
entitled to terminate his employment with the Corporation (i) if
the Corporation defaults or otherwise commits a breach of a
material term or condition of this Agreement, (ii) for Good
Reason as defined below or (iii) upon the occurrence of a Change
in Control as defined below.
For purposes of this Agreement "Good Reason" shall
mean continuation of any of the following after reasonable notice
by Xxxxxx to the Corporation that he believes any such action has
occurred:
1. The assignment to Xxxxxx of any duties
inconsistent with, or the reduction of powers or
functions associated with Xxxxxx'x position, title,
duties, responsibilities and status with the
Corporation as set forth herein, or as later agreed
upon by Xxxxxx and the Corporation;
2. Any removal of Xxxxxx from, or any
failure to re-elect Xxxxxx to, any position(s) or
office(s) Xxxxxx held immediately prior to such action;
3. A reduction by the Corporation in
Xxxxxx'x annual base Compensation;
4. The Corporation's transfer of Xxxxxx to
another geographic location from his present office
location, except for required travel on the
Corporation's business to an extent substantially
consistent with Xxxxxx'x business travel obligations
immediately prior to the date hereof;
5. The failure by the Corporation to
continue in effect any employee benefit plan, program
or arrangement (including, without limitation the
Corporation's retirement plan, benefit equalization
plan, life insurance plan, health and accident plan,
disability plan, deferred compensation plan or long
term stock incentive plan) in which Xxxxxx is
participating immediately prior to the date hereof
(except that the Corporation may institute or continue
plans, programs or arrangements providing Xxxxxx with
substantially similar benefits); the taking of any
action by the Corporation which would adversely affect
Xxxxxx'x participation in or materially reduce Xxxxxx'x
benefits under,
any of such plans, programs or arrangements; or the
failure to continue, or the taking of any action
which would deprive Xxxxxx, of any material fringe
benefit enjoyed by Xxxxxx immediately prior to the
date hereof; or
6. Any purported termination of Xxxxxx'x
employment by the Corporation during the term of this
Agreement which is not effected pursuant to all of the
requirements of this Agreement; and, for purposes of
this Agreement, no such purported termination shall be
effective.
For purposes of this Agreement, a "Change in
Control" shall mean and shall be deemed to have occurred, if at
any time during the Employment Period, directly or indirectly, in
one or a series of transactions:
1. Any person or group (as defined in
Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended, (15 U.S.C. 78m(d) and 15 U.S.C.
78(d)) or under the rules or regulations of the Federal
Home Loan Bank Board or of the Federal Deposit
Insurance Corporations) as in effect on the date hereof
other than Bancorp or Xxxxxx Xxxx has acquired:
(a) more than twenty (20%) percent
of the outstanding common
stock of the Bank or Bancorp,
or equivalent in voting power
of any class or classes of
outstanding securities of the
Bank or Bancorp ordinarily
entitled to vote in elections
of directors;
(b) irrevocable proxies
representing more than twenty
(20%) percent of any class of
voting stock of the Bank or
Bancorp;
(c) any combination of voting
stock and irrevocable proxies
representing more than twenty
(20%) percent of any class of
voting stock of the Bank or
Bancorp; or
(d) the ability to control in any
manner the election of a
majority of the directors of
the Bank or Bancorp;
2. The Xxxx/Xxxxxx family sells or
otherwise disposes of fifty (50%) percent or more of
the voting securities of the Bank or Bancorp
owned by such family as of the date Xxxxxx first
became employed by the Corporations to a nonfamily
member or members;
3. Any merger or consolidation of the Bank
or Bancorp into or with another entity has occurred and
the holders of a majority of the voting stock of the
surviving entity shall not have been shareholders of
Bancorp immediately prior to such transaction; or
4. Any transfer or sale of all or
substantially all of the assets of the Bank or Bancorp
has occurred.
D. TERMINATION BY CORPORATIONS. Notwithstanding
any other provisions of this Agreement, the Corporation shall be
entitled to terminate Xxxxxx'x employment with or without
"cause". For purposes of this Agreement, "cause" shall mean
(i) willful and continued failure by Xxxxxx to perform his duties
for the Corporation under this Agreement (as it may be modified
or supplemented in the event of a Change in Control) after at
least one warning in writing from the Corporation's Board of
Directors identifying specifically any such failure; (ii) the
willful engaging by Xxxxxx in misconduct which causes material
injury to the Corporation as specified in a written notice to
Xxxxxx from the Board of Directors; or (iii) conviction of a
crime, other than a traffic violation, habitual drunkenness, drug
abuse, or excessive absenteeism other than for illness, after a
warning (with respect to drunkenness or absenteeism only) in
writing from the Board of Directors to refrain from such
behavior. No act or failure to act on the part of Xxxxxx shall
be considered willful unless done, or omitted to be done, by
Xxxxxx not in good faith and without reasonable belief that the
action or omission was in the best interest of the Corporation.
4.2 NOTICE OF TERMINATION. Any purported termination
by the Corporations or by Xxxxxx in accordance with Section 4.1,
(excluding Section 4.1B) shall be communicated by written Notice
of Termination to the other party or parties hereto in accordance
with this Section 4.2. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Xxxxxx'x employment
under the provision so indicated.
4.3 DATE OF TERMINATION, ETC. "Date of Termination"
shall mean (a) if Xxxxxx'x employment is terminated for
Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the
performance of his duties on a full time basis during such 30-day
period), and (b) if his employment is terminated for any other
reason, the date specified in the Notice of Termination; provided
that if within thirty (30) days after a Notice of Termination is
given the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the
Date of Termination shall be the earlier of: (i) the date upon
which the dispute is finally determined by mutual agreement of
the parties or by a binding arbitration
award entered in accordance with Section 9 hereof; or, (ii) the
expiration of the Employment Period then existing under this
Agreement; provided, further, that the Date of Termination
shall be extended by a notice of dispute only if such notice
is given in good faith and the party giving such notice pursues
the resolution of such dispute with reasonable dispatch and
diligence. Notwithstanding the pendency of such dispute, the
Corporations will continue to pay Xxxxxx his full compensation
in effect when the notice giving rise to dispute was given
(including, but not limited to, base salary) and continue
him as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice
giving rise to the dispute was given as though termination
had not occurred, until the dispute is finally resolved in
accordance with this Section at which time the parties shall
adjust for any overpayment or underpayment made. Amounts paid
under this Section are in addition to the other amounts due
under this Agreement and unless specifically provided otherwise
shall not be offset against to reduce any other amounts
due under this Agreement.
5. TERMINATION BENEFITS
5.1 DISABILITY TERMINATION BENEFITS. Upon the
termination of Xxxxxx'x employment with the Corporations as a
result of "Disability" pursuant to Section 4.1A, the Corporations
shall pay to Xxxxxx a monthly disability benefit equal to one
hundred (100%) percent of his Base Salary, at the rate in effect
on the "Date of Termination", for a period of one year from and
after said date; provided, however, that any amounts payable
under this Section 5.1 shall be reduced by any amounts paid to
Xxxxxx under any other disability program or policy (other than
Social Security) maintained by the Bank or Bancorp. If the
amount of such disability insurance payments exceeds the amount
otherwise payable under this Section 5.1, Xxxxxx may retain the
entire amount of such disability insurance payments inclusive of
the excess, if any. Such payments shall be made by the
Corporations to Xxxxxx, or in the event of his subsequent death,
to his beneficiary or beneficiaries, or his estate, as the case
may be, in accordance with the customary payroll practices of the
Corporations.
During the period Xxxxxx is entitled to receive
payments from the Corporations under this Section 5.1, the
Corporations shall maintain or cause to be maintained life and
health insurance benefits for Xxxxxx at least equivalent to those
he had at the Date of Termination with any amendments and/or
alterations subsequently made equitably to all executive officers
of the Bank and/or Bancorp. During the period Xxxxxx is entitled
to receive payments from the Corporations under this Section 5.1
he shall not be considered an "employee" of the Corporations
except as respects any requirements specifically imposed by law
or as may otherwise be required to continue any insurance
benefits provided for this Section 5.1.
5.2 BENEFITS PAYABLE UPON DEATH. Within thirty
(30) days after the Date of Death, the Corporations shall pay to
Xxxxxx'x beneficiary or beneficiaries or his estate, as the case
may be, a lump sum benefit equal to three (3) times the monthly
rate of Xxxxxx'x Base Salary as in effect on the Date of Death.
5.3 BENEFITS PAYABLE UPON TERMINATION BY XXXXXX. In
the event that Xxxxxx terminates his employment with the
Corporations under Section 4.1 of this Agreement, the
Corporations shall pay to Xxxxxx within thirty (30) days of such
termination as severance a lump sum equal to the aggregate amount
of the future Base Salary, at the monthly rate then in effect,
Xxxxxx would have received if he continued in the employ of the
Corporations for the remainder of the Employment Period then
existing under this Agreement plus, if the Employment Period
shall not have been already extended pursuant to the terms of
Section 2.1 by reason of a vote of shareholders, an additional
twenty-four (24) months and the incentive bonuses to which he
would have otherwise been entitled during such period of time,
based on the average incentive bonus received by him during the
then two most recent fiscal years of the Corporations.
5.4 TERMINATION BY THE CORPORATIONS FOR CAUSE. If
Xxxxxx'x employment under this Agreement is terminated by either
the Bank or Bancorp for "cause" (as defined in Section 4.1D), or
if Xxxxxx voluntarily resigns his employment other than pursuant
to Section 4.1C, the Corporations shall pay to Xxxxxx his Base
Salary as then in effect that has accrued to the Date of
Termination. Unless otherwise determined by the Boards of
Directors of the Corporations, Xxxxxx shall have no right to
receive compensation or other benefits under this Agreement after
such a termination for "cause" or following a voluntary
resignation.
5.5 TERMINATION BY THE CORPORATIONS FOR OTHER THAN
CAUSE. If during the Employment Period the Bank or Bancorp or
both of them terminate Xxxxxx'x employment other than for "cause"
(as defined in Section 4.1D) or other than for the reasons
specified in Sections 1.3, 1.4, 1.5 and 1.6 of this Agreement,
then in such event the Corporations shall pay Xxxxxx, or in the
event of his subsequent death, his beneficiary or beneficiaries,
or his estate, as the case may be, as severance a lump sum equal
to the aggregate amount of the future Base Salary payments Xxxxxx
would have received if he continued in the employ of the
Corporations for the remainder of the then existing Employment
Period of this Agreement plus twenty-four (24) months at the
highest rate of Base Salary and bonus paid to Xxxxxx at any time
under this Agreement or within two years prior to the date
hereof. Xxxxxx shall not be required to mitigate damages by
seeking other employment and payments required to be made
hereunder shall not be reduced by any other income which Xxxxxx
may receive or by any setoffs or claims which may exist against
Xxxxxx for any reason whatsoever.
5.6 CERTAIN REDUCTION OF PAYMENTS BY THE CORPORATIONS.
A. Anything in this Agreement to the contrary
notwithstanding, prior to the payment of any lump sum amount
payable hereunder, by reason of termination related to a Change
of Control, the certified public accountants of the Corporations
immediately prior to a Change of Control (the "Certified Public
Accountants") shall
determine as promptly as practical and in any event within
20 business days following the termination of employment of
Xxxxxx whether any payment or distribution by the Corporations
to or for the benefit of Xxxxxx (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would more likely than
not be nondeductible by the Corporations for Federal income
purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and if it is then the aggregate
present value of amounts payable or distributable to or for the
benefit of Xxxxxx pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred
to as "Agreement Payments") shall be reduced (but not below zero)
to the "Reduced Amount". For purposes of this paragraph, the
"Reduced Amount" shall be an amount expressed in present value
which maximizes the aggregate present value of Agreement Payments
without causing any Payment to be nondeductible by the
Corporations because of said Section 280G of the Code.
B. If under paragraph A. of this section the
Certified Public Accountants determine that any Payment would
more likely than not be nondeductible by the Corporations because
of Section 280G of the Code, the Corporations shall promptly give
Xxxxxx notice to that effect and a copy of the detailed
calculation thereof and of the Reduced Amount, and Xxxxxx may
then elect, in his sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long as
after such election the aggregate present value of the Agreement
Payments equals the Reduced Amount), and shall advise the
Corporations in writing of his election within 20 business days
of his receipt of notice. If no such election is made by Xxxxxx
within such 20-day period, the Corporations may elect which and
how much of the Agreement Payments shall be eliminated or reduced
(as long as after such election the aggregate present value of
the Agreement Payments equal the Reduced Amount) and shall notify
Xxxxxx promptly of such election. For purposes of this
paragraph, present value shall be determined in accordance with
Section 280G(d)(4) of the Code. All determinations made by the
Certified Public Accountants shall be binding upon the
Corporations and Xxxxxx and shall be made within 20 business days
of a termination of employment of Xxxxxx. With the consent of
Xxxxxx, the Corporations may suspend part or all of the lump sum
payment due Xxxxxx hereunder until the Certified Public
Accountants finish the determination and Xxxxxx (or the
Corporations, as the case may be) elect how to reduce the
Agreement Payments, if necessary. As promptly as practicable
following such determination and the elections hereunder, the
Corporations shall pay to or distribute to or for the benefit of
Xxxxxx such amounts as are then due to Xxxxxx under this
Agreement and shall promptly pay to or distribute for the benefit
of Xxxxxx in the future such amounts as become due to Xxxxxx
under this Agreement.
C. As a result of the uncertainty in the application
of Section 280G of the Code, it is possible that Agreement
Payments may have been made by the Corporations which should not
have been made ("Overpayment") or that additional Agreement
Payments which will have not been made by the Corporations could
have been made ("Underpayment"), in each case, consistent with
the calculation of the Reduced Amount
hereunder. In the event that the Certified Public Accountants,
based upon the assertion of a deficiency by the Internal
Revenue Service against the Corporations or Xxxxxx which said
Certified Public Accountants believe has a high probability
of success, determines that an Overpayment has been made,
any such Overpayment shall be treated for all purposes as
a loan to Xxxxxx which Xxxxxx shall repay to the Corporations
together with interest at the applicable Federal rate provided
for in Section 7871(f)(2)(B) of the Code; provided, however,
that no amount shall be payable by Xxxxxx to the Corporations
to the extent such payment would not reduce the amount which
is subject to taxation under Section 4999 of the Code.
In the event that the Certified Public Accountants, based
upon controlling precedent, determine that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the
Corporations to or for the benefit of Xxxxxx together with
interest at the applicable Federal rate provided for in Section
7872(f)(2)(B) of the Code.
6. OTHER TERMINATION BENEFITS
6.1 INSURANCE. If Xxxxxx'x employment with the
Corporations shall be terminated either by Xxxxxx pursuant to the
provisions of Section 4.1C or by the Corporations or either of
them without "cause", the Corporations will continue or cause to
be continued life and health insurance coverage substantially
identical to the coverage maintained by the Corporations for
Xxxxxx prior to his severance. Xxxxxx shall contribute such
amounts towards such benefits as are required of all employees of
the Corporations so long as he receives such benefits.
6.2 SPECIAL RETIREMENT BENEFITS. If Xxxxxx'x
employment with the Corporations shall be terminated either by
Xxxxxx pursuant to the provisions of Section 4.1C or by the
Corporations or either of them without "cause", Xxxxxx shall be
entitled to receive "Special Retirement Benefits" from the
Corporations so that the total retirement benefits Xxxxxx
receives from the Corporations will approximate the total
retirement benefits Xxxxxx would have received under all
qualified retirement plans (which shall not include severance
plans) of the Corporations in which Xxxxxx participates were
Xxxxxx fully vested under such qualified retirement plans as if
Xxxxxx had continued in the employ of the Corporations for at
least sixty (60) consecutive months in the absence of early
termination or until his retirement. The benefits specified in
this Section 6.2 will include all ancillary benefits, such as
early retirement and survivor rights and benefits available at
retirement. The amount payable to Xxxxxx or his beneficiary(s)
under this Section 6.2 shall equal the excess of (1) the benefits
that would be paid to Xxxxxx or his beneficiaries, under all
retirement plans of the Corporations in which Xxxxxx participates
if Xxxxxx were fully vested under such plans or (2) the benefits
that are payable to Xxxxxx or his beneficiaries under all
retirement plans of the Corporations in which Xxxxxx
participates. These Special Retirement Benefits are provided on
an unfunded basis, are not intended to meet the qualification
requirements of Section 401 of the Internal Revenue Code and
shall be payable solely from the general assets of the
Corporations. These Special Retirement Benefits shall
be payable at the times and in the manner provided in the
applicable retirement plans to which they relate.
6.3 SPLIT DOLLAR INSURANCE. If pursuant to Section
4.1C Xxxxxx'x employment with the Corporations following a Change
in Control shall terminate, the Corporations shall continue to
pay the premium for and maintain the Broad National Bank Split
Dollar Life Insurance for and on behalf of Xxxxxx with coverage
of $500,000 until such time as said policy is fully paid.
6.4 USE OF VEHICLE. If pursuant to Section 4.1C
Xxxxxx shall terminate his employment with the Corporations
following a Change in Control, the Corporations shall at their
option provide Xxxxxx with the use of the late model car
specified in Section 3.4B for a period of twenty-four (24) months
following the Date of Termination or the reasonable value
corresponding to such usage; provided, however, that
notwithstanding the foregoing Xxxxxx may in lieu thereof elect to
purchase said vehicle at its then present value by providing the
Corporations with written notice of such election.
6.5 PAYMENTS UPON TERMINATION. Termination of this
Agreement on any grounds whatsoever will not affect the
obligations of the parties to make payment of any sums that have
accrued but remain unpaid at the effective date of such
termination.
7. SOURCE OF FUNDS
Except for those benefits payable directly from the
qualified retirement or pension plan of the Corporations or
either of them, all payments and benefits provided in Sections 3,
5 or 6 shall be paid to Xxxxxx or paid for on behalf of Xxxxxx
from the general funds of the Corporations and no special or
separate funds shall be established and no other segregation of
assets shall be made to assure payment. Xxxxxx shall have no
right, title or interest whatsoever in or to any investments
which the Corporations may make to aid them in meeting their
obligations hereunder.
8. FEDERAL INCOME TAX WITHHOLDING
The Corporations may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation
or ruling.
9. ARBITRATION
In the event that any claim, controversy, issue or
other dispute arises under this Agreement, the breach thereof,
the termination of Xxxxxx'x employment by the Corporations under
Section 4 of this Agreement, including any claim based in whole
or in part on federal or state constitutions, statutes or
regulations, local ordinances, the common law or public
policy, including, but not limited to Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act
of 1967, the Employee Retirement Income Security Act of 1974,
Americans with Disabilities Act, the Worker Adjustment and
Retraining Notification Act, the Employee Polygraph Protection
Act of 1988, the Occupational Safety and Health Act, the Fair
Labor Standards Act, the Civil Rights Act of 1971; the
Rehabilitation Act of 1973 and the Vietnam Era Veterans
Readjustment Assistance Act of 1974, or the amount of any
payments under Sections 5 or 6, if the claim, controversy,
issue or dispute is not settled by agreement among the parties,
the dispute shall be settled by a single arbitration conducted by
three arbitrators in the State of New Jersey, under the
auspices of, and in accordance with the applicable rules of, the
American Arbitration Association then in effect. One arbitrator
shall be selected by the Corporation, one arbitrator shall be
selected by Xxxxxx and the third arbitrator shall be selected by
the two selected in such manner. The decision of the arbitrators
shall be final and conclusive on the parties and judgment upon
such decision may be entered in any court having jurisdiction
thereof. The award of the arbitrators shall be in writing and
shall specify the factual and legal basis for the award.
Xxxxxx shall be entitled to reimbursement by the
Corporations for all reasonable legal and other professional fees
and expenses incurred by him in such arbitration or in enforcing
the award, including reasonable attorneys' fees. The parties
agree that resolution of any such claim, controversy, issue or
other dispute pursuant to the foregoing arbitration proceeding is
intended to be final and binding on them and any award rendered
by such arbitration shall constitute a complete, final and
binding adjudication of any and all legal or factual issues
pertaining to or arising out of the matter that gave rise to the
controversy or dispute. The provisions of this Article 9 shall
survive the termination of this Agreement for any reason
whatsoever.
10. CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement shall preclude the
Corporations or either of them from consolidating or merging into
or with, or transferring all or substantially all of their assets
to, another corporation which assumes this Agreement and all
obligations and undertakings of the Corporations hereunder.
11. POST-TERMINATION COVENANTS
11.1 COVENANT NOT TO COMPETE. Xxxxxx covenants and
agrees that, in consideration of the amounts to be paid and
benefits to be provided to Xxxxxx hereunder, for a period of
twelve (12) months following the termination of his employment
with the Corporations pursuant to Sections 4.1A, 4.1C or 4.1D,
Xxxxxx shall not be employed as an executive officer of, shall
not control, manage or otherwise participate in the management
of, any other financial institution having its principal
headquarters and/or executive offices in the County of Essex,
State of New Jersey, or of a company that owns or controls a
majority of the voting securities of any such financial
institution. The term "financial institution" shall mean and
include any bank, savings bank, savings and loan association or
credit union.
11.2 In the event of a Change in Control, either before
or after a Date of Termination, Article 11 shall in its entirety
become legally inoperative and Xxxxxx will no longer be bound by
any of the covenants contained therein.
11.3 SOLICITATION OF EMPLOYEES. Xxxxxx covenants and
agrees that, in consideration of the amounts to be paid and
benefits to be provided to Xxxxxx hereunder, for a period of
twelve (12) months following the termination of his employment
with the Corporations irrespective of the time, manner or cause
of said termination, Xxxxxx shall not solicit any employee of the
Bank or Bancorp to leave its or their employ or join the
employment of, or employ, or permit any business of which he is
an owner, partner, substantial shareholder or principal executive
to solicit the employment of or employ, any person who is
employed by the Bank or Bancorp or has been employed by the Bank
or Bancorp within two (2) years prior to the time of such
solicitation of employment.
11.4 COVENANTS TO SURVIVE. The parties hereto agree
and acknowledge that except as provided in Section 11.2 above,
the terms of this Article 11 and of Article 20 shall survive the
termination of this Agreement for any reason whatsoever.
12. ENTIRE AGREEMENT
This writing shall constitute the entire Agreement of
the parties as to the employment and compensation of Xxxxxx by
the Corporations, and shall supersede any and all prior
agreements and understandings, whether they be oral or in
writing; provided that this Agreement shall not supersede the
Prior Agreement until the Commencement Date hereof.
13. SEVERABILITY
If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not effect any other
provision of this Agreement not held so invalid, and each such
other provision shall to the full extent consistent with law
continue in full force and effect. If any provision of this
Agreement shall be held invalid in part, such invalidity shall in
no way affect the rest of such provision not held so invalid and
the rest of such provision together with all provisions of this
Agreement shall to the full extent consistent with law continue
in full force and effect.
14. AMENDMENT OF AGREEMENT
This Agreement may not be modified or amended except by
an instrument in writing signed by the parties hereto.
15. WAIVER
No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by a
written instrument executed by the party charged with such waiver
or estoppel. No such written waiver shall be deemed a continuing
waiver unless specifically stated therein, and each waiver shall
operate as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future nor
as to any act other than that specifically waived.
16. HEADINGS
Headings used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
17. BINDING EFFECT AND GOVERNING LAW
All of the terms and provisions of this Agreement shall
be binding upon, shall inure to the benefit of, and be
enforceable by and against Xxxxxx and his executors,
administrators and heirs and Broad National Bank and Broad
National Bancorporation and their respective permitted successors
and assigns. This Agreement has been executed and delivered in
the State of New Jersey and its validity, interpretation,
performance and enforcement shall be governed by the laws of said
State.
18. NO ATTACHMENT
Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation,
communication, alienation, sale, assignment, encumbrance, charge,
pledge or hypothecation or to execution, attachment, levy or
similar process or assignment by operation of law, and any
attempt to voluntarily or involuntarily effect any such action
shall be null, void and of no effect.
19. NONASSIGNABILITY
Neither this Agreement nor any right or interest
hereunder shall be assignable by Xxxxxx, his beneficiaries or
legal representative without the Corporations' prior written
consent; provided, however, that nothing in this Section 19 shall
preclude (a) Xxxxxx from designating a beneficiary to receive any
benefit payable hereunder upon his death, or (b) the executors,
administrators or other legal representatives of Xxxxxx or his
estate from assigning any rights hereunder to the person or
persons entitled thereto.
20. CONFIDENTIAL INFORMATION
20.1 Xxxxxx shall not, directly or indirectly, during
the term of his employment hereunder and any time after
termination of his employment for any reason, to
the detriment of the Corporations, knowingly divulge, disclose,
disseminate, publish, reveal or otherwise communicate to any
unauthorized person any Confidential Information relating to
the Corporations or to any of the businesses operated by them.
20.2 Xxxxxx confirms that the Confidential Information
constitutes the exclusive property of the Corporations. Upon
termination of his employment hereunder, Xxxxxx will promptly
return to the Corporations all materials (whether prepared by
Xxxxxx or others) containing, constituting, embodying or
illustrating Confidential Information, and all other property of
the Corporations then in his possession or custody.
20.3 As used in this Article 20, the following terms
shall have the following meanings:
A. The term "Confidential Information" means
information disclosed to Xxxxxx or known to Xxxxxx as a
consequence of or through his employment by the Corporations and
not generally known in the banking industry. Such information
includes, but is not limited to, information relating to the
Corporations' products, research, developments, accounting,
finances, marketing, merchandising and selling, and specifically
includes future business plans, client list, applicant list, and
training and operating methods and techniques. The term
"Confidential Information" does not include information which
(i) at the time it was received by Xxxxxx was generally available
to the public; (ii) prior to its use by Xxxxxx, becomes generally
available to the public through no act or failure of Xxxxxx;
(iii) prior to its becoming known to Xxxxxx as a consequence of
or through his employment by the Corporations, was otherwise
known to Xxxxxx; or (iv) is received by Xxxxxx from a person who
is not a party to this Agreement and who was not under an
obligation of confidence with respect to such information.
B. "Materials" includes, but is not limited to,
books, notebooks, documents, records, photographs, films, video
tapes, audio recordings, discs, diskettes, or other electronic or
optical storage media, software and support materials, and
similar or other materials.
20.4 Xxxxxx shall not otherwise knowingly act or
conduct himself (a) to the material detriment of the
Corporations, or (b) in a manner which is inimical or contrary to
the interest thereof.
IN WITNESS WHEREOF, the Corporations have caused this
Agreement to be executed and their respective seals to be affixed
hereunto by their duly authorized officers, and Xxxxxx, has
signed this Agreement, all as of the date first written above.
BROAD NATIONAL BANK, a national banking association
organized under the laws of the United States of America, hereby
acknowledges and agrees to be bound to the extent applicable by
the terms of the Employment Agreement dated October 1, 1995
between XXXX X. XXXXXX and BROAD NATIONAL BANCORPORATION and
guarantees payments and performance of the terms of said
agreement to the extent permitted by the laws of New Jersey and
the laws of the United States of America.
ATTEST: BROAD NATIONAL BANCORPORATION
_________________________ By: ______________________________
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxx
Title: Secretary Title: Chairman & CEO
ATTEST: BROAD NATIONAL BANK
_________________________ By: ______________________________
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxx
Title: Secretary Title: Chairman & CEO
WITNESS:
_________________________ By: ______________________________
Name: XXXX X. XXXXXX
