EMPLOYMENT AGREEMENTS
This document is an employment agreement between Somerset Valley Bank,
a banking corporation organized under the laws of the State of New Jersey, with
offices at 000 Xxxx Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (referred to as
"the Bank"), and Xxxxxx X. Xxxxxxxx, residing at 00 Xxxxxxx Xxxxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000 (referred to as "the Executive").
1. The background of this agreement. Prior to the effective date of
this agreement, the Executive was employed by the Bank as the Bank's President
and Chief Executive Officer. The sank desires to retain the Executive in this
position and the Executive desires to be employed by the Bank in this position,
subject to the terms and conditions stated in this agreement.
2. Employment. The Bank employs the Executive as President and Chief
Executive Officer. The duties of the position of President and Chief Executive
Officer are stated in the corporate by-laws of the Bank. The Executive will
perform these duties. The Executive represents that the Executive has received
and read a copy of the by-laws of the sank.
3. Employee at will. The Executive is an employee at will. The Bank and
the Executive each is entitled to terminate the Executive's employment by the
Bank at any time for any reason or for no reason. If the Executive's employment
by the Bank is terminated by either party, then whether or not the sank will be
obligated to provide severance benefits to the Executive will be governed by
section 6 of this agreement.
4. Compensation.
4.a. The Bank will pay to the Executive a base annual salary of
$130,000 until the first anniversary of the effective date of this agreement.
4.b. After the first anniversary of the effective date of this
agreement, the annual base salary will be increased, and not deceased, annually
in an amount determined by the Board of Directors of the Bank after the Board
reviews the recommendation of the Board's Compensation Committee.
4.c. The Bank will pay the Executive an annual bonus in an
amount determined from time to time by the Board of Directors of the Bank
after the Board reviews the recommendations of the Board's Compensation
Committee.
5. Benefits.
5.a. Reimbursement of reasonable expenses. The sank will
reimburse the Executive for all necessary and reasonable expenses that are
incurred by the Executive in performing the Executive's duties under this
agreement, including the reasonably costs of entertainment, travel, meals and
other expenses incurred by the Executive in marketing the Bank's products and
programs and establishing business relationships with potential sank customers.
The Executive will regularly submit itemized vouchers and receipts and other
supporting documents to verify expenses as reasonably required by the Bank, in
accordance with policies and procedures that are established from time to time
by the Board of Directors of the Bank. The Bank will reimburse the Executive for
these expenses promptly after receiving the itemized vouchers and supporting
documents.
5.b. Club membership. The Bank will provide the Executive with
house membership in the Raritan Valley Country Club for use by the Executive
primarily in carrying out the Executive's duties in furthering the Bank's
business interests.
5.c. Automobile. The Bank will provide the Executive with an
automobile for use by the Executive primarily in carrying out the Executive's
duties in furthering the Bank's business interests. The sank will pay for the
maintenance and repair of the automobile. The Board of Directors of the Bank
will, from time to time, establish a policy governing the types of automobiles
that will be provided for use by the management staff of the Bank, and the
automobile that will be provided to the Executive under this agreement will be
in accordance with the Board's policy.
5.d. Vacations. The Executive will be entitled to annual paid
vacations in conformity with the Bank's regular policies and practices, as
determined from time to time by the Board of Directors of the sank.
5.e. Medical insurance. The Bank will continue to provide the
Executive with the medical insurance coverage that is substantially comparable
to the medical insurance coverage that the Bank currently provides to the
Executive, including coverage of the Executive's spouse and dependent children.
5.f. Disability insurance. The Bank will provide the Executive
with disability insurance coverage in accordance with any benefit plans for the
Bank's eligible employees that may be established from time to time by the
Bank's Board of Directors.
5.g. Life insurance. The Bank will provide the Executive with
group life insurance coverage in accordance with any benefit plans for the
Bank's eligible employees that may be established from time to time by the
Bank's Board of Directors. While the Executive is employed by the Bank under
this agreement, the Bank also will pay all the premiums, as they come due after
the effective date of this agreement, for the life insurance policies that are
described in Exhibit A that is attached to this agreement, or for other policies
or plans that provide substantially comparable benefits to the Executive.
5.h. Working facilities. The sank will provide the Executive with
a secretary and with a personal office and other working facilities and
amenities that are substantially comparable to those which are presently
provided to the Executive.
6. Termination of the Executive's employment.
6.a. Death or disability. The employment of the Executive by the
Bank under this agreement will terminate automatically on the death or total
permanent disability of the Executive. Total permanent disability will be
determined by the disability insurance company that provides disability
insurance coverage for the Executive.
6.b. Termination by the Bank without cause. The Bank is entitled
to terminate the Executive's employment by the Bank at any time without cause by
giving the Executive notice in writing thirty days before the date on which the
termination of the Executive's employment is to become effective. If the Bank so
directs, the Executive will cease performing the Executive's duties as President
and Chief Executive Officer immediately after the notice is given and the
Executive will be paid the compensation otherwise due under this agreement until
the date on which the Executive's employment terminates. If the sank terminates
the Executive's employment without cause, then the Bank will pay to the
Executive, in twenty-four equal monthly installments beginning on the first day
of the first full calendar month after the date on which the Executive's
employment terminates, a severance allowance equal to two times the Executive's
base annual salary that is in effect at the time that the notice of termination
is given to the Executive. The Bank's obligation to pay this severance allowance
will not be affected regardless of when the Executive obtains other employment
after the Executive's employment by the Bank terminates. If the Bank terminates
the Executive's employment without cause, then the Bank will continue to provide
the Executive with life insurance coverage that is substantially comparable to
any group life insurance coverage that may be provided for the Bank's eligible
employees from the date on which the Executive's employment terminates until the
earlier to occur of (i) the second anniversary of the date on which the
Executive's employment terminates, or (ii) the date on which the Executive
obtains substantially comparable life insurance coverage from another employer.
If the Bank terminates the Executive's employment without cause, then the Bank
also will pay all the premiums for the life insurance policies that are
described in Exhibit A that is attached to this agreement for other policies or
plans that provide substantially comparable benefits to the Executive) as those
premiums come due for two years after the date on which the Executive's
employment terminates. If the Bank terminates the Executive's employment without
cause, then Bank will continue to provide the Executive with medical insurance
coverage (including coverage of the Executive's spouse and dependent children)
that is substantially comparable to the medical insurance coverage provided to
the Bank's eligible employees until the earlier to occur of (i) the second
anniversary of the date on which the Executive's employment terminates, or (ii)
the date on which the Executive obtains substantially comparable medical
insurance coverage from another employer. If the Bank terminates the Executive's
employment without cause, then the Bank will continue to provide the Executive
with disability insurance coverage that is substantially comparable to any
disability insurance coverage that may be provided for the Bank's eligible
employees from the date on which the Executive's employment terminates until the
earlier to occur of (i) the second anniversary of the date on which the
Executive's employment terminates, or (ii) the date on which the Executive
obtains substantially comparable disability insurance coverage from another
employer.
6.c. Termination by the Bank for cause. The Bank is entitled to
terminate the Executive's employment by the sank at any time for cause by giving
the Executive notice in writing thirty days before the date on which the
termination of the Executive's employment is to become effective. The notice
will include a statement describing the cause of the termination of employment.
If the Bank so directs, the Executive will cease performing the Executive's
duties as President and Chief Executive Officer immediately after the notice is
given and the Executive will be paid the compensation otherwise due under this
agreement until the date on which the Executive's employment terminates. The
Executive will have no right to receive a severance allowance, benefits, or any
other compensation under this agreement after the effective date of termination
of employment by the Bank for cause. Termination for cause includes termination
because of the Executive's personal dishonesty, willful breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties as
described in this agreement, willful insubordination with respect to the lawful
directions of the board of directors of the Bank, conviction of any crime (other
than traffic violations or similar offenses) or willful violation of any final
cease-and-desist order, or material breach of any provision of this agreement.
6.d. Resignation by the Executive for good reason. The Executive
will have the right to resign as President and Chief Executive Officer of the
Bank and terminate the Executive's employment for good reason by giving notice
to the Bank at least thirty days before the date on which the termination of the
Executive's employment is to become effective. The notice will include a
statement describing what the Executive asserts is the good reason for the
Executive's resignation. If the Executive resigns for good reason, then the Bank
will provide the Executive with the same severance allowance and other benefits
that are described in paragraph 6.b of this agreement. If the Executive resigns
for good reason, then the Bank also will pay to the Executive on the last day of
the calendar year in which the Executive resigns, an additional severance
allowance equal to the annual average of the annual bonus payments, if any, paid
to the Executive under this agreement for the three full calendar years
immediately preceding the year in which the Executive resigns. If the Executive
resigns for good reason before January 1, 1999, then the amount of this
additional severance allowance will be equal to the annual average of the annual
bonus payments, if any, paid to the Executive under this agreement for any full
calendar years immediately preceding the year in which the Executive resigns.
The Bank~s obligation to pay this additional severance allowance will not be
affected regardless of when the Executive obtains other employment after the
Executive's employment by the Bank terminates. Resignation by the Executive for
good reason means only the following: A resignation by the Executive within 180
days after (a) a change in the Executive's duties, title, position or working
conditions that is materially detrimental to the Executive, or (b) a material
breach by the Bank of the Bank's obligations under this agreement, or (c) a
change in the control of the sank. Nothing else will constitute resignation by
the Executive for good reason for the purposes of this agreement. For the
purposes of this agreement, a change in the control of the sank will be deemed
to have occurred only if any one or more of the following occur: (a) If the Bank
merges into another entity; or (b) if all (or substantially all) of the assets
of the Bank are transferred, exchanged, or sold; or (c) if, at any time after
January 1, 1996, during any period of two consecutive years, persons who
constitute at least a majority of the Board of Directors of Bank were not
members of the Board of Directors of the Bank at the beginning of that two-year
period. Nothing else will constitute a change in the control of the sank for the
purposes of this agreement.
6.e. Resignation by the Executive without good reason. The
Executive will have the right to resign as President and Chief Executive Officer
of the sank and terminate the Executive's employment without good reason by
giving notice to the Bank at least thirty days before the date on which the
termination of the Executive's employment is to become effective. If the Bank so
directs, the Executive will cease performing the Executive's duties as President
and Chief Executive Officer immediately after the notice is given and the
Executive will be paid the compensation otherwise due under this agreement until
the date on which the Executive's employment terminates. If the Executive
resigns without good reason, then the Executive will have no right to receive a
severance allowance, benefits, or any other compensation under this agreement
after the effective date of the resignation by the Executive without good
reason.
6.f. Retirement. Unless otherwise expressly agreed by the Bank
and the Executive, the Executive's employment by the Bank will terminate
immediately upon the Executive attaining the normal retirement age that is
defined in the Bank's retirement benefits plan. If the Executive's employment by
the Bank terminates by reason of the Executive reaching the Bank's normal
retirement age, then the Executive will have no right to receive a severance
allowance, benefits, or any other compensation under this agreement after the
effective date of termination of the Executive's employment by the sank.
6.g. Procedures for termination for cause. Before the Bank gives
notice terminating the Executive's employment by the Bank for cause, the Bank
first will give the Executive written notice of the occurrence of, and a
description of, the acts that constitute cause and a reasonable opportunity to
be heard by the Board of Directors of the Bank.
6.h. Arbitration; lawyers' fees and arbitration expenses. If
there is any dispute as to whether there is cause for termination by the sank of
the Executive's employment, or if there is any dispute as to whether there is
good reason for the Executive's resignation, then the dispute will be submitted
to arbitration that will be conducted in New Jersey by a single arbitrator in
accordance with the rules of the American Arbitration Association. It is not
mandatory that any other dispute arising under this agreement be submitted to
arbitration. Any arbitration under this agreement must be commenced with ninety
days after the effective date of the termination of employment. If the Bank
terminates the Executive's employment for cause, and if the Executive does not
commence arbitration within ninety days after the effective date of termination
of employment, then the Executive will be deemed to have irrevocably waived all
claims against the Bank under this agreement and to have irrevocably accepted
the Bank's statement of cause for the termination. If the Executive resigns for
good reason, and if the Bank does not commence arbitration within ninety days
after the effective date of termination of employment, then the sank will be
obligated to provide the severance allowance and other benefits described in
paragraph 6.b and will be deemed to have irrevocably accepted the Executive's
statement of good reason for the Executive's resignation. The party that does
not prevail in the arbitration will pay to the prevailing party the prevailing
party's costs for lawyers' fees and other arbitration expenses, and that amount
will be included in the arbitration award.
7. Restrictive covenant. The Bank and the Executive acknowledge that
the Executive has developed good will for the Bank in the form of business
relationships with the Bank's customers, and that the Executive has gained
knowledge of the Bank's particular methods of sales, marketing, administration,
systems, customer lists and other business methods, all of which are proprietary
in nature, belonging exclusively to the Bank. The sank and the Executive
acknowledge that if the Executive uses the Bank's good will or the Bank's
proprietary information on behalf of others, or transfers the Bank's good will
or proprietary information to others, these actions would have a materially
adverse affect on the Bank. Therefore, during the Executive's employment by the
Bank the Executive will devote all of the Executive's working time exclusively
to the Bank, and for a period of one year after the Executive's employment by
the Bank terminates (except for a resignation by the Executive for good reason),
the Executive will not become employed in a senior executive position by any
banking institution in Somerset County, New Jersey, or in Hunterdon County, New
Jersey. The Executive acknowledges that there is no adequate remedy at law for a
breach of this restrictive covenant, and that if the Executive breaches this
restrictive covenant (or attempts or threatens a breach) the Bank will be
entitled to an injunction, without prejudice to the sank's right to obtain
damages and other remedies. The sank will be entitled to maintain an action in
court to enforce this restrictive covenant (by an injunction or other remedies)
without first submitting to arbitration the issue of whether the Executive
resigned for cause, and that issue will be tried as part of any action that may
be brought by the sank to enforce this restrictive covenant. If a court
determines that the duration, scope or nature of these restrictions are too
broad, the restrictions will be deemed to be confined to the extent that the
court determines to be reasonable and appropriate under the circumstances. If
the Bank prevails in a suit to enforce this restrictive covenant with an
injunction or other any other remedy, then the Executive will pay to the Bank
the cost of the Bank's lawyers' fees and other litigation expenses.
8. Indemnification. The sank will indemnify and hold the Executive
harmless from and against all claims and actions against the Executive arising
from actions by the Executive on behalf of the Bank taken by the Executive in
good faith, consistent with the applicable provisions of the Bank's charter and
by-laws and with applicable statutes and regulations.
9. Compliance with 12 C.F.R. .6364. The obligation of the Bank to pay
compensation and post-employment benefits to the Executive under this agreement
is subject to applicable prohibitions against excessive compensation, and
against compensation that could lead to material financial loss, as unsafe and
unsound practices under the Interagency Guidelines Establishing Standards for
Safety and Soundness adopted as Appendix A under 12 C.F.R. 5364 (and any similar
regulatory provisions that may become applicable to the sank in the future~. If
there is any consistency between the provisions of this section 9 and any other
clause in this agreement, then the provisions in this section 9 will prevail.
10. Leqal counsel. This agreement was prepared by the law firm of
DiFazio, Radom, Wetter & Xxxxxxx. The law firm prepared this agreement at the
Bank's request and not on behalf of the Executive. The Executive recognizes that
the law firm of DiFazio, Radom, Wetter & Xxxxxxx has not represented the
Executive with respect to this agreement and the Executive acknowledges that the
Executive has been advised to obtain separate legal counsel regarding this
agreement. The Bank will indemnify and hold the law firm of DiFazio, Radom,
Wetter & Xxxxxxx harmless from and against any claims asserted by the Executive
predicated on the law firm~s preparation of this agreement.
11. Notices. All notices that are given under this agreement will be in
writing. A notice will be considered to have been delivered to a party three
business days after the notice is sent to the party, at the address for that
party stated in this agreement by certified mail, return receipt requested,
postage pre-paid. A notice sent by any other means will be considered to have
been delivered when the notice is actually received. A party may change the
party's address for receiving notices under this agreement by notifying the
other party in writing of the address change.
12. Supersedinq effect; entire agreement: amendments. This agreement
supersedes all other written and oral contracts, agreements, understandings and
promises made by or between the Bank and the Executive. The entire agreement
between the sank and the Executive is contained in this document, which consists
of 13 pages and a one-page document that is attached as Exhibit A. No other
agreements, understandings, or promises have been made by or between the Bank
and the Executive. Neither party is relying on any statements, promises or
representations that are not expressly stated in this document. This agreement
may not be amended except by a writing that is signed by the Bank and the
Executive. The rights and obligations of the parties under this agreement will
remain in effect indefinitely unless and until this agreement is terminated or
otherwise amended by the mutual agreement of the Bank and the Executive.
13. Parties who are bound and benefited. This agreement will inure to
the benefit of, and will be binding on, the parties and their respective
successors and assigns. The services to be provided by the Executive under this
agreement are personal and the Bank's right to receive those services will not
be assigned by the sank and any assignment will be void. The Executive's duties
under this agreement will not be delegated by the Executive and any delegation
will be void. The Executive's rights under this agreement will not be assigned
by the Executive and any assignment will be void.
14. Non-waiver of rights. Any delay or failure by either party to
exercise any right under this agreement, or a partial or single exercise of any
right under this agreement, will not constitute a waiver of that right or any
other right under this agreement. No waiver of any right under this agreement
will be effective unless the waiver is expressly stated in a writing that is
signed by the party making the waiver.
15. Governing law. This agreement will be governed by, and construed
and enforced in accordance with, the laws of the State of New Jersey.
16. Effective date. The Bank caused this agreement to be signed, sealed
and delivered on its behalf by the chairman of the Board of Directors, effective
as of January l, 1996. The Executive signed, sealed and delivered this
agreement, effective as of January 1, 1996.
Somerset Valley Bank
Attest:
/s/Xxxxxxxxxx Xxxxxx /s/Xxxx Xxxxxxx
-------------------- ----------------
Xxxxxxxxxx Xxxxxx Xxxx Xxxxxxx
Secretary Chairman of the
Board of Directors
/s/Xxxxxx X. Xxxxxxxx /s/Xxxxxxx X. Xxxxxx, Xx.
--------------------- -------------------------
Xxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxx, Xx.,
Witness
Schedule A
(Additional Insurance Benefits Schedule)
Principal Financial
Policy #3547069 $ 109,785 Adjustable Life
1996 $1,239.32 309 per quarter
1997 $1,239.32 309 per quarter
Policy #3730666 $ 75,000 One Year Term
Premium 1996 $ 1,030.50 Annual
1997 $ l,112.50 Annual
Prudential
Policy #00-000-000 Term
Premium 1996 $ 1,844 461 per quarter
1997 $ 2,012 503 per quarter
Total Cost Per Contract Year
1996 $ 4,113.82
1997 $ 4,363.82
Acknowledged:
/s/Xxxx X. Kitchen
------------------
Xxxx X. Kitchen
Chairman
/s/Xxxxxx X. Xxxxxxxx
---------------------
Xxxxxx X. Xxxxxxxx
President
EMPLOYMENT AGREEMENT
This document is an employment agreement between SOMERSET VALLEY BANK.
a banking corporation organized under the laws of the State of New Jersey, with
offices at 000 Xxxx Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (referred to as
"the Bank"), and XXXXXX XXXXXXXX , residing at 0 Xxxxxxx Xxxxx Xxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 (referred to as "the Executive").
1. The background of this agreement. Prior to the effective date of
this Agreement, the Executive was employed by the Bank as the Bank's Senior Vice
President and Chief Lending Officer. The Bank desires to retain the Executive in
this position and the Executive desires to be employed by the Bank in this
position, subject to the terms and conditions stated in this Agreement.
2. Employment. The Bank employs the Executive as its Senior Vice
President and Chief Lending Officer. The duties of the position of Chief Lending
Officer are stated in the corporate by-laws of the Bank. The Executive will
perform these duties. The Executive represents that the Executive has received
and read a copy of the by-laws of the Bank.
3. Employee at will. The Executive is an employee at will. The Bank and
the Executive each is entitled to terminate the Executive's employment by the
Bank at any time for any reason or for no reason. If the Executive's employment
by the Bank is terminated by either party, then whether or not the Bank will be
obligated to provide severance benefits to the Executive will be governed by
section 6 of this Agreement.
4. Compensation.
(a) The Bank will pay to the Executive a base annual salary of
$82,000.00 until the first anniversary of the effective date of this Agreement.
(b) After the first anniversary of the effective date of this
Agreement, the annual base salary will be increased, and not decreased, annually
in an amount determined by the Board of Directors of the Bank after the Board
reviews the recommendation of the Board's Compensation Committee.
(c) The Bank will pay the Executive an annual bonus in an amount
determined from time to time by the Board of Directors of the Bank after the
Board reviews the recommendations of the Board's Compensation Committee.
5. Benefits.
(a) Reimbursement of reasonable expenses. The Bank will reimburse the
Executive for all necessary and reasonable expenses that are incurred by the
Executive in performing the Executive's duties under this Agreement, including
the reasonable costs of entertainment, travel, meals and other expenses incurred
by the Executive in marketing the Bank's products and programs and establishing
business relationships with potential Bank customers. The Executive will
regularly submit itemized vouchers and receipts and other supporting documents
to verify expenses as reasonably required by the Bank, in accordance with
policies and procedures that are established from time to time by the Board of
Directors of the Bank. The Bank will reimburse the Executive for these expenses
promptly after receiving the itemized vouchers and supporting documents.
(b) Club membership. The Bank may provide the Executive, at its sole
discretion, with a golf membership or a country club membership of the Bank's
choosing for use by the Executive primarily in carrying out the Executive's
duties in furthering the Bank's business interests.
(c) Automobile. The Bank will provide the Executive with an automobile
for use by the Executive primarily in carrying out the Executive's duties in
furthering the Bank's business interests. The Bank will pay for the maintenance
and repair of the automobile. The Board of Directors of the Bank will, from time
to time, establish a policy governing the types of automobiles that will be
provided for use by the management staff of the Bank, and the automobile that
will be provided to the Executive under this Agreement will be in accordance
with the Board's policy.
(d) Vacations. The Executive will be entitled to annual paid vacations
in conformity with the Bank's regular policies and practices, as determined from
time to time by the Board of Directors of the Bank.
(e) Medical insurance. The Bank will continue to provide the Executive
with the medical insurance coverage that is substantially comparable to the
medical insurance coverage that the Bank currently provides to the Executive,
including coverage of the Executive's spouse and dependent children.
(f) Disability insurance. The Bank will provide the Executive with
disability insurance coverage in accordance with any benefit plans for the
Bank's eligible employees that may be established from time to time by the
Bank's Board of Directors.
(g) Life insurance. The Bank will provide the Executive with group life
insurance coverage in accordance with any benefit plans for the Bank's eligible
employees that may be established from time to time by the Bank's Board of
Directors. (h) Working facilities. The Bank will provide the Executive with a
secretary and with a personal office and other working facilities and amenities
that are substantially comparable to those which are presently provided to the
Executive.
6. Termination of the Executive's employment.
(a) Death or disability. The employment of the Executive by the Bank
under this Agreement will terminate automatically on the death or total
permanent disability of the Executive. Total permanent disability will be
determined by the disability insurance company that provides disability
insurance coverage for the Executive.
(b) Termination by the Bank without cause. The Bank is entitled to
terminate the Executive's employment by the Bank at any time without cause by
giving the Executive notice in writing thirty (30) days before the date on which
the termination of the Executive's employment is to become effective. If the
Bank so directs, the Executive will cease performing the Executive's duties as
Senior Vice President and Chief Lending Officer immediately after the notice is
given and the Executive will be paid the compensation otherwise due under this
Agreement until the date on which the Executive's employment terminates. If the
Bank terminates the Executive's employment without cause, then the Bank will pay
to the Executive, in twelve equal monthly installments beginning on the first
day of the first full calendar month after the date on which the Executive's
employment terminates, a severance allowance equal to the Executive's base
annual salary that is in effect at the time that the notice of termination is
given to the Executive. The Bank's obligation to pay this severance allowance
will not be affected regardless of when the Executive obtains other employment
after the Executive's employment by the Bank terminates. If the Bank terminates
the Executive's employment without cause, then the Bank will continue to provide
the Executive with life insurance coverage that is substantially comparable to
any group life insurance coverage that may be provided for the Bank's eligible
employees from the date on which the Executive's employment terminates until the
earlier to occur of (i) the first anniversary of the date on which the
Executive's employment terminates, or (ii) the date on which the Executive
obtains substantially comparable life insurance coverage from another employer.
If the Bank terminates the Executive's employment without cause, then the Bank
will continue to provide the Executive with medical insurance coverage
(including coverage of the Executive's spouse and dependent children) that is
substantially comparable to the medical insurance coverage provided to the
Bank's eligible employees until the earlier to occur of (i) the first
anniversary of the date on which the Executive's employment terminates, or (ii)
the date on which the Executive obtains substantially comparable medical
insurance coverage from another employer. If the Bank terminates the Executive's
employment without cause, then the Bank will continue to provide the Executive
with disability insurance coverage that is substantially comparable to any
disability insurance coverage that may be provided for the Bank's eligible
employees from the date on which the Executive's employment terminates until the
earlier to occur of (i) the first anniversary of the date on which the
Executive's employment terminates, or (ii) the date on which the Executive
obtains substantially comparable disability insurance coverage from another
employer.
(c) Termination by the Bank for cause. The Bank is entitled to
terminate the Executive's employment by the Bank at any time for cause by giving
the Executive notice in writing thirty (30) days before the date on which the
termination of the Executive's employment is to become effective. The notice
will include a statement describing the cause of the termination of employment.
If the Bank so directs, the Executive will cease performing the Executive's
duties as Senior Vice President and Chief Lending Officer immediately after the
notice is given and the Executive will be paid the compensation otherwise due
under this Agreement until the date on which the Executive's employment
terminates. The Executive will have no right to receive a severance allowance,
benefits, or any other compensation under this Agreement after the effective
date of termination of employment by the Bank for cause. Termination for cause
includes termination because of the Executive's personal dishonesty, willful
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties as described in this Agreement, willful insubordination
with respect to the lawful directions of the Board of Directors of the Bank,
conviction of any crime (other than traffic violations or similar offenses) or
willful violation of any final cease-and-desist order, or material breach of any
provision of this Agreement.
(d) Resignation by the Executive for good reason. The Executive will
have the right to resign as Senior Vice President and Chief Lending Officer of
the Bank and terminate the Executive's employment for good reason by giving
notice to the Bank at least thirty (30) days before the date on which the
termination of the Executive's employment is to become effective. The notice
will include a statement describing what the Executive asserts is the good
reason for the Executive's resignation. If the Executive resigns for good
reason, then the Bank will provide the Executive with the same severance
allowance and other benefits that are described in paragraph 6(b) of this
Agreement except in the event of a change of control in which event the
severance benefits will be increased to two times the Executive's annual base
salary in twenty-four equal monthly installments. If the Executive resigns for
good reason, then the Bank also will pay to the Executive on the last of the
calendar year in which the Executive resigns, an additional severance allowance
equal to the annual average of the annual bonus payments, if any, paid to the
Executive under this Agreement for the three full calendar years immediately
preceding the year in which the Executive resigns. If the Executive resigns for
good reason before January 1, 1999, then the amount of this additional severance
allowance will be equal to the annual average of the annual bonus payments, if
any, paid to the Executive under this Agreement for any full calendar years
immediately preceding the year in which the Executive resigns. The Bank's
obligation to pay this additional severance allowance will not be affected
regardless of when the Executive obtains other employment after the Executive's
employment by the Bank terminates. Resignation by the Executive for good reason
means only the following: A resignation by the Executive within 180 days after
(a) a change in the Executive's duties, title, position or working conditions
that is materially detrimental to the Executive, or (b) a material breach by the
Bank of the Bank's obligations under this Agreement, or (c) a change in the
control of the Bank. Nothing else will constitute resignation by the Executive
for good reason for the purposes of this Agreement. For the purposes of this
Agreement, a change of control of the Bank will be deemed to have occurred, if,
within a twelve month period of the termination, if any one or more of the
following events occur: (a) If the Bank merges into another entity; or (b) if
all (or substantially all) of the assets of the Bank are transferred, exchanged,
or sold; or (c) if, at any time after January 1, 1996, during any period of two
consecutive years, persons who constitute at least a majority of the Board of
Directors of the Bank were not members of the Board of Directors of the Bank at
the beginning of that two-year period. Nothing else will constitute a change in
the control of the Bank for the purposes of this Agreement.
(e) Resignation by the Executive without good reason. The Executive
will have the right to resign as Senior Vice President and Chief Lending Officer
of the Bank and terminate the Executive's employment without good reason by
giving notice to the Bank at least thirty (30) days before the date on which the
termination of the Executive's employment is to become effective. If the Bank so
directs, the Executive will cease performing the Executive's duties as Senior
Vice President and Chief Lending Officer immediately after the notice is given
and the Executive will be paid the compensation otherwise due under this
Agreement until the date on which the Executive's employment terminates. If the
Executive resigns without good reason, then the Executive will have no right to
receive a severance allowance, benefits, or any other compensation under this
agreement after the effective date of the resignation by the Executive without
good reason.
(f)Retirement. Unless otherwise expressly agreed by the Bank and the
Executive, the Executive's employment by the Bank will terminate immediately
upon the Executive attaining the normal retirement age that is defined in the
Bank's retirement benefits plan. If the Executive's employment by the Bank
terminates by reason of the Executive reaching the Bank's normal retirement age,
then the Executive will have no right to receive a severance allowance,
benefits, or any other compensation under this Agreement after the effective
date of termination of the Executive's employment by the Bank.
(g) Procedures for termination for cause. Before the Bank gives notice
terminating the Executive's employment by the Bank for cause, the Bank first
will give the Executive written notice of the occurrence of, and a description
of, the acts that constitute cause and a reasonable opportunity to be heard by
the Board of Directors of the Bank.
(h) Arbitration: lawyers' fees and arbitration expenses. If there is
any dispute as to whether there is cause for termination by the Bank of the
Executive's employment, or if there is any dispute as to whether there is good
reason for the Executive's resignation, then the dispute will be submitted to
arbitration that will be conducted in New Jersey by a single arbitrator in
accordance with the rules of the American Arbitration Association. It is not
mandatory that any other dispute arising under this Agreement be submitted to
arbitration. Any arbitration under this Agreement must be commenced within
ninety (90) days after the effective date of the termination of employment. If
the Bank terminates the Executive's employment for cause, and if the Executive
does not commence arbitration within ninety (90) days after the effective date
of termination of employment, then the Executive will be deemed to have
irrevocably waived all claims against the Bank under this Agreement and to have
irrevocably accepted the Bank's statement of cause for the termination. If the
Executive resigns for good reason, and if the Bank does not commence arbitration
within ninety (90) days after the effective date of termination of employment,
then the Bank will be obligated to provide the severance allowance and other
benefits described in paragraph 6(b) and will be deemed to have irrevocably
accepted the Executive's statement of good reason for the Executive's
resignation. The party that does not prevail in the arbitration will pay to the
prevailing party the prevailing party's costs for lawyers' fees and other
arbitration expenses, and that amount will be included in the arbitration award.
7. Restrictive covenant. The Bank and the Executive acknowledge that
the Executive has developed good will for the Bank in the form of business
relationships with the Bank's customers, and that the Executive has gained
knowledge of the Bank's particular methods of sales, marketing, administration,
systems, customer lists and other business methods, all of which are proprietary
in nature, belonging exclusively to the Bank. The Bank and Executive acknowledge
that if the Executive uses the Bank's good will or the Bank's proprietary
information on behalf of others, or transfers the Bank's good will or
proprietary information to others, these actions would have a materially adverse
affect on the Bank. Therefore, during the Executive's employment by the Bank and
the Executive will devote all of the Executive's working time exclusively to the
Bank, and for a period of one year after the Executive's employment by the Bank
terminates (except for a resignation by the Executive for good reason), the
Executive will not become employed in a senior executive position by any banking
institution in Somerset County, New Jersey, or in Hunterdon County, New Jersey.
The Executive acknowledges that there is no adequate remedy at law for a breach
of this restrictive covenant (or attempts or threatens a breach) the Bank will
be entitled to an injunction, without prejudice to the Bank's right to obtain
damages and other remedies. The Bank will be entitled to maintain an action in
court to enforce this restrictive covenant (by an injunction or other remedies)
without first submitting to arbitration the issue of whether the Executive
resigned for cause, and that issue will be tried as part of any action that may
be brought by the Bank to enforce this restrictive covenant. If a court
determines that the duration, scope or nature of these restrictions are too
broad, the restrictions will be deemed to be confined to the extent that the
court determines to be reasonable and appropriate under the circumstances. If
the Bank prevails in a suit to enforce this restrictive covenant with an
injunction or any other remedy, then the Executive will pay to the Bank the cost
of the Bank's lawyers' fees and other litigation expenses.
8. Indemnification. The Bank will indemnify and hold the Executive
harmless from and against all claims and actions against the Executive arising
from actions by the Executive on behalf of the Bank taken by the Executive in
good faith, consistent with the applicable provisions of the Bank's charger and
by-laws and with applicable statutes and regulations.
9. Compliance with 12 C.F.R. 364. The obligation of the Bank to pay
compensation and post-employment benefits to the Executive under this Agreement
is subject to applicable prohibitions against excessive compensation, and
against compensation that could lead to material financial loss, as unsafe and
unsound practices under the Interagency Guidelines Establishing Standards for
Safety and Soundness adopted as Appendix A under 12 C.F.R. 364 (and any similar
regulatory provisions that may become applicable to the Bank in the future). If
there is any consistency between the provisions of this section 9 and any other
clause in this Agreement, then the provisions in this section 9 will prevail.
10. Legal counsel. This Agreement was prepared by the law firm of
Welaj, Xxxxxx and Xxxxxxxxx. The law firm prepared this Agreement at the Bank's
request and not on behalf of the Executive. The Executive recognizes that the
law firm of Welaj, Xxxxxx and Xxxxxxxxx has not represented the Executive with
respect to this Agreement and the Executive acknowledges that the Executive has
been advised to obtain separate legal counsel regarding this Agreement. The Bank
will indemnify and hold the law firm of Welaj, Xxxxxx and Xxxxxxxxx harmless
from and against any claims asserted by the Executive predicated on the law
firm's preparation of this Agreement.
11. Notices. All notices that are given under this Agreement will be in
writing A notice will be considered to have been delivered to a party three
business days after the notice is sent to the party, at the address for that
party stated in this Agreement by certified mail, return receipt requested,
postage pre-paid. A notice sent by any other means will be considered to have
been delivered when the notice is actually received. A party may change the
party's address for receiving notices under this Agreement by notifying the
other party in writing of the address change.
12. Superseding effect: entire agreement; amendments. This Agreement
supersedes all other written and oral contracts, agreements, understandings and
promises made by or between the Bank and the Executive. The entire Agreement
between the Bank and the Executive is contained in this document, which consists
of thirteen (13). No other agreements, understandings, or promises have been
made by or between the Bank and the Executive. Neither party is relying on any
statements, promises or representations that are not expressly stated in this
document. This Agreement may not be amended except by a writing that is signed
by the Bank and the Executive. The rights and obligations of the parties under
this Agreement will remain in effect indefinitely unless and until this
Agreement is terminated or otherwise amended by the mutual agreement of the Bank
and the Executive.
13. Parties who are bound and benefited. This Agreement will inure to
the benefit of, and will be binding on, the parties and their respective
successors and assigns. The services to be provided by the Executive under this
Agreement are personal and the Bank's right to receive those services will not
be assigned by the Bank and any assignment will be void. The Executive's duties
under this Agreement will not be delegated by the Executive and any delegation
will be void. The Executive's rights under this Agreement will be not assigned
by the Executive and any assignment will be void.
14. Non-waiver of rights. Any delay or failure by either party to
exercise any right under this Agreement, or a partial or single exercise of any
right under this Agreement, will not constitute a waiver of that right or any
other right under this Agreement. No waiver of any right under this Agreement
will be effective unless the waiver is expressly stated in a writing that is
signed by the party making the waiver.
15. Governing law. This Agreement will be governed by, and construed
and enforced in accordance with the laws of the State of New Jersey.
16. Effective date. The Bank caused this Agreement to be signed, sealed
and delivered on its behalf by the Chairman of the Board of Directors, effective
as of January 1, 1996. The Executive signed, sealed and delivered this
Agreement, effective as of January 1, 1996.
Attest: SOMERSET VALLEY BANK
/s/Xxxxxxxxxx Xxxxxx By: /s/Xxxx Xxxxxxx
-------------------- ---------------
Xxxxxxxxxx Xxxxxx Xxxx Xxxxxxx, Chairman
Secretary Board of Directors
/s/Xxxxxx Xxxxxxxx
------------------
Xxxxxx Xxxxxxxx
EMPLOYMENT AGREEMENT
This document is an employment agreement between SOMERSET VALLEY BANK,
a banking corporation organized under the laws of the State of New Jersey, with
offices at 000 Xxxx Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (referred to as
"the Bank"), and XXXXX XxXXXXXX, residing at 000 Xxx Xxxxxx Xxxx, Xxxxxxxxxxxx,
Xxx Xxxxxx 00000 (referred to as "the Executive").
1. The background of this agreement. Prior to the effective date of
this Agreement, the Executive was employed by the Bank as the Bank's Executive
Vice President, Treasurer, and Chief Financial Officer. The Bank desires to
retain the Executive in this position and the Executive desires to be employed
by the Bank in this position, subject to the terms and conditions stated in this
Agreement.
2. Employment. The Bank employs the Executive as Executive Vice
President, Treasurer, and Chief Financial Officer. The duties of the position of
Executive Vice President, Treasurer, and Chief Financial Officer are stated in
the corporate by-laws of the Bank. The Executive will perform these duties. The
Executive represents that the Executive has received and read a copy of the
by-laws of the Bank.
3. Employee at will. The Executive is an employee at will. The Bank and
the Executive each is entitled to terminate the Executive's employment by the
Bank at any time for any reason or for no reason. If the Executive's employment
by the Bank is terminated by either party, then whether or not the Bank will be
obligated to provide severance benefits to the Executive will be governed by
section 6 of this Agreement.
4. Compensation.
(a) The Bank will pay to the Executive a base annual salary of
$97,650.00 until the first anniversary of the effective date of this Agreement.
(b) After the first anniversary of the effective date of this
Agreement, the annual base salary will be increased, and not decreased, annually
in an amount determined by the Board of Directors of the Bank after the Board
reviews the recommendation of the Board's Compensation Committee.
(c) The Bank will pay the Executive an annual bonus in an amount
determined from time to time by the Board of Directors of the Bank after the
Board reviews the recommendations of the Board's Compensation Committee.
5. Benefits.
(a) Reimbursement of reasonable expenses. The Bank will reimburse the
Executive for all necessary and reasonable expenses that are incurred by the
Executive in performing the Executive's duties under this Agreement, including
the reasonable costs of entertainment, travel, meals and other expenses incurred
by the Executive in marketing the Bank's products and programs and establishing
business relationships with potential Bank customers. The Executive will
regularly submit itemized vouchers and receipts and other supporting documents
to verify expenses as reasonably required by the Bank, in accordance with
policies and procedures that are established from time to time by the Board of
Directors of the Bank. The Bank will reimburse the Executive for these expenses
promptly after receiving the itemized vouchers and supporting documents.
(b) Automobile. The Bank will provide the Executive with an automobile
for use by the Executive primarily in carrying out the Executive's duties in
furthering the Bank's business interests. The Bank will pay for the maintenance
and repair of the automobile. The Board of Directors of the Bank will, from time
to time, establish a policy governing the types of automobiles that will be
provided for use by the management staff of the Bank, and the automobile that
will be provided to the Executive under this Agreement will be in accordance
with the Board's policy.
(c) Vacations. The Executive will be entitled to annual paid vacations
in conformity with the Bank's regular policies and practices, as determined from
time to time by the Board of Directors of the Bank.
(d) Medical insurance. The Bank will continue to provide the Executive
with the medical insurance coverage that is substantially comparable to the
medical insurance coverage that the Bank currently provides to the Executive,
including coverage of the Executive's spouse and dependent children.
(e) Disability insurance. The Bank will provide the Executive with
disability insurance coverage in accordance with any benefit plans for the
Bank's eligible employees that may be established from time to time by the
Bank's Board of Directors.
(f) Life insurance. The Bank will provide the Executive with group life
insurance coverage in accordance with any benefit plans for the Bank's eligible
employees that may be established from time to time by the Bank's Board of
Directors.
(g) Working facilities. The Bank will provide the Executive with a
secretary and with a personal office and other working facilities and amenities
that are substantially comparable to those which are presently provided to the
Executive.
6. Termination of the Executive's emplovment.
(a) Death or disability. The employment of the Executive by the Bank
under this Agreement will terminate automatically on the death or total
permanent disability of the Executive. Total permanent disability will be
determined by the disability insurance company that provides disability
insurance coverage for the Executive.
(b) Termination by the Bank without cause. The Bank is entitled to
terminate the Executive's employment by the Bank at any time without cause by
giving the Executive notice in writing thirty (30) days before the date on which
the termination of the Executive's employment is to become effective. If the
Bank so directs, the Executive will cease performing the Executive's duties as
Executive Vice President, Treasurer, and Chief Financial Officer immediately
after the notice is given and the Executive will be paid the compensation
otherwise due under this Agreement until the date on which the Executive's
employment terminates. If the Bank terminates the Executive's employment without
cause, then the Bank will pay to the Executive, in twelve equal monthly
installments beginning on the first day of the first full calendar month after
the date on which the Executive's employment terminates, a severance allowance
equal to the Executive's base annual salary that is in effect at the time that
the notice of termination is given to the Executive. The Bank's obligation to
pay this severance allowance will not be affected regardless of when the
Executive obtains other employment after the Executive's employment by the Bank
terminates. If the Bank terminates the Executive's employment without cause,
then the Bank will continue to provide the Executive with life insurance
coverage that is substantially comparable to any group life insurance coverage
that may be provided for the Bank's eligible employees from the date on which
the Executive's employment terminates until the earlier to occur of (i) the
first anniversary of the date on which the Executive's employment terminates, or
(ii) the date on which the Executive obtains substantially comparable life
insurance coverage from another employer. If the Bank terminates the Executive's
employment without cause, then the Bank will continue to provide the Executive
with medical insurance coverage (including coverage of the Executive's spouse
and dependent children) that is substantially comparable to the medical
insurance coverage provided to the Bank's eligible employees until the earlier
to occur of (i) the first anniversary of the date on which the Executive's
employment terminates, or (ii) the date on which the Executive obtains
substantially comparable medical insurance coverage from another employer. If
the Bank terminates the Executive's employment without cause, then the Bank will
continue to provide the Executive with disability insurance coverage that is
substantially comparable to any disability insurance coverage that may be
provided for the Bank's eligible employees from the date on which the
Executive's employment terminates until the earlier to occur of (i) the first
anniversary of the date on which the Executive's employment terminates, or (ii)
the date on which the Executive obtains substantially comparable disability
insurance coverage from another employer.
(c) Termination by the Bank for cause. The Bank is entitled to
terminate the Executive's employment by the Bank at any time for cause by giving
the Executive notice in writing thirty (30) days before the date on which the
termination of the Executive's employment is to become effective. The notice
will include a statement describing the cause of the termination of employment.
If the Bank so directs, the Executive will cease performing the Executive's
duties as Executive Vice President, Treasurer, and Chief Financial Officer
immediately after the notice is given and the Executive will be paid the
compensation otherwise due under this Agreement until the date on which the
Executive's employment terminates. The Executive will have no right to receive a
severance allowance, benefits, or any other compensation under this Agreement
after the effective date of termination of employment by the Bank for cause.
Termination for cause includes termination because of the Executive's personal
dishonesty, willful breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties as described in this Agreement,
willful insubordination with respect to the lawful directions of the Board of
Directors of the Bank, conviction of any crime (other than traffic violations or
similar offenses) or willful violation of any final cease-and-desist order, or
material breach of any provision of this Agreement.
(d) Resignation by the Executive for good reason. The Executive will
have the right to resign as Executive Vice President, Treasurer, and Chief
Financial Officer of the Bank and terminate the Executive's employment for good
reason by giving notice to the Bank at least thirty (30) days before the date on
which the termination of the Executive's employment is to become effective. The
notice will include a statement describing what the Executive asserts is the
good reason for the Executive's resignation. If the Executive resigns for good
reason, then the Bank will provide the Executive with the same severance
allowance and other benefits that are described in paragraph 6(b) of this
Agreement except in the event of a change of control in which event the
severance benefits will be increased to two times the Executive's annual base
salary in twenty-four equal monthly installments. If the Executive resigns for
good reason, then the Bank also will pay to the Executive on the last of the
calendar year in which the Executive resigns, an additional severance allowance
equal to the annual average of the annual bonus payments, if any, paid to the
Executive under this Agreement for the three full calendar years immediately
preceding the year in which the Executive resigns. If the Executive resigns for
good reason before January 1, 19g9, then the amount of this additional severance
allowance will be equal to the annual average of the annual bonus payments, if
any, paid to the Executive under this Agreement for any full calendar years
immediately preceding the year in which the Executive resigns. The Bank's
obligation to pay this additional severance allowance will not be affected
regardless of when the Executive obtains other employment after the Executive's
employment by the Bank terminates. Resignation by the Executive for good reason
means only the following: A resignation by the Executive within 180 days after
(a) a change in the Executive's duties, title, position or working conditions
that is materially detrimental to the Executive, or (b) a material breach by the
Bank of the Bank's obligations under this Agreement, or (c) a change in the
control of the Bank. Nothing else will constitute resignation by the Executive
for good reason for the purposes of this Agreement. For the purposes of this
Agreement, a change of control of the Bank will be deemed to have occurred, if,
within a twelve month period of the termination, if any one or more of the
following events occur (a) If the Bank merges into another entity; or (b) if all
(or substantially all) of the assets of the Bank are transferred, exchanged, or
sold; or (c) if, at any time after January 1, 19g6, during any period of two
consecutive years, persons who constitute at least a majority of the Board of
Directors of the Bank were not members of the Board of Directors of the Bank at
the beginning of that two-year period. Nothing else will constitute a change in
the control of the Bank for the purposes of this Agreement.
(e) Resignation by the Executive without good reason. The Executive
will have the right to resign as Executive Vice President, Treasurer, and Chief
Financial Officer of the Bank and terminate the Executive's employment without
good reason by giving notice to the Bank at least thirty (30) days before the
date on which the termination of the Executive's employment is to become
effective. If the Bank so directs, the Executive will cease performing the
Executive's duties as Executive Vice President, Treasurer, and Chief Financial
Officer immediately after the notice is given and the Executive will be paid the
compensation otherwise due under this Agreement until the date on which the
Executive's employment terminates. If the Executive resigns without good reason,
then the Executive will have no right to receive a severance allowance,
benefits, or any other compensation under this agreement after the effective
date of the resignation by the Executive without good reason.
(f) Retirement. Unless otherwise expressly agreed by the Bank and the
Executive, the Executive's employment by the Bank will terminate immediately
upon the Executive attaining the normal retirement age that is defined in the
Bank's retirement benefits plan. If the Executive's employment by the Bank
terminates by reason of the Executive reaching the Bank's normal retirement age,
then the Executive will have no right to receive a severance allowance,
benefits, or any other compensation under this Agreement after the effective
date of termination of the Executive's employment by the Bank.
(g) Procedures for termination for cause. Before the Bank gives notice
terminating the Executive's employment by the Bank for cause, the Bank first
will give the Executive written notice of the occurrence of, and a description
of, the acts that constitute cause and a reasonable opportunity to be heard by
the Board of Directors of the Bank.
(h) Arbitration; lawyers' fees and arbitration expenses. If there is
any dispute as to whether there is cause for termination by the Bank of the
Executive's employment, or if there is any dispute as to whether there is good
reason for the Executive's resignation, then the dispute will be submitted to
arbitration that will be conducted in New Jersey by a single arbitrator in
accordance with the rules of the American Arbitration Association. It is not
mandatory that any other dispute arising under this Agreement be submitted to
arbitration. Any arbitration under this Agreement must be commenced within
ninety (90) days after the effective date of the termination of employment. If
the Bank terminates the Executive's employment for cause, and if the Executive
does not commence arbitration within ninety (90) days after the effective date
of termination of employment, then the Executive will be deemed to have
irrevocably waived all claims against the Bank under this Agreement and to have
irrevocably accepted the Bank's statement of cause for the termination. If the
Executive resigns for good reason, and if the Bank does not commence arbitration
within ninety (90) days after the effective date of termination of employment,
then the Bank will be obligated to provide the severance allowance and other
benefits described in paragraph 6(b) and will be deemed to have irrevocably
accepted the Executive's statement of good reason for the Executive's
resignation. The party that does not prevail in the arbitration will pay to the
prevailing party the prevailing party's costs for lawyers' fees and other
arbitration expenses, and that amount will be included in the arbitration award.
7. Restrictive covenant. The Bank and the Executive acknowledge that
the Executive has developed good will for the Bank in the form of business
relationships with the Bank's customers, and that the Executive has gained
knowledge of the Bank's particular methods of sales, marketing, administration,
systems, customer lists and other business methods, all of which are proprietary
in nature, belonging exclusively to the Bank. The Bank and Executive acknowledge
that if the Executive uses the Bank's good will or the Bank's proprietary
information on behalf of others, or transfers the Bank's good will or
proprietary information to others, these actions would have a materially adverse
affect on the Bank. Therefore, during the Executive's employment by the Bank and
the Executive will devote all of the Executive's working time exclusively to the
Bank, and for a period of one year after the Executive's employment by the Bank
terminates (except for a resignation by the Executive for good reason), the
Executive will not become employed in a senior executive position by any banking
institution headquartered in Somerset County, New Jersey, or in Hunterdon
County, New Jersey. The Executive acknowledges that there is no adequate remedy
at law for a breach of this restrictive covenant (or attempts or threatens a
breach) the Bank will be entitled to an injunction, without prejudice to the
Bank's right to obtain damages and other remedies, The Bank will be entitled to
maintain an action in court to enforce this restrictive covenant (by an
injunction or other remedies) without first submitting to arbitration the issue
of whether the Executive resigned for cause, and that issue will be tried as
part of any action that may be brought by the Bank to enforce this restrictive
covenant. If a court determines that the duration, scope or nature of these
restrictions are too broad, the restrictions will be deemed to be confined to
the extent that the court determines to be reasonable and appropriate under the
circumstances. If the Bank prevails in a suit to enforce this restrictive
covenant with an injunction or any other remedy, then the Executive will pay to
the Bank the cost of the Bank's lawyers' fees and other litigation expenses.
8. Indemnification. The Bank will indemnify and hold the Executive
harmless from and against all claims and actions against the Executive arising
from actions by the Executive on behalf of the Bank taken by the Executive in
good faith, consistent with the applicable provisions of the Bank's charger and
by-laws and with applicable statutes and regulations.
9. Compliance with 12 C.F.R. ss.364. The obligation of the Bank to pay
compensation and post-employment benefits to the Executive under this Agreement
is subject to applicable prohibitions against excessive compensation, and
against compensation that could lead to material financial loss, as unsafe and
unsound practices under the Interagency Guidelines Establishing Standards for
Safety and Soundness adopted as Appendix A under 12 C.F.R. ss.364 (and any
similar regulatory provisions that may become applicable to the Bank in the
future). If there is any consistency between the provisions of this section 9
and any other clause in this Agreement, then the provisions in this section 9
will prevail.
10. Legal counsel. This Agreement was prepared by the law firm of
Welaj, Xxxxxx and Xxxxxxxxx. The law firm prepared this Agreement at the Bank's
request and not on behalf of the Executive. The Executive recognizes that the
law firm of Welaj, Xxxxxx and Xxxxxxxxx has not represented the Executive with
respect to this Agreement and the Executive acknowledges that the Executive has
been advised to obtain separate legal counsel regarding this Agreement. The Bank
will indemnify and hold the law firm of Welaj, Xxxxxx and Xxxxxxxxx harmless
from and against any claims asserted by the Executive predicated on the law
firm's preparation of this Agreement.
11. Notices. All notices that are given under this Agreement will be in
writing. A notice will be considered to have been delivered to a party three
business days after the notice is sent to the party, at the address for that
party stated in this Agreement by certified mail, return receipt requested,
postage pre-paid. A notice sent by any other means will be considered to have
been delivered when the notice is actually received. A party may change the
party's address for receiving notices under this Agreement by notifying the
other party in writing of the address change.
12. Supersedinq effect: entire agreement: amendments. This Agreement
supersedes all other written and oral contracts, agreements, understandings and
promises made by or between the Bank and the Executive. The entire Agreement
between the Bank and the Executive is contained in this document, which consists
of thirteen (13) pages. No other agreements, understandings, or promises have
been made by or between the Bank and the Executive. Neither party is relying on
any statements, promises or representations that are not expressly stated in
this document. This Agreement may not be amended except by a writing that is
signed by the Bank and the Executive. The rights and obligations of the parties
under this Agreement will remain in effect indefinitely unless and until this
Agreement is terminated or otherwise amended by the mutual agreement of the Bank
and the Executive.
13. Parties who are bound and benefited. This Agreement will inure to
the benefit of, and will be binding on, the parties and their respective
successors and assigns. The services to be provided by the Executive under this
Agreement are personal and the Bank's right to receive those services will not
be assigned by the Bank and any assignment will be void. The Executive's duties
under this Agreement will not be delegated by the Executive and any delegation
will be void. The Executive's rights under this Agreement will be not assigned
by the Executive and any assignment will be void.
14. Non-waiver of riqhts. Any delay or failure by either party to
exercise any right under this Agreement, or a partial or single exercise of any
right under this Agreement, will not constitute a waiver of that right or any
other right under this Agreement. No waiver of any right under this Agreement
will be effective unless the waiver is expressly stated in a writing that is
signed by the party making the waiver.
15. Governing law. This Agreement will be governed by, and construed
and enforced in accordance with the laws of the State of New Jersey.
16. Effective date. The Bank caused this Agreement to be signed, sealed
and delivered on its behalf by the Chairman of the Board of Directors, effective
as of January 1, 1996. The Executive signed, sealed and delivered this
Agreement, effective as of January 1, 1996.
Attest: SOMERSET VALLEY BANK
/s/Xxxxxxxxxx Xxxxxx By: /s/Xxxx Xxxxxxx
-------------------- ---------------
Xxxxxxxxxx Xxxxxx Xxxx Xxxxxxx, Chairman
Secretary Board of Directors
/s/Xxxxxx X. Xxxxxxxx /s/Xxxxx XxXxxxxx
--------------------- -----------------
Xxxxxx X. Xxxxxxxx Xxxxx XxXxxxxx EX-21
