SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM l0-K
(AMENDMENT NO. 1)
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/X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to ___________________
Commission file number 0-l0699
HUBCO, INC.
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(Exact name of registrant as specified in its Charter)
New Jersey 22-2405746
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 236-2600
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, no par value Series A Preferred Stock
-------------------------- ------------------------
(Title of Class) (Title of Class)
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the voting common stock held by
non-affiliates of the Registrant, as of March 26, 1997 was $477,151,051.
The number of shares of Registrant's Common Stock, no par value,
outstanding as of March 26, 1997 was 21,522,484.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
HUBCO's 1996 Annual Report contains on pages 18 through 34 the information
required by Item 8 and that information is incorporated herein by reference.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) (3) Exhibits
List of Exhibits
(3a) The Restated Certificate of Incorporation of HUBCO,
Inc. filed January 31, 1997.
(3b) The By-Laws of HUBCO, Inc.
(4a) Indenture dated as of January 14, 1994 between HUBCO, Inc.
and Summit Bank as Trustee for $25,000,000 7.75%
Subordinated Debentures due 2004. (Incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Exhibit (4))
(4b) Indenture dated as of September 13, 1996 between HUBCO,
Inc. and Summit Bank as Trustee for $75,000,000 8.20%
Subordinated Debentures due 2006. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated September 16, 1996.)
2
<PAGE>
(4c) Indenture dated January 31, 1997 between HUBCO, Inc. And
the Bank of New York as Trustee for $50,000,000 8.98%
Junior Subordinated Debentures due February 1, 2027.
(Incorporated by reference from the Company's Current
Report on Form 8-K dated February 11, 1997.)
(10a) Agreement and Plan of Merger dated as of February 5, 1996,
between HUBCO, Inc. and Lafayette American Bank and Trust
Company.(Incorporated by reference from the Company's
Current Report on Form S-4 dated March 19, 1996.)
(10b) Stock Option Agreement dated as of February 5, 1996, between
HUBCO, Inc. and Lafayette American Bank and Trust Company.
(Incorporated by reference from the Company's Current Report
on Form 8-K dated February 6, 1996.)
(10c) Agreement and Plan of Merger dated as of April 28, 1996,
between HUBCO, Inc., Hudson United Bank, Lafayette American
Bank and Trust, Hometown Bancorporation, Inc. and The Bank
of Darien. (Incorporated by reference from the Company's
Current Report on Form 8-K dated May 2, 1996.)
(10d) Stock Option Agreement dated as of April 28, 1996, between
HUBCO, Inc. and Hometown Bancorporation, Inc. (Incorporated
by reference from the Company's Current Report on Form 8-K
dated February 6, 1996.)
(10e) Agreement and Plan of Merger dated as of June 21, 1996,
between HUBCO, Inc. Hudson United Bank, Lafayette American
Bank and Trust, Westport Bancorp, Inc. and The Westport
Bank & Trust Company (Incorporated by reference from the
Company's Current Report on Form 8-K dated July 2, 1996.)
(10f) Stock Option Agreement dated as of June 21, 1996, between
HUBCO, Inc. and Westport Bancorp, Inc. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated July 2, 1996.)
*(10g) Change in Control, Severance and Employment Agreement with
Kenneth T. Neilson dated January 1, 1997.
*(10h) Change in Control, Severance and Employment Agreement with
D. Lynn Van Borkulo-Nuzzo dated January 1, 1997.
*(10i) Change in Control, Severance and Employment Agreement with
John F. McIlwain dated January 1, 1997.
3
<PAGE>
*(10j) Change in Control, Severance and Employment Agreement with
Karen Foley dated January 1, 1997.
*(10k) HUBCO Supplemental Employees' Retirement Plan dated January
1, 1996.
(10l) Collective Bargaining Agreement with Local 153 of the
Office and Professional Employees International Union,
dated March 1, 1996. (Incorporated by reference from the
Company's Annual Report of Form 10-K for the fiscal year
ended December 31, 1995, Exhibit.)
(10m) HUBCO, Inc. Directors Deferred Compensation Plan.
(Incorporated by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Exhibit)
(10n) Agreement and Plan of Merger dated as of August 18, 1995
among HUBCO, Inc., Hudson United Bank, Growth Financial
Corp and Growth Bank. (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 24,
1995.)
(10o) Agreement and Plan of Merger dated August 15, 1996, between
HUBCO, Inc., Lafayette American Bank and Trust, UST Corp. and
UST Bank/Connecticut (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 22, 1996.)
+(13) Those portions of HUBCO's 1996 Annual Report which are
incorporated by reference into this 10-K.
+(22) List of Subsidiaries.
+(27) Financial Data Schedule.
+ Previously filed
* Filed herewith
4
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HUBCO, INC.
By: /s/ KENNETH T. NEILSON
-----------------------
Kenneth T. Neilson
Chairman of the Board
President and CEO
Dated: March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ KENNETH T. NEILSON Chairman of the Board March 28, 1997
- ------------------------------ President, CEO, Director
Kenneth T. Neilson Principal Executive Officer
/s/ ROBERT J. BURKE Director March 28, 1997
- ------------------------------
Robert J. Burke
/s/ BRYANT D. MALCOLM Director March 28, 1997
- ------------------------------
Bryant D. Malcolm
/s/ CHARLES F.X. POGGI Director March 28, 1997
- ------------------------------
Charles F. X. Poggi
/s/ SR. GRACE FRANCES STRAUBER Director March 28, 1997
- ------------------------------
Sister Grace Frances Strauber
5
<PAGE>
Signature Title Date
--------- ----- ----
/s/ W. PETER MCBRIDE Director March 28, 1997
- ------------------------------
W. Peter McBride
/s/ CHRISTINA L. MAIER Assistant Treasurer March 28, 1997
- ------------------------------ Principal Accounting
Christina L. Maier Officer and Principal
Financial Officer
6
<PAGE>
EXHIBIT INDEX
Exhibit Description
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(3a) The Restated Certificate of Incorporation of HUBCO,
Inc. filed January 31, 1997.
(3b) The By-Laws of HUBCO, Inc.
(4a) Indenture dated as of January 14, 1994 between HUBCO, Inc.
and Summit Bank as Trustee for $25,000,000 7.75%
Subordinated Debentures due 2004. (Incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Exhibit (4))
(4b) Indenture dated as of September 13, 1996 between HUBCO,
Inc. and Summit Bank as Trustee for $75,000,000 8.20%
Subordinated Debentures due 2006. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated September 16, 1996.)
(4c) Indenture dated January 31, 1997 between HUBCO, Inc. And
the Bank of New York as Trustee for $50,000,000 8.98%
Junior Subordinated Debentures due February 1, 2027.
(Incorporated by reference from the Company's Current
Report on Form 8-K dated February 11, 1997.)
(10a) Agreement and Plan of Merger dated as of February 5, 1996,
between HUBCO, Inc. and Lafayette American Bank and Trust
Company.(Incorporated by reference from the Company's
Current Report on Form S-4 dated March 19, 1996.)
(10b) Stock Option Agreement dated as of February 5, 1996, between
HUBCO, Inc. and Lafayette American Bank and Trust Company.
(Incorporated by reference from the Company's Current Report
on Form 8-K dated February 6, 1996.)
(10c) Agreement and Plan of Merger dated as of April 28, 1996,
between HUBCO, Inc., Hudson United Bank, Lafayette American
Bank and Trust, Hometown Bancorporation, Inc. and The Bank
of Darien. (Incorporated by reference from the Company's
Current Report on Form 8-K dated May 2, 1996.)
(10d) Stock Option Agreement dated as of April 28, 1996, between
HUBCO, Inc. and Hometown Bancorporation, Inc. (Incorporated
by reference from the Company's Current Report on Form 8-K
dated February 6, 1996.)
(10e) Agreement and Plan of Merger dated as of June 21, 1996,
between HUBCO, Inc. Hudson United Bank, Lafayette American
Bank and Trust, Westport Bancorp, Inc. And The Westport
Bank & Trust Company (Incorporated by reference from the
Company's Current Report on Form 8-K dated July 2, 1996.)
(10f) Stock Option Agreement dated as of June 21, 1996, between
HUBCO, Inc. and Westport Bancorp, Inc. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated July 2, 1996.)
*(10g) Change in Control, Severance and Employment Agreement with
Kenneth T. Neilson dated January 1, 1997.
*(10h) Change in Control, Severance and Employment Agreement with
D. Lynn Van Borkulo-Nuzzo dated January 1, 1997.
*(10i) Change in Control, Severance and Employment Agreement with
John F. McIlwain dated January 1, 1997.
<PAGE>
*(10j) Change in Control, Severance and Employment Agreement with
Karen Foley dated January 1, 1997.
*(10k) HUBCO Supplemental Employees' Retirement Plan dated January
1, 1996.
(10l) Collective Bargaining Agreement with Local 153 of the
Office and Professional Employees International Union,
dated March 1, 1996. (Incorporated by reference from the
Company's Annual Report of Form 10-K for the fiscal year
ended December 31, 1995, Exhibit.)
(10m) HUBCO, Inc. Directors Deferred Compensation Plan.
(Incorporated by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Exhibit)
(10n) Agreement and Plan of Merger dated as of August 18, 1995
among HUBCO, Inc., Hudson United Bank, Growth Financial
Corp and Growth Bank. (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 24,
1995.)
(10o) Agreement and Plan of Merger dated August 15, 1996, between
HUBCO, Inc., Lafayette American Bank and Trust, UST Corp. and
UST Bank/Connecticut (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 22, 1996.)
+(13) Those portions of HUBCO's 1996 Annual Report which are
incorporated by reference into this 10-K.
+(22) List of Subsidiaries.
+(27) Financial Data Schedule.
+ Previously filed
* Filed herewith
CHANGE IN CONTROL,
SEVERANCE AND EMPLOYMENT AGREEMENT
FOR KENNETH T. NEILSON
(Single Trigger; Gross-Up)
THIS CHANGE IN CONTROL SEVERANCE AND EMPLOYMENT AGREEMENT (the
"Agreement"), is made this 1st day of January, 1997, among HUBCO, Inc.
("HUBCO"), a New Jersey corporation which maintains its principal office at 1000
MacArthur Boulevard., Mahwah, New Jersey, HUDSON UNITED BANK (the "Bank"), a New
Jersey chartered commercial bank, with an office at 1000 MacArthur Boulevard.,
Mahwah, New Jersey (HUBCO and the Bank collectively are referred to herein as
the "Company") and KENNETH T. NEILSON (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by HUBCO and the Bank for
many years, most recently as Chairman, President and Chief Executive Officer;
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of HUBCO and the Bank;
WHEREAS, the Board of Directors of HUBCO and the Bank believe that
the future services of the Executive are of great value to HUBCO and the Bank
and that it is important for the growth and development of HUBCO and the Bank
that the Executive continue in his position;
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WHEREAS, if HUBCO receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of HUBCO (the "Board")
believes it is imperative that HUBCO and the Bank and the Board be able to rely
upon the Executive to continue in his position, and that they be able to receive
and rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to provide the Executive with continued
employment or certain termination benefits in the event of a Change in Control,
as hereinafter defined;
WHEREAS, due to the uncertainties created in certain contracts by
the requirement that an executive have "good reason" before any resignation, it
is the intention of the Board that, among other things, the Executive is given
the right hereunder to resign at any time and for any reason and to receive the
payments and benefits provided hereunder if he works for the Company for 90 days
following a Change in Control.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
<PAGE>
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1. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to materially perform his duties
for the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such material
failure and offering a reasonable opportunity to cure such failure; (ii) the
willful engaging by the Executive in material misconduct which causes material
injury to the Company as specified in a written notice to the Executive 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 the Executive shall be considered willful
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company. The Company shall have the burden of proving cause by clear and
convincing evidence.
b. Change in Control.
(i) Definition. For purposes of this Agreement, a
"Change in Control" shall mean the occurrence of any of the following
events with respect to HUBCO:
(A) The acquisition of the beneficial ownership,
as defined under the Exchange Act, of 25% or more of HUBCO's voting
securities or
<PAGE>
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all or substantially all of the assets of HUBCO by a single person
or entity or group of affiliated persons or entities;
(B) The merger, consolidation or combination of
HUBCO with an unaffiliated corporation in which the directors of
HUBCO as applicable immediately prior to such merger, consolidation
or combination constitute less than a majority of the board of
directors of the surviving, new or combined entity unless one-half
of the board of directors of the surviving, new or combined entity
were directors of HUBCO immediately prior to such transaction and
HUBCO's chief executive officer immediately prior to such
transaction continues as the chief executive officer of the
surviving, new or combined entity; or
(C) During any period of two consecutive calendar
years, individuals who at the beginning of such period constitute
the Board of Directors of HUBCO cease for any reason to constitute
at least two-thirds thereof, unless the election or nomination for
the election by HUBCO's stockholders of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period;
or
(D) The transfer of all or substantially all of
HUBCO's assets or all or substantially all of the assets of its
primary subsidiaries.
(ii) Time of Change in Control. For purposes of this
Agreement, a Change in Control of HUBCO shall be deemed to occur on the
earlier of:
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(A) The first date on which a single person or
entity or group of affiliated persons or entities acquire the
beneficial ownership of 25% or more of HUBCO's voting securities; or
(B) Forty-five (45) days prior to the date HUBCO
enters into a definitive agreement to merge, consolidate, combine or
sell the assets of HUBCO; provided however, that for purposes of any
resignation by the Executive, the Change in Control shall not be
deemed to occur until the consummation of the merger, consolidation,
combination or sale, as the case may be, except if this Agreement is
not expressly assumed in writing by the acquiring company, then the
Change in Control shall be deemed to occur the day before the
consummation; and further provided that if any definitive agreement
to merge, consolidate, combine or sell assets is terminated without
consummation of the acquisition, then no Change in Control shall
have been deemed to have occurred; or
(C) The date upon which the election of directors
occurs qualifying under Section b(i)(C) above.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) two years after the consummation of any event giving rise to the
Change in Control or (ii) the date the Executive would attain age 65.
<PAGE>
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d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express written consent:
(i) The assignment to Executive of any duties
inconsistent with, or the reduction of authority, powers or
responsibilities associated with, Executive's position, title, duties,
responsibilities and status with the Company immediately prior to a Change
in Control; any removal of Executive from, or any failure to re-elect
Executive to, any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in position, title, duties,
responsibilities and status or position(s) or office(s) resulting from a
Change in Control or from a merger or consolidation of the Company into or
with another bank or company shall not meet the requirements of this
paragraph if, and only if, the Executive's new title, duties and
responsibilities are accepted in writing by the Executive, in the sole
discretion of the Executive.
(ii) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or
the failure to award Executive any annual increases in accordance
herewith;
(iii) A failure by the Company to continue any bonus
plan in which Executive participated immediately prior to the Change in
Control or a failure by the
<PAGE>
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Company to continue Executive as a participant in such plan on at least
the same basis as Executive participated in such plan prior to the Change
in Control;
(iv) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(v) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's pension plan, life
insurance plan, health and accident plan, disability plan, or stock option
plan) in which Executive is participating immediately prior to a Change in
Control (except that the Company may institute or continue plans, programs
or arrangements providing Executive with substantially similar benefits);
the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits
under, any of such plans, programs or arrangements; the failure to
continue, or the taking of any action which would deprive Executive, of
any material fringe benefit enjoyed by Executive immediately prior to such
Change in Control; or the failure by the Company to provide Executive with
the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control;
(vi) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by
any successor to the
<PAGE>
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Company and to provide such assumption to the Executive prior to any
Change in Control; or
(vii) Any purported termination of Executive's
employment by the Company 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.
f. Voting Securities. "Voting securities" means HUBCO's common
stock, together with any preferred stock entitled to vote generally in elections
for directors or other matters. With respect to preferred stock, in determining
the percentage of beneficial ownership of voting securities, the number of votes
to which the holder is entitled in the election of directors with the common
holders, and not the number of shares, shall be the basis of the calculation.
2. Employment. During the Contract Period, the Company hereby agrees
to employ the Executive, and the Executive hereby accepts employment upon the
terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed as the Chairman, President and Chief Executive Officer of HUBCO and the
Bank, or such other corporate or divisional profit center as shall then be the
principal successor to the business, assets and properties of the Company, with
substantially the same title and the same duties and responsibilities as before
the Change in Control. The Executive shall devote his full time and attention to
the business of the Company, and shall not during the Contract Period be engaged
in any other business activity. This paragraph shall not be construed as
preventing the Executive from
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managing any investments of his which do not require any substantial service on
his part in the operation of such investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Annual Salary. An annual salary equal to the annual salary
in effect as of the Change in Control. The annual salary shall be payable in
installments in accordance with the Company's usual payroll method. The annual
salary shall not be reduced during the Contract Period.
b. Annual Bonus. An annual cash bonus equal to the highest of
the bonuses paid to the Executive for the three fiscal years prior to the Change
in Control. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of
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the Company in the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change in Control.
b. Supplemental Executive Retirement Plan. During the Contract
Period, if the Executive was entitled to benefits under the Company's
Supplemental Executive Retirement Plan ("SERP") prior to the Change in Control,
the Executive shall be entitled to continued benefits under the SERP after the
Change in Control and such SERP may not be modified to reduce or eliminate the
accrual of or vesting of such benefits during the Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, he shall be entitled to the same membership and/or use of
an automobile at least comparable to the automobile provided to him prior to the
Change in Control during the Contract Period.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and procedures of the
Company, as such existed immediately prior to the Change in Control. During the
Contract Period, the Executive also shall be entitled to hospital, health,
medical and life insurance, and any other benefits enjoyed, from time to time,
by senior officers of the Company, all upon terms as favorable as those enjoyed
by other senior officers of the Company. Notwithstanding anything in this
paragraph 5(d) to the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy is uniformly
applied to all officers of the Company (and any successor or acquirer of
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the Company, if any), including the chief executive officer of such entities,
then no such change shall be deemed to be contrary to this paragraph.
6. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the termination
which notice shall specify the reasons for the termination and provide, if
practical, an opportunity for the Executive to cure such Cause. In the event of
a valid termination for Cause the Executive shall not be entitled to any further
benefits under this Agreement.
7. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months in any 12 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall be entitled to
the payments and benefits provided under Section 9 hereof as if the Executive
had been terminated hereunder without Cause upon such date.
8. Death Benefits. Upon the Executive's death during the Contract
Period, the Executive shall be deemed to terminate without cause as of the date
of death and his estate shall be entitled to the payments and benefits provided
under Section 9 hereof as if the Executive had been terminated without cause
upon such date.
9. Termination Without Cause or Resignation.
a. Termination Without Cause. The Company may terminate the
Executive without Cause during the Contract Period by written notice to the
Executive.
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b. Resignation for Good Reason in First 90 Days After a Change
in Control. For the first 90 days after a Change in Control, the Executive may
resign for Good Reason during the Contract Period upon prior written notice to
the Company.
c. Resignation After First 90 Days. Commencing 90 calendar
days after a Change in Control and continuing thereafter during the Contract
Period, the Executive may resign for any reason whatsoever and need not specify
the reason, upon four weeks written notice to the Company and, for these
purposes, the effective date of the resignation and not the date of the notice
must be 90 calendar days after the Change in Control.
d. Payments and Benefits. If the Company terminates the
Executive's employment during the Contract Period without Cause or if the
Executive resigns for Good Reason under paragraph 9(b) or for any reason under
paragraph 9(c), the Company shall, as promptly as practical but in no event
later than 10 business days after the termination of employment pay the
Executive a lump sum (the "Lump Sum") equal to 3.0 times the sum of (i) the
annual salary paid to the Executive immediately prior to the Change in Control
plus (ii) the highest annual incentive bonus paid to the Executive for any
fiscal year during each of the three fiscal years immediately prior to the
Change in Control. For these purposes, any deferral of salary or bonus by the
Executive under the Company's 401(k) plan or otherwise shall be included in
salary and bonus. The Company shall at the time of such payment also make any
Gross-Up Payment due under Section 10 hereof for the calendar year of the
termination. The Company also shall continue to provide the Executive, his
spouse and eligible dependents for a period of three years following the
termination of employment, with health, hospitalization and medical insurance,
as were provided at the time of
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the Change in Control, at the Company's cost, subject only to the responsibility
of the Executive to continue to pay a portion of the premium, as well as co-pays
or deductibles in such amounts as were paid by the Executive prior to the
termination.
e. No Duty to Mitigate. The Executive shall not have a duty to
mitigate the damages suffered by him in connection with the termination by the
Company of his employment without Cause under paragraph 9(a) or a resignation
under paragraphs 9(b) and 9(c) during the Contract Period. The Company shall not
be entitled to offset from the payment due to the Executive hereunder any
amounts due from or claims against the Executive.
f. Legal Fees and Expenses. If the Company fails to pay the
Executive the Lump Sum due him under this Agreement or to provide him with the
health, hospitalization and medical insurance benefits due under this Agreement
or the Gross-Up Payment due under Section 10 hereof, the Executive, after giving
10 days' written notice to the Company identifying the Company's failure, shall
be entitled to recover from the Company, monthly upon demand, any and all of his
legal fees and other expenses incurred in connection with his enforcement
against the Company of the terms of this Agreement.
10. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments under this Section 10 or any
payments and/or benefits under this Agreement or under any benefit plan of
<PAGE>
-14-
the Company applicable to Executive individually or generally to executives or
employees of the Company, then, notwithstanding any other provisions of this
Agreement, the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on such payments and benefits and any federal, state
and local income tax and Excise Tax upon payments provided for in this Section
10, shall be equal to the payments due to the Executive hereunder and the
payments and/or benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made by domestic cashier's or
treasurer's check, certified check or wire transfer, upon the later of (i) five
(5) days after the date the Executive notifies the Company of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing the liability for
such Excise Tax. The amount of any Gross-Up Payment under this section shall be
computed by a nationally recognized certified public accounting firm designated
jointly by the Company and the Executive. The cost of such services by the
accounting firm shall be paid by the Company. If the Company and the Executive
are unable to designate jointly the accounting firm, then the firm shall be the
accounting firm used by the Company immediately prior to the Change in Control.
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to
<PAGE>
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be paid, and attach a copy of the IRS notice. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the date
on which the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim; provided, however that the Company
shall pay directly all costs and expenses (including legal and accounting
fees, as well as other expenses and any additional interest and penalties)
incurred by the Executive and the Company in connection with an IRS levy,
contest or claim and provided further that the Company shall not take any
action or fail to make any Gross-Up Payment so as to cause the assessment
of any IRS levy and the Company shall cause any levy so assessed to be
immediately released by payment of the Gross-Up Amount, together with all
costs, interest and penalties.
<PAGE>
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11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things,
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions. No violation of this Section 11 shall entitle the
Company to withhold any payment or benefit due the Executive hereunder.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for a
period of 3 years from the date hereof (the "Initial Term") or until the end of
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term is always 3 years) unless on or before such date the Board
of
<PAGE>
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Directors of HUBCO by resolution passed by a majority vote of the Directors then
in office, votes not to extend the Initial Term any further. The Company shall
promptly advise the Executive in writing of the passage of such resolution and
if it fails to do so the passage of such resolution shall be ineffective.
b. No Effect Prior to Change in Control. Prior to a Change in
Control, this Agreement shall not affect any rights of the Company to terminate
the Executive or the benefits payable to the Executive. The rights and
liabilities provided hereunder shall only become effective upon a Change in
Control. If the employment of the Executive by the Company is ended for any
reason whatsoever prior to a Change in Control, this Agreement shall thereafter
be of no further force and effect.
13. Compensation and Benefits Provided Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that the
Executive shall not be entitled to the benefits of any other plan or program of
the Company or agreement with the Company expressly providing for severance or
termination pay or post-employment medical benefits. In furtherance of the
foregoing, this Agreement is not in derogation of, but rather supplemental to,
the rights and benefits of the Executive, if any, under any stock option plan,
restricted stock plan, pension plan, 401(k) plan and SERP.
<PAGE>
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14. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than
four weeks nor more than six weeks after such Notice of Termination is given,
except in the case of termination of employment by the Company of the Executive
for Cause pursuant to Section 6 hereof, in which case the Notice of Termination
may specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
15. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment shall be
made in the form of withholding taxes and shall not be paid to the Executive,
but shall be sent to the IRS in the ordinary course of the Company's payroll
withholding.
16. Miscellaneous. This Agreement is the joint and several
obligation of HUBCO and the Bank. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with, the laws of New Jersey.
This Agreement supersedes all prior
<PAGE>
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agreements and understandings with respect to the matters covered hereby,
including expressly it terminates the employment agreement among HUBCO and the
Bank and the Executive, dated September 5, 1989, as amended June 11, 1996. The
amendment or termination of this Agreement may be made only in a writing
executed by the Company and the Executive, and no amendment or termination of
this Agreement shall be effective unless and until made in such a writing. This
Agreement shall be binding upon any successor (whether direct or indirect, by
purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal to
the Executive and the Executive may not assign any of his rights or duties
hereunder but this Agreement shall be enforceable by the Executive's legal
representatives, executors or administrators. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
<PAGE>
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IN WITNESS WHEREOF, HUBCO, Inc. and Hudson United Bank each have
caused this Agreement to be signed by their duly authorized representatives
pursuant to the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first written
above.
ATTEST: HUBCO, INC.
/s/ D. Lynn Van Borkulo-Nuzzo By: /s/ Charles F.X. Poggi
- ------------------------------------ --------------------------
D. Lynn Van Borkulo-Nuzzo, Secretary Charles F.X. Poggi,
Chairman of the Compensation Committee
ATTEST: HUDSON UNITED BANK
/s/ D. Lynn Van Borkulo-Nuzzo By: /s/ Charles F.X. Poggi
- ------------------------------------ --------------------------
D. Lynn Van Borkulo-Nuzzo, Secretary Charles F.X. Poggi,
Chairman of the Compensation Committee
WITNESS:
/s/ D. Lynn Van Borkulo-Nuzzo /s/ Kenneth T. Neilson
- ------------------------------------ ------------------------------
D. Lynn Van Borkulo-Nuzzo Kenneth T. Neilson
CHANGE IN CONTROL,
SEVERANCE AND EMPLOYMENT AGREEMENT
FOR D. LYNN VAN BORKULO-NUZZO
(Double Trigger; Gross-Up)
THIS CHANGE IN CONTROL SEVERANCE AND EMPLOYMENT AGREEMENT (the
"Agreement"), is made as of this 1st day of January, 1997, among HUBCO, Inc.
("HUBCO"), a New Jersey corporation which maintains its principal office at 1000
MacArthur Boulevard., Mahwah, New Jersey, HUDSON UNITED BANK (the "Bank"), a New
Jersey chartered commercial bank, with an office at 1000 MacArthur Boulevard.,
Mahwah, New Jersey (HUBCO and the Bank collectively are referred to herein as
the "Company") and D. LYNN VAN BORKULO-NUZZO (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by HUBCO and the Bank for
many years, most recently as Executive Vice President and Corporate Secretary of
HUBCO and the Bank;
WHEREAS, the Executive throughout her tenure has worked diligently
in her position in the business of HUBCO and the Bank;
WHEREAS, the Board of Directors of HUBCO and the Bank believe that
the future services of the Executive are of great value to HUBCO and the Bank
and that it is important for the growth and development of HUBCO and the Bank
that the Executive continue in her position;
<PAGE>
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WHEREAS, if HUBCO receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of HUBCO (the "Board")
believes it is imperative that HUBCO and the Bank and the Board be able to rely
upon the Executive to continue in her position, and that they be able to receive
and rely upon her advice, if they request it, as to the best interests of the
Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to provide the Executive with certain
termination benefits in the event of a Change in Control, as hereinafter
defined;
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of her advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
1. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to materially perform her duties
for the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically
<PAGE>
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any such material failure and offering a reasonable opportunity to cure such
failure; (ii) the willful engaging by the Executive in material misconduct which
causes material injury to the Company as specified in a written notice to the
Executive 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 the Executive shall be
considered willful unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the action or omission was in the
best interest of the Company. The Company shall have the burden of proving cause
by clear and convincing evidence.
b. Change in Control.
(i) Definition. For purposes of this Agreement, a
"Change in Control" shall mean the occurrence of any of the following
events with respect to HUBCO:
(A) The acquisition of the beneficial ownership,
as defined under the Exchange Act, of 25% or more of HUBCO's voting
securities or all or substantially all of the assets of HUBCO by a
single person or entity or group of affiliated persons or entities;
(B) The merger, consolidation or combination of
HUBCO with an unaffiliated corporation in which the directors of
HUBCO as applicable immediately prior to such merger, consolidation
or combination constitute less than a majority of the board of
directors of the surviving, new or
<PAGE>
-4-
combined entity unless one-half of the board of directors of the
surviving, new or combined entity were directors of HUBCO
immediately prior to such transaction and HUBCO's chief executive
officer immediately prior to such transaction continues as the chief
executive officer of the surviving, new or combined entity; or
(C) During any period of two consecutive calendar
years, individuals who at the beginning of such period constitute
the Board of Directors of HUBCO cease for any reason to constitute
at least two-thirds thereof, unless the election or nomination for
the election by HUBCO's stockholders of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period;
or
(D) The transfer of all or substantially all of
HUBCO's assets or all or substantially all of the assets of its
primary subsidiaries.
(ii) Time of Change in Control. For purposes of this
Agreement, a Change in Control of HUBCO shall be deemed to occur on the
earlier of:
(A) The first date on which a single person or
entity or group of affiliated persons or entities acquire the
beneficial ownership of 25% or more of HUBCO's voting securities; or
(B) Forty-five (45) days prior to the date HUBCO
enters into a definitive agreement to merge, consolidate, combine or
sell the assets of HUBCO; provided however, that for purposes of any
resignation by the
<PAGE>
-5-
Executive, the Change in Control shall not be deemed to occur until
the consummation of the merger, consolidation, combination or sale,
as the case may be, except if this Agreement is not expressly
assumed in writing by the acquiring company, then the Change in
Control shall be deemed to occur the day before the consummation;
and further provided that if any definitive agreement to merge,
consolidate, combine or sell assets is terminated without
consummation of the acquisition, then no Change in Control shall
have been deemed to have occurred; or
(C) The date upon which the election of directors
occurs qualifying under Section b(i)(C) above.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) two years after the consummation of any event giving rise to the
Change in Control or (ii) the date the Executive would attain age 65.
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of her employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express written consent:
(i) The assignment to Executive of any duties
inconsistent with, or the reduction of authority, powers or
responsibilities associated with, Executive's position,
<PAGE>
-6-
title, duties, responsibilities and status with the Company immediately
prior to a Change in Control or any removal of Executive from, or any
failure to re-elect Executive to, any position(s) or office(s) Executive
held immediately prior to such Change in Control. A change in position,
title, duties, responsibilities and status or position(s) or office(s)
resulting from a Change in Control or from a merger or consolidation of
the Company into or with another bank or company shall not meet the
requirements of this paragraph if, and only if, the Executive's new title,
duties and responsibilities are accepted in writing by the Executive, in
the sole discretion of the Executive.
(ii) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or
the failure to award Executive any annual increases in accordance
herewith;
(iii) A failure by the Company to continue any bonus
plan in which Executive participated immediately prior to the Change in
Control or a failure by the Company to continue Executive as a participant
in such plan on at least the same basis as Executive participated in such
plan prior to the Change in Control;
(iv) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from her
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(v) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k)
<PAGE>
-7-
plan, the Company's pension plan, life insurance plan, health and accident
plan, disability plan, or stock option plan) in which Executive is
participating immediately prior to a Change in Control (except that the
Company may institute or continue plans, programs or arrangements
providing Executive with substantially similar benefits); the taking of
any action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under, any of
such plans, programs or arrangements; the failure to continue, or the
taking of any action which would deprive Executive, of any material fringe
benefit enjoyed by Executive immediately prior to such Change in Control;
or the failure by the Company to provide Executive with the number of paid
vacation days to which Executive was entitled immediately prior to such
Change in Control;
(vi) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by
any successor to the Company and to provide such assumption to the
Executive prior to any Change in Control; or
(vii) Any purported termination of Executive's
employment by the Company 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.
f. Voting Securities. "Voting securities" means HUBCO's common
stock, together with any preferred stock entitled to vote generally in elections
for directors or other matters. With respect to preferred stock, in determining
the percentage of beneficial ownership of
<PAGE>
-8-
voting securities, the number of votes to which the holder is entitled in the
election of directors with the common holders, and not the number of shares,
shall be the basis of the calculation.
2. Employment. During the Contract Period, the Company hereby agrees
to employ the Executive, and the Executive hereby accepts employment upon the
terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed as the Executive Vice President and Corporate Secretary of HUBCO and
the Bank, or such other corporate or divisional profit center as shall then be
the principal successor to the business, assets and properties of the Company,
with substantially the same titles and the same duties and responsibilities as
before the Change in Control. The Executive shall devote her full time and
attention to the business of the Company, and shall not during the Contract
Period be engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any of her investments which
do not require any substantial service on her part in the operation of such
investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for her services during the Contract Period as follows:
a. Annual Salary. An annual salary equal to the annual salary
in effect as of the Change in Control. The annual salary shall be payable in
installments in accordance with the Company's usual payroll method. The annual
salary shall not be reduced during the Contract Period.
<PAGE>
-9-
b. Annual Bonus. An annual cash bonus equal to the highest of
the bonuses paid to the Executive for the three fiscal years prior to the Change
in Control. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award her additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by her with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously reimbursed to her immediately prior to the
Change in Control.
b. Supplemental Executive Retirement Plan. During the Contract
Period, if the Executive was entitled to benefits under the Company's
Supplemental Executive Retirement Plan ("SERP") prior to the Change in Control,
the Executive shall be entitled to continued benefits under the SERP after the
Change in Control and such SERP may not be modified to reduce or eliminate the
accrual of or vesting of such benefits during the Contract Period.
<PAGE>
-10-
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, he shall be entitled to the same membership and/or use of
an automobile at least comparable to the automobile provided to her prior to the
Change in Control during the Contract Period.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and procedures of the
Company, as such existed immediately prior to the Change in Control. During the
Contract Period, the Executive also shall be entitled to hospital, health,
medical and life insurance, and any other benefits enjoyed, from time to time,
by senior officers of the Company, all upon terms as favorable as those enjoyed
by other senior officers of the Company. Notwithstanding anything in this
paragraph 5(d) to the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy is uniformly
applied to all officers of the Company (and any successor or acquirer of the
Company, if any), including the chief executive officer of such entities, then
no such change shall be deemed to be contrary to this paragraph.
6. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to her of the termination
which notice shall specify the reasons for the termination and provide, if
practical, an opportunity for the Executive to cure such Cause. In the event of
a valid termination for Cause the Executive shall not be entitled to any further
benefits under this Agreement.
<PAGE>
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7. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform her duties hereunder for 4
consecutive months in any 12 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall be entitled to
the payments and benefits provided under Section 9 hereof as if the Executive
had been terminated hereunder without Cause upon such date.
8. Death Benefits. Upon the Executive's death during the Contract
Period, the Executive shall be deemed to terminate without cause as of the date
of death and her estate shall be entitled to the payments and benefits provided
under Section 9 hereof as if the Executive had been terminated without cause
upon such date.
9. Termination Without Cause or Resignation.
a. Termination Without Cause. The Company may terminate the
Executive without Cause during the Contract Period by written notice to the
Executive.
b. Resignation For Good Reason. The Executive may resign for
Good Reason during the Contract Period upon prior written notice to the Company.
c. Payments and Benefits. If the Company terminates the
Executive's employment during the Contract Period without Cause or if the
Executive resigns for Good Reason under paragraph 9(b), the Company shall, as
promptly as practical but in no event later than 10 business days after the
termination of employment pay the Executive a lump sum (the "Lump Sum") equal to
3.0 times the sum of (i) the annual salary paid to the Executive immediately
prior to the Change in Control plus (ii) the highest annual incentive bonus paid
to the Executive for any fiscal year during each of the three fiscal years
immediately prior to the Change in Control. For
<PAGE>
-12-
these purposes, any deferral of salary or bonus by the Executive under the
Company's 401(k) plan or otherwise shall be included in salary and bonus. The
Company shall at the time of such payment also make any Gross-Up Payment due
under Section 10 hereof for the calendar year of the termination. The Company
also shall continue to provide the Executive, her spouse and eligible dependents
for a period of three years following the termination of employment, with
health, hospitalization and medical insurance, as were provided at the time of
the Change in Control, at the Company's cost, subject only to the responsibility
of the Executive to continue to pay a portion of the premium, as well as co-pays
or deductibles in such amounts as were paid by the Executive prior to the
termination.
d. No Duty to Mitigate. The Executive shall not have a duty to
mitigate the damages suffered by her in connection with the termination by the
Company of her employment without Cause under paragraph 9(a) or a resignation
under paragraph 9(b) during the Contract Period. The Company shall not be
entitled to offset from the payment due to the Executive hereunder any amounts
due from or claims against the Executive.
e. Legal Fees and Expenses. If the Company fails to pay the
Executive the Lump Sum due her under this Agreement or to provide her with the
health, hospitalization and medical insurance benefits due under this Agreement
or the Gross-Up Payment due under Section 10 hereof, the Executive, after giving
10 days' written notice to the Company identifying the Company's failure, shall
be entitled to recover from the Company, monthly upon demand, any and all of her
legal fees and other expenses incurred in connection with her enforcement
against the Company of the terms of this Agreement.
<PAGE>
-13-
10. Gross Up for Taxes.
a. Additional Payments. If, for any taxable year, Executive
shall be liable for the payment of an excise tax under Section 4999 or other
substitute or similar tax assessment (the "Excise Tax") of the Internal Revenue
Code of 1986, as amended (the "Code"), including the corresponding provisions of
any succeeding law, with respect to any payments under this Section 10 or any
payments and/or benefits under this Agreement or under any benefit plan of the
Company applicable to Executive individually or generally to executives or
employees of the Company, then, notwithstanding any other provisions of this
Agreement, the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on such payments and benefits and any federal, state
and local income tax and Excise Tax upon payments provided for in this Section
10, shall be equal to the payments due to the Executive hereunder and the
payments and/or benefits due to the Executive under any benefit plan of the
Company. Each Gross-Up Payment shall be made by domestic cashier's or
treasurer's check, certified check or wire transfer, upon the later of (i) five
(5) days after the date the Executive notifies the Company of its need to make
such Gross-Up Payment, or (ii) the date of any payment causing the liability for
such Excise Tax. The amount of any Gross-Up Payment under this section shall be
computed by a nationally recognized certified public accounting firm designated
jointly by the Company and the Executive. The cost of such services by the
accounting firm shall be paid by the Company. If the Company and the Executive
are unable to designate jointly the accounting firm, then the firm shall be the
accounting firm used by the Company immediately prior to the Change in Control.
<PAGE>
-14-
b. IRS Disputed Claims. The Executive shall notify the company
in writing of any claim by the Internal Revenue Service ("IRS") that, if
successful, would require the payment by the Company of a Gross-Up Payment in
addition to that payment previously paid by the Company pursuant to this
section. Such notification shall be given an soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim, the date
on which such claim is requested to be paid, and attach a copy of the IRS
notice. The Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which the Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) Take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claim;
<PAGE>
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provided, however that the Company shall pay directly all costs and expenses
(including legal and accounting fees, as well as other expenses and any
additional interest and penalties) incurred by the Executive and the Company in
connection with an IRS levy, contest or claim and provided further that the
Company shall not take any action or fail to make any Gross-Up Payment so as to
cause the assessment of any IRS levy and the Company shall cause any levy so
assessed to be immediately released by payment of the Gross-Up Amount, together
with all costs, interest and penalties.
11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except n the
course of her employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things,
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
<PAGE>
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12. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for a
period of 3 years from the date hereof (the "Initial Term") or until the end of
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term is always 3 years) unless on or before such date the Board
of Directors of HUBCO by resolution passed by a majority vote of the Directors
then in office, votes not to extend the Initial Term any further. The Company
shall promptly advise the Executive in writing of the passage of such resolution
and if it fails to do so, the passage of such resolution shall be ineffective.
b. No Effect Prior to Change in Control. Prior to a Change in
Control, this Agreement shall not affect any rights of the Company to terminate
the Executive or the benefits payable to the Executive. The rights and
liabilities provided hereunder shall only become effective upon a Change in
Control. If the employment of the Executive by the Company is ended for any
reason whatsoever prior to a Change in Control, this Agreement shall thereafter
be of no further force and effect.
13. Compensation and Benefits Provided Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that the
Executive shall
<PAGE>
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not be entitled to the benefits of any other plan or program of the Company or
agreement with the Company expressly providing for severance or termination pay
or post-employment medical benefits. In furtherance of the foregoing, this
Agreement is not in derogation of, but rather supplemental to, the rights and
benefits of the Executive, if any, under any stock option plan, restricted stock
plan, pension plan, 401(k) plan and SERP.
14. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than two
weeks nor more than six weeks after such Notice of Termination is given, except
in the case of termination of employment by the Company of the Executive for
Cause pursuant to Section 6 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal delivery or, if the individual is not
personally available, by certified mail to the last known address of the
individual. Upon the death of the Executive, no Notice of Termination need be
given.
15. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment shall be
made in the form of withholding taxes and
<PAGE>
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shall not be paid to the Executive, but shall be sent to the IRS in the ordinary
course of the Company's payroll withholding.
16. Miscellaneous. This Agreement is the joint and several
obligation of HUBCO and the Bank. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with, the laws of New Jersey.
This Agreement supersedes all prior agreements and understandings with respect
to the matters covered hereby, including expressly the Change in Control
Agreement among HUBCO and the Bank and the Executive, dated November 13, 1990,
as amended January 1, 1995. The amendment or termination of this Agreement may
be made only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any successor
(whether direct or indirect, by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the assets of the Company. This
Agreement is personal to the Executive and the Executive may not assign any of
her rights or duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
<PAGE>
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IN WITNESS WHEREOF, HUBCO, Inc. and Hudson United Bank each have
caused this Agreement to be signed by their duly authorized representatives
pursuant to the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first written
above.
ATTEST: HUBCO, INC.
/s/ Kenneth T. Neilson By: /s/ Charles F.X. Poggi
- -------------------------- --------------------------
Kenneth T. Neilson Charles F.X. Poggi,
Chairman, President & CEO Chairman of the Compensation Committee
ATTEST: HUDSON UNITED BANK
/s/ Kenneth T. Neilson By: /s/ Charles F.X. Poggi
- -------------------------- --------------------------
Kenneth T. Neilson Charles F.X. Poggi,
Chairman, President & CEO Chairman of the Compensation Committee
WITNESS:
/s/ Kenneth T. Neilson /s/ D. Lynn Van Borkulo-Nuzzo
- -------------------------- ------------------------------
Kenneth T. Neilson D. Lynn Van Borkulo-Nuzzo
CHANGE IN CONTROL,
SEVERANCE AND EMPLOYMENT AGREEMENT
FOR JOHN McILWAIN
(Single Trigger; Cutback)
THIS CHANGE IN CONTROL SEVERANCE AND EMPLOYMENT AGREEMENT (the
"Agreement"), is made this 1st day of January, 1997, among HUBCO, Inc.
("HUBCO"), a New Jersey corporation which maintains its principal office at 1000
MacArthur Boulevard., Mahwah, New Jersey, HUDSON UNITED BANK (the "Bank"), a New
Jersey chartered commercial bank, with an office at 1000 MacArthur Boulevard.,
Mahwah, New Jersey (HUBCO and the Bank collectively are referred to herein as
the "Company") and JOHN McILWAIN (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by HUBCO and the Bank for
many years, most recently as Executive Vice President and Chief Credit Officer.
WHEREAS, the Executive throughout his tenure has worked diligently
in his position in the business of HUBCO and the Bank;
WHEREAS, the Board of Directors of HUBCO and the Bank believe that
the future services of the Executive are of great value to HUBCO and the Bank
and that it is important for the growth and development of HUBCO and the Bank
that the Executive continue in his position;
<PAGE>
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WHEREAS, if HUBCO receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of HUBCO (the "Board")
believes it is imperative that HUBCO and the Bank and the Board be able to rely
upon the Executive to continue in his position, and that they be able to receive
and rely upon his advice, if they request it, as to the best interests of the
Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to provide the Executive with continued
employment or certain termination benefits in the event of a Change in Control,
as hereinafter defined;
WHEREAS, due to the uncertainties created in certain contracts by
the requirement that an executive have "good reason" before any resignation, it
is the intention of the Board that, among other things, the Executive is given
the right hereunder to resign at any time and for any reason and to receive the
payments and benefits provided hereunder if he works for the Company for 90 days
following a Change in Control.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
<PAGE>
-3-
1. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to materially perform his duties
for the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such material
failure and offering a reasonable opportunity to cure such failure; (ii) the
willful engaging by the Executive in material misconduct which causes material
injury to the Company as specified in a written notice to the Executive 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 the Executive shall be considered willful
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company. The Company shall have the burden of proving cause by clear and
convincing evidence.
b. Change in Control.
(i) Definition. For purposes of this Agreement, a
"Change in Control" shall mean the occurrence of any of the following
events with respect to HUBCO:
(A) The acquisition of the beneficial ownership,
as defined under the Exchange Act, of 25% or more of HUBCO's voting
securities or
<PAGE>
-4-
all or substantially all of the assets of HUBCO by a single person
or entity or group of affiliated persons or entities;
(B) The merger, consolidation or combination of
HUBCO with an unaffiliated corporation in which the directors of
HUBCO as applicable immediately prior to such merger, consolidation
or combination constitute less than a majority of the board of
directors of the surviving, new or combined entity unless one-half
of the board of directors of the surviving, new or combined entity
were directors of HUBCO immediately prior to such transaction and
HUBCO's chief executive officer immediately prior to such
transaction continues as the chief executive officer of the
surviving, new or combined entity; or
(C) During any period of two consecutive calendar
years, individuals who at the beginning of such period constitute
the Board of Directors of HUBCO cease for any reason to constitute
at least two-thirds thereof, unless the election or nomination for
the election by HUBCO's stockholders of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period;
or
(D) The transfer of all or substantially all of
HUBCO's assets or all or substantially all of the assets of its
primary subsidiaries.
(ii) Time of Change in Control. For purposes of this
Agreement, a Change in Control of HUBCO shall be deemed to occur on the
earlier of:
<PAGE>
-5-
(A) The first date on which a single person or
entity or group of affiliated persons or entities acquire the
beneficial ownership of 25% or more of HUBCO's voting securities; or
(B) Forty-five (45) days prior to the date HUBCO
enters into a definitive agreement to merge, consolidate, combine or
sell the assets of HUBCO; provided however, that for purposes of any
resignation by the Executive, the Change in Control shall not be
deemed to occur until the consummation of the merger, consolidation,
combination or sale, as the case may be, except if this Agreement is
not expressly assumed in writing by the acquiring company, then the
Change in Control shall be deemed to occur the day before the
consummation; and further provided that if any definitive agreement
to merge, consolidate, combine or sell assets is terminated without
consummation of the acquisition, then no Change in Control shall
have been deemed to have occurred; or
(C) The date upon which the election of directors
occurs qualifying under Section b(i)(C) above.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) two years after the consummation of any event giving rise to the
Change in Control or (ii) the date the Executive would attain age 65.
<PAGE>
-6-
d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express written consent:
(i) The assignment to Executive of any duties
inconsistent with, or the reduction of authority, powers or
responsibilities associated with, Executive's position, title, duties,
responsibilities and status with the Company immediately prior to a Change
in Control; any removal of Executive from, or any failure to re-elect
Executive to, any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in position, title, duties,
responsibilities and status or position(s) or office(s) resulting from a
Change in Control or from a merger or consolidation of the Company into or
with another bank or company shall not meet the requirements of this
paragraph if, and only if, the Executive's new title, duties and
responsibilities are accepted in writing by the Executive, in the sole
discretion of the Executive.
(ii) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or
the failure to award Executive any annual increases in accordance
herewith;
(iii) A failure by the Company to continue any bonus
plan in which Executive participated immediately prior to the Change in
Control or a failure by the
<PAGE>
-7-
Company to continue Executive as a participant in such plan on at least
the same basis as Executive participated in such plan prior to the Change
in Control;
(iv) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(v) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's pension plan, life
insurance plan, health and accident plan, disability plan, or stock option
plan) in which Executive is participating immediately prior to a Change in
Control (except that the Company may institute or continue plans, programs
or arrangements providing Executive with substantially similar benefits);
the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits
under, any of such plans, programs or arrangements; the failure to
continue, or the taking of any action which would deprive Executive, of
any material fringe benefit enjoyed by Executive immediately prior to such
Change in Control; or the failure by the Company to provide Executive with
the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control;
(vi) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by
any successor to the
<PAGE>
-8-
Company and to provide such assumption to the Executive prior to any
Change in Control; or
(vii) Any purported termination of Executive's
employment by the Company 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.
f. Voting Securities. "Voting securities" means HUBCO's common
stock, together with any preferred stock entitled to vote generally in elections
for directors or other matters. With respect to preferred stock, in determining
the percentage of beneficial ownership of voting securities, the number of votes
to which the holder is entitled in the election of directors with the common
holders, and not the number of shares, shall be the basis of the calculation.
2. Employment. During the Contract Period, the Company hereby agrees
to employ the Executive, and the Executive hereby accepts employment upon the
terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed as the Executive Vice President and Chief Credit Officer of HUBCO and
the Bank, or such other corporate or divisional profit center as shall then be
the principal successor to the business, assets and properties of the Company,
with substantially the same title and the same duties and responsibilities as
before the Change in Control. The Executive shall devote his full time and
attention to the business of the Company, and shall not during the Contract
Period be engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from
<PAGE>
-9-
managing any investments of his which do not require any substantial service on
his part in the operation of such investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. Annual Salary. An annual salary equal to the annual salary
in effect as of the Change in Control. The annual salary shall be payable in
installments in accordance with the Company's usual payroll method. The annual
salary shall not be reduced during the Contract Period.
b. Annual Bonus. An annual cash bonus equal to the highest of
the bonuses paid to the Executive for the three fiscal years prior to the Change
in Control. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of
<PAGE>
-10-
the Company in the same manner and to the same extent as such expenses were
previously reimbursed to him immediately prior to the Change in Control.
b. Supplemental Executive Retirement Plan. During the Contract
Period, if the Executive was entitled to benefits under the Company's
Supplemental Executive Retirement Plan ("SERP") prior to the Change in Control,
the Executive shall be entitled to continued benefits under the SERP after the
Change in Control and such SERP may not be modified to reduce or eliminate the
accrual of or vesting of such benefits during the Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, he shall be entitled to the same membership and/or use of
an automobile at least comparable to the automobile provided to him prior to the
Change in Control during the Contract Period.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and procedures of the
Company, as such existed immediately prior to the Change in Control. During the
Contract Period, the Executive also shall be entitled to hospital, health,
medical and life insurance, and any other benefits enjoyed, from time to time,
by senior officers of the Company, all upon terms as favorable as those enjoyed
by other senior officers of the Company. Notwithstanding anything in this
paragraph 5(d) to the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy is uniformly
applied to all officers of the Company (and any successor or acquirer of
<PAGE>
-11-
the Company, if any), including the chief executive officer of such entities,
then no such change shall be deemed to be contrary to this paragraph.
6. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the termination
which notice shall specify the reasons for the termination and provide, if
practical, an opportunity for the Executive to cure such Cause. In the event of
a valid termination for Cause the Executive shall not be entitled to any further
benefits under this Agreement.
7. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months in any 12 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall be entitled to
the payments and benefits provided under Section 9 hereof as if the Executive
had been terminated hereunder without Cause upon such date.
8. Death Benefits. Upon the Executive's death during the Contract
Period, the Executive shall be deemed to terminate without cause as of the date
of death and his estate shall be entitled to the payments and benefits provided
under Section 9 hereof as if the Executive had been terminated without cause
upon such date.
9. Termination Without Cause or Resignation.
a. Termination Without Cause. The Company may terminate the
Executive without Cause during the Contract Period by written notice to the
Executive.
<PAGE>
-12-
b. Resignation for Good Reason in First 90 Days After a Change
in Control. For the first 90 days after a Change in Control, the Executive may
resign for Good Reason during the Contract Period upon prior written notice to
the Company.
c. Resignation After First 90 Days. Commencing 90 calendar
days after a Change in Control and continuing thereafter during the Contract
Period, the Executive may resign for any reason whatsoever and need not specify
the reason, upon four weeks written notice to the Company and, for these
purposes, the effective date of the resignation and not the date of the notice
must be 90 calendar days after the Change in Control.
d. Payments and Benefits. If the Company terminates the
Executive's employment during the Contract Period without Cause or if the
Executive resigns for Good Reason under paragraph 9(b) or for any reason under
paragraph 9(c), the Company shall, as promptly as practical but in no event
later than 10 business days after the termination of employment pay the
Executive a lump sum (the "Lump Sum") equal to 3.0 times the sum of (i) the
annual salary paid to the Executive immediately prior to the Change in Control
plus (ii) the highest annual incentive bonus paid to the Executive for any
fiscal year during each of the three fiscal years immediately prior to the
Change in Control. For these purposes, any deferral of salary or bonus by the
Executive under the Company's 401(k) plan or otherwise shall be included in
salary and bonus. The Company also shall continue to provide the Executive, his
spouse and eligible dependents for a period of three years following the
termination of employment, with health, hospitalization and medical insurance,
as were provided at the time of the Change in Control, at the Company's cost,
subject only to the responsibility of the Executive to continue to pay a portion
of the premium, as
<PAGE>
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well as co-pays or deductibles in such amounts as were paid by the Executive
prior to the termination. The Lump Sum and the benefits provided hereunder shall
be subject to Section 10 hereof.
e. No Duty to Mitigate. The Executive shall not have a duty to
mitigate the damages suffered by him in connection with the termination by the
Company of his employment without Cause under paragraph 9(a) or a resignation
under paragraphs 9(b) and 9(c) during the Contract Period. The Company shall not
be entitled to offset from the payment due to the Executive hereunder any
amounts due from or claims against the Executive.
f. Legal Fees and Expenses. If the Company fails to pay the
Executive the Lump Sum due him under this Agreement or to provide him with the
health, hospitalization and medical insurance benefits due under this Agreement,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company, monthly
upon demand, any and all of his legal fees and other expenses incurred in
connection with his enforcement against the Company of the terms of this
Agreement.
10. Certain Reduction of Payments and Benefits.
a. Reduction. Anything in this Agreement to the contrary
notwithstanding, prior to the payment of the Lump Sum or the benefits payable
hereunder in connection with the Executive's termination of employment, the
certified public accountants for the Company immediately prior to a Change in
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 Executive whether any payment or distribution by the Company to
<PAGE>
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or for the benefit of the Executive (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 HUBCO 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 the Executive pursuant to this
Agreement in connection with the Executive's termination of employment (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 HUBCO
because of said Section 280G of the Code.
b. Executive Selection of Reductions. If under paragraph (a)
of this section the Certified Public Accountants determine that any payment
would more likely than not be nondeductible by HUBCO because of Section 280G of
the Code, HUBCO shall promptly give the Executive notice to that effect and a
copy of the detailed calculation thereof and of the Reduced Amount, and the
Executive 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 HUBCO in writing of his election within 5
business days of his receipt of notice. If no such election is made by the
Executive within such 5-day period, HUBCO may elect which and how much of the
Agreement Payments shall be eliminated or reduced (as long as after such
<PAGE>
-15-
election the aggregate present value of the Agreement Payments equals the
Reduced Amount) and shall notify the Executive 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 HUBCO and the Executive and shall be made as
promptly as practical but in any event within 20 days of a termination of
employment of the Executive. HUBCO may suspend for a period of up to 30 days
after termination of employment the payment of the Lump Sum and any other
benefits due to the Executive under this Agreement until the Certified Public
Accounts finish the determination and the Executive (or HUBCO, 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
Company shall pay to or distribute to or for the benefit of the Executive such
amounts as are then due to the Executive under this Agreement and shall promptly
pay to or distribute for the benefit of the Executive in the future such amounts
as they become due to the Executive under this Agreement.
c. Overpayments and Underpayments. 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 Company which should not have been
made ("Overpayment") or that additional Agreement Payments which will have not
been made by HUBCO 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 HUBCO or Executive which said Certified
<PAGE>
-16-
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 Executive which Executive shall repay to HUBCO together
with interest at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by
Executive to HUBCO in and 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 Company to or for the benefit of the Executive together with interest at
the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.
11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things,
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
<PAGE>
-17-
remaining valid portions. No violation of this Section 11 shall entitle the
Company to withhold any payment or benefit due the Executive hereunder.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for a
period of 3 years from the date hereof (the "Initial Term") or until the end of
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term is always 3 years) unless on or before such date the Board
of Directors of HUBCO by resolution passed by a majority vote of the Directors
then in office, votes not to extend the Initial Term any further. The Company
shall promptly advise the Executive in writing of the passage of such resolution
and if it fails to do so the passage of such resolution shall be ineffective.
b. No Effect Prior to Change in Control. Prior to a Change in
Control, this Agreement shall not affect any rights of the Company to terminate
the Executive or the benefits payable to the Executive. The rights and
liabilities provided hereunder shall only become effective upon a Change in
Control. If the employment of the Executive by the Company is ended for any
reason whatsoever prior to a Change in Control, this Agreement shall thereafter
be of no further force and effect.
<PAGE>
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13. Compensation and Benefits Provided Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that the
Executive shall not be entitled to the benefits of any other plan or program of
the Company or agreement with the Company expressly providing for severance or
termination pay or post-employment medical benefits. In furtherance of the
foregoing, this Agreement is not in derogation of, but rather supplemental to,
the rights and benefits of the Executive, if any, under any stock option plan,
restricted stock plan, pension plan, 401(k) plan and SERP.
14. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than
four weeks nor more than six weeks after such Notice of Termination is given,
except in the case of termination of employment by the Company of the Executive
for Cause pursuant to Section 6 hereof, in which case the Notice of Termination
may specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal
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delivery or, if the individual is not personally available, by certified mail to
the last known address of the individual. Upon the death of the Executive, no
Notice of Termination need be given.
15. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment shall be
made in the form of withholding taxes and shall not be paid to the Executive,
but shall be sent to the IRS in the ordinary course of the Company's payroll
withholding.
16. Miscellaneous. This Agreement is the joint and several
obligation of HUBCO and the Bank. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with, the laws of New Jersey.
This Agreement supersedes all prior agreements and understandings with respect
to the matters covered hereby. The amendment or termination of this Agreement
may be made only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any successor
(whether direct or indirect, by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the assets of the Company. This
Agreement is personal to the Executive and the Executive may not assign any of
his rights or duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
IN WITNESS WHEREOF, HUBCO, Inc. and Hudson United Bank each have
caused this Agreement to be signed by their duly authorized representatives
pursuant to the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first written
above.
ATTEST: HUBCO, INC.
/s/ D. Lynn Van Borkulo-Nuzzo By: /s/ Charles F.X. Poggi
- ----------------------------- --------------------------
D. Lynn Van Borkulo-Nuzzo Charles F.X. Poggi,
Secretary Chairman of the Compensation Committee
ATTEST: HUDSON UNITED BANK
/s/ D. Lynn Van Borkulo-Nuzzo By: /s/ Charles F.X. Poggi
- ----------------------------- --------------------------
D. Lynn Van Borkulo-Nuzzo Charles F.X. Poggi,
Secretary Chairman of the Compensation Committee
WITNESS:
/s/ Kenneth T. Neilson /s/ John McIlwain
- -------------------------- ------------------------------
Kenneth T. Neilson JOHN McILWAIN
CHANGE IN CONTROL,
SEVERANCE AND EMPLOYMENT AGREEMENT
FOR KAREN FOLEY
(Single Trigger; Cutback)
THIS CHANGE IN CONTROL SEVERANCE AND EMPLOYMENT AGREEMENT (the
"Agreement"), is made this 1st day of January, 1997, among HUBCO, Inc.
("HUBCO"), a New Jersey corporation which maintains its principal office at 1000
MacArthur Boulevard., Mahwah, New Jersey, HUDSON UNITED BANK (the "Bank"), a New
Jersey chartered commercial bank, with an office at 1000 MacArthur Boulevard.,
Mahwah, New Jersey (HUBCO and the Bank collectively are referred to herein as
the "Company") and KAREN FOLEY (the "Executive").
BACKGROUND
WHEREAS, the Executive has been employed by HUBCO and the Bank for
many years, most recently as First Senior Vice President and Director of Human
Resources;
WHEREAS, the Executive throughout her tenure has worked diligently
in her position in the business of HUBCO and the Bank;
WHEREAS, the Board of Directors of HUBCO and the Bank believe that
the future services of the Executive are of great value to HUBCO and the Bank
and that it is important for the growth and development of HUBCO and the Bank
that the Executive continue in her position;
<PAGE>
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WHEREAS, if HUBCO receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of HUBCO (the "Board")
believes it is imperative that HUBCO and the Bank and the Board be able to rely
upon the Executive to continue in her position, and that they be able to receive
and rely upon her advice, if they request it, as to the best interests of the
Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to provide the Executive with continued
employment or certain termination benefits in the event of a Change in Control,
as hereinafter defined;
WHEREAS, due to the uncertainties created in certain contracts by
the requirement that an executive have "good reason" before any resignation, it
is the intention of the Board that, among other things, the Executive is given
the right hereunder to resign at any time and for any reason and to receive the
payments and benefits provided hereunder if she works for the Company for 90
days following a Change in Control.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of her advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company and
the Executive, each intending to be legally bound hereby agree as follows:
<PAGE>
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1. Definitions
a. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to materially perform her duties
for the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such material
failure and offering a reasonable opportunity to cure such failure; (ii) the
willful engaging by the Executive in material misconduct which causes material
injury to the Company as specified in a written notice to the Executive 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 the Executive shall be considered willful
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company. The Company shall have the burden of proving cause by clear and
convincing evidence.
b. Change in Control.
(i) Definition. For purposes of this Agreement, a
"Change in Control" shall mean the occurrence of any of the following
events with respect to HUBCO:
(A) The acquisition of the beneficial ownership,
as defined under the Exchange Act, of 25% or more of HUBCO's voting
securities or
<PAGE>
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all or substantially all of the assets of HUBCO by a single person
or entity or group of affiliated persons or entities;
(B) The merger, consolidation or combination of
HUBCO with an unaffiliated corporation in which the directors of
HUBCO as applicable immediately prior to such merger, consolidation
or combination constitute less than a majority of the board of
directors of the surviving, new or combined entity unless one-half
of the board of directors of the surviving, new or combined entity
were directors of HUBCO immediately prior to such transaction and
HUBCO's chief executive officer immediately prior to such
transaction continues as the chief executive officer of the
surviving, new or combined entity; or
(C) During any period of two consecutive calendar
years, individuals who at the beginning of such period constitute
the Board of Directors of HUBCO cease for any reason to constitute
at least two-thirds thereof, unless the election or nomination for
the election by HUBCO's stockholders of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period;
or
(D) The transfer of all or substantially all of
HUBCO's assets or all or substantially all of the assets of its
primary subsidiaries.
(ii) Time of Change in Control. For purposes of this
Agreement, a Change in Control of HUBCO shall be deemed to occur on the
earlier of:
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(A) The first date on which a single person or
entity or group of affiliated persons or entities acquire the
beneficial ownership of 25% or more of HUBCO's voting securities; or
(B) Forty-five (45) days prior to the date HUBCO
enters into a definitive agreement to merge, consolidate, combine or
sell the assets of HUBCO; provided however, that for purposes of any
resignation by the Executive, the Change in Control shall not be
deemed to occur until the consummation of the merger, consolidation,
combination or sale, as the case may be, except if this Agreement is
not expressly assumed in writing by the acquiring company, then the
Change in Control shall be deemed to occur the day before the
consummation; and further provided that if any definitive agreement
to merge, consolidate, combine or sell assets is terminated without
consummation of the acquisition, then no Change in Control shall
have been deemed to have occurred; or
(C) The date upon which the election of directors
occurs qualifying under Section b(i)(C) above.
c. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) two years after the consummation of any event giving rise to the
Change in Control or (ii) the date the Executive would attain age 65.
<PAGE>
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d. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
e. Good Reason. When used with reference to a voluntary
termination by Executive of her employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express written consent:
(i) The assignment to Executive of any duties
inconsistent with, or the reduction of authority, powers or
responsibilities associated with, Executive's position, title, duties,
responsibilities and status with the Company immediately prior to a Change
in Control; any removal of Executive from, or any failure to re-elect
Executive to, any position(s) or office(s) Executive held immediately
prior to such Change in Control. A change in position, title, duties,
responsibilities and status or position(s) or office(s) resulting from a
Change in Control or from a merger or consolidation of the Company into or
with another bank or company shall not meet the requirements of this
paragraph if, and only if, the Executive's new title, duties and
responsibilities are accepted in writing by the Executive, in the sole
discretion of the Executive.
(ii) A reduction by the Company in Executive's annual
base compensation as in effect immediately prior to a Change in Control or
the failure to award Executive any annual increases in accordance
herewith;
(iii) A failure by the Company to continue any bonus
plan in which Executive participated immediately prior to the Change in
Control or a failure by the
<PAGE>
-7-
Company to continue Executive as a participant in such plan on at least
the same basis as Executive participated in such plan prior to the Change
in Control;
(iv) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from her
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(v) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's pension plan, life
insurance plan, health and accident plan, disability plan, or stock option
plan) in which Executive is participating immediately prior to a Change in
Control (except that the Company may institute or continue plans, programs
or arrangements providing Executive with substantially similar benefits);
the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits
under, any of such plans, programs or arrangements; the failure to
continue, or the taking of any action which would deprive Executive, of
any material fringe benefit enjoyed by Executive immediately prior to such
Change in Control; or the failure by the Company to provide Executive with
the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control;
(vi) The failure by the Company to obtain an assumption
in writing of the obligations of the Company to perform this Agreement by
any successor to the
<PAGE>
-8-
Company and to provide such assumption to the Executive prior to any
Change in Control; or
(vii) Any purported termination of Executive's
employment by the Company 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.
f. Voting Securities. "Voting securities" means HUBCO's common
stock, together with any preferred stock entitled to vote generally in elections
for directors or other matters. With respect to preferred stock, in determining
the percentage of beneficial ownership of voting securities, the number of votes
to which the holder is entitled in the election of directors with the common
holders, and not the number of shares, shall be the basis of the calculation.
2. Employment. During the Contract Period, the Company hereby agrees
to employ the Executive, and the Executive hereby accepts employment upon the
terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed as the First Senior Vice President and Director of Human Resources of
HUBCO and the Bank, or such other corporate or divisional profit center as shall
then be the principal successor to the business, assets and properties of the
Company, with substantially the same title and the same duties and
responsibilities as before the Change in Control. The Executive shall devote her
full time and attention to the business of the Company, and shall not during the
Contract Period be engaged in any other business activity. This paragraph shall
not be construed as preventing the Executive from
<PAGE>
-9-
managing any investments of her which do not require any substantial service on
her part in the operation of such investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for her services during the Contract Period as follows:
a. Annual Salary. An annual salary equal to the annual salary
in effect as of the Change in Control. The annual salary shall be payable in
installments in accordance with the Company's usual payroll method. The annual
salary shall not be reduced during the Contract Period.
b. Annual Bonus. An annual cash bonus equal to the highest of
the bonuses paid to the Executive for the three fiscal years prior to the Change
in Control. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award her additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by her with
respect to the business of
<PAGE>
-10-
the Company in the same manner and to the same extent as such expenses were
previously reimbursed to her immediately prior to the Change in Control.
b. Supplemental Executive Retirement Plan. During the Contract
Period, if the Executive was entitled to benefits under the Company's
Supplemental Executive Retirement Plan ("SERP") prior to the Change in Control,
the Executive shall be entitled to continued benefits under the SERP after the
Change in Control and such SERP may not be modified to reduce or eliminate the
accrual of or vesting of such benefits during the Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, she shall be entitled to the same membership and/or use of
an automobile at least comparable to the automobile provided to her prior to the
Change in Control during the Contract Period.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and procedures of the
Company, as such existed immediately prior to the Change in Control. During the
Contract Period, the Executive also shall be entitled to hospital, health,
medical and life insurance, and any other benefits enjoyed, from time to time,
by senior officers of the Company, all upon terms as favorable as those enjoyed
by other senior officers of the Company. Notwithstanding anything in this
paragraph 5(d) to the contrary, if the Company adopts any change in the benefits
provided for senior officers of the Company, and such policy is uniformly
applied to all officers of the Company (and any successor or acquirer of
<PAGE>
-11-
the Company, if any), including the chief executive officer of such entities,
then no such change shall be deemed to be contrary to this paragraph.
6. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to her of the termination
which notice shall specify the reasons for the termination and provide, if
practical, an opportunity for the Executive to cure such Cause. In the event of
a valid termination for Cause the Executive shall not be entitled to any further
benefits under this Agreement.
7. Disability. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform her duties hereunder for 4
consecutive months in any 12 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall be entitled to
the payments and benefits provided under Section 9 hereof as if the Executive
had been terminated hereunder without Cause upon such date.
8. Death Benefits. Upon the Executive's death during the Contract
Period, the Executive shall be deemed to terminate without cause as of the date
of death and her estate shall be entitled to the payments and benefits provided
under Section 9 hereof as if the Executive had been terminated without cause
upon such date.
9. Termination Without Cause or Resignation.
a. Termination Without Cause. The Company may terminate the
Executive without Cause during the Contract Period by written notice to the
Executive.
<PAGE>
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b. Resignation for Good Reason in First 90 Days After a Change
in Control. For the first 90 days after a Change in Control, the Executive may
resign for Good Reason during the Contract Period upon prior written notice to
the Company.
c. Resignation After First 90 Days. Commencing 90 calendar
days after a Change in Control and continuing thereafter during the Contract
Period, the Executive may resign for any reason whatsoever and need not specify
the reason, upon four weeks written notice to the Company and, for these
purposes, the effective date of the resignation and not the date of the notice
must be 90 calendar days after the Change in Control.
d. Payments and Benefits. If the Company terminates the
Executive's employment during the Contract Period without Cause or if the
Executive resigns for Good Reason under paragraph 9(b) or for any reason under
paragraph 9(c), the Company shall, as promptly as practical but in no event
later than 10 business days after the termination of employment pay the
Executive a lump sum (the "Lump Sum") equal to 2.0 times the sum of (i) the
annual salary paid to the Executive immediately prior to the Change in Control
plus (ii) the highest annual incentive bonus paid to the Executive for any
fiscal year during each of the three fiscal years immediately prior to the
Change in Control. For these purposes, any deferral of salary or bonus by the
Executive under the Company's 401(k) plan or otherwise shall be included in
salary and bonus. The Company also shall continue to provide the Executive, her
spouse and eligible dependents for a period of three years following the
termination of employment, with health, hospitalization and medical insurance,
as were provided at the time of the Change in Control, at the Company's cost,
subject only to the responsibility of the Executive to continue to pay a portion
of the premium, as
<PAGE>
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well as co-pays or deductibles in such amounts as were paid by the Executive
prior to the termination. The Lump Sum and the benefits provided hereunder shall
be subject to Section 10 hereof.
e. No Duty to Mitigate. The Executive shall not have a duty to
mitigate the damages suffered by her in connection with the termination by the
Company of her employment without Cause under paragraph 9(a) or a resignation
under paragraphs 9(b) and 9(c) during the Contract Period. The Company shall not
be entitled to offset from the payment due to the Executive hereunder any
amounts due from or claims against the Executive.
f. Legal Fees and Expenses. If the Company fails to pay the
Executive the Lump Sum due her under this Agreement or to provide her with the
health, hospitalization and medical insurance benefits due under this Agreement,
the Executive, after giving 10 days' written notice to the Company identifying
the Company's failure, shall be entitled to recover from the Company, monthly
upon demand, any and all of her legal fees and other expenses incurred in
connection with her enforcement against the Company of the terms of this
Agreement.
10. Certain Reduction of Payments and Benefits.
a. Reduction. Anything in this Agreement to the contrary
notwithstanding, prior to the payment of the Lump Sum or the benefits payable
hereunder in connection with the Executive's termination of employment, the
certified public accountants for the Company immediately prior to a Change in
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 Executive whether any payment or distribution by the Company to
<PAGE>
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or for the benefit of the Executive (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 HUBCO 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 the Executive pursuant to this
Agreement in connection with the Executive's termination of employment (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 HUBCO
because of said Section 280G of the Code.
b. Executive Selection of Reductions. If under paragraph (a)
of this section the Certified Public Accountants determine that any payment
would more likely than not be nondeductible by HUBCO because of Section 280G of
the Code, HUBCO shall promptly give the Executive notice to that effect and a
copy of the detailed calculation thereof and of the Reduced Amount, and the
Executive may then elect, in her 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 HUBCO in writing of her election within 5
business days of her receipt of notice. If no such election is made by the
Executive within such 5-day period, HUBCO may elect which and how much of the
Agreement Payments shall be eliminated or reduced (as long as after such
<PAGE>
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election the aggregate present value of the Agreement Payments equals the
Reduced Amount) and shall notify the Executive 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 HUBCO and the Executive and shall be made as
promptly as practical but in any event within 20 days of a termination of
employment of the Executive. HUBCO may suspend for a period of up to 30 days
after termination of employment the payment of the Lump Sum and any other
benefits due to the Executive under this Agreement until the Certified Public
Accounts finish the determination and the Executive (or HUBCO, 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
Company shall pay to or distribute to or for the benefit of the Executive such
amounts as are then due to the Executive under this Agreement and shall promptly
pay to or distribute for the benefit of the Executive in the future such amounts
as they become due to the Executive under this Agreement.
c. Overpayments and Underpayments. 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 Company which should not have been
made ("Overpayment") or that additional Agreement Payments which will have not
been made by HUBCO 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 HUBCO or Executive which said Certified
<PAGE>
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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 Executive which Executive shall repay to HUBCO together
with interest at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by
Executive to HUBCO in and 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 Company to or for the benefit of the Executive together with interest at
the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.
11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in the
course of her employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, the Executive shall not,
at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things,
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that she shall be subject to injunctive relief and equitable remedies as
a result of the breach of this section. The invalidity or unenforceability of
any provision of this Agreement shall not affect the force and effect of the
<PAGE>
-17-
remaining valid portions. No violation of this Section 11 shall entitle the
Company to withhold any payment or benefit due the Executive hereunder.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for a
period of 3 years from the date hereof (the "Initial Term") or until the end of
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional one year period on the anniversary date hereof (so
that the Initial Term is always 3 years) unless on or before such date the Board
of Directors of HUBCO by resolution passed by a majority vote of the Directors
then in office, votes not to extend the Initial Term any further. The Company
shall promptly advise the Executive in writing of the passage of such resolution
and if it fails to do so the passage of such resolution shall be ineffective.
b. No Effect Prior to Change in Control. Prior to a Change in
Control, this Agreement shall not affect any rights of the Company to terminate
the Executive or the benefits payable to the Executive. The rights and
liabilities provided hereunder shall only become effective upon a Change in
Control. If the employment of the Executive by the Company is ended for any
reason whatsoever prior to a Change in Control, this Agreement shall thereafter
be of no further force and effect.
<PAGE>
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13. Compensation and Benefits Provided Not in Derogation of Other
Benefits. Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that the
Executive shall not be entitled to the benefits of any other plan or program of
the Company or agreement with the Company expressly providing for severance or
termination pay or post-employment medical benefits. In furtherance of the
foregoing, this Agreement is not in derogation of, but rather supplemental to,
the rights and benefits of the Executive, if any, under any stock option plan,
restricted stock plan, pension plan, 401(k) plan and SERP.
14. Notice. During the Contract Period, any notice of termination of
the employment of the Executive by the Company or by the Executive to the
Company shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth, if necessary, in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the employment of the Executive or from the Company under the provision so
indicated; (iii) specify a date of termination, which shall be not less than
four weeks nor more than six weeks after such Notice of Termination is given,
except in the case of termination of employment by the Company of the Executive
for Cause pursuant to Section 6 hereof, in which case the Notice of Termination
may specify a date of termination as of the date such Notice of Termination is
given; and (iv) be given by personal
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delivery or, if the individual is not personally available, by certified mail to
the last known address of the individual. Upon the death of the Executive, no
Notice of Termination need be given.
15. Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes. Any Gross-Up Payment shall be
made in the form of withholding taxes and shall not be paid to the Executive,
but shall be sent to the IRS in the ordinary course of the Company's payroll
withholding.
16. Miscellaneous. This Agreement is the joint and several
obligation of HUBCO and the Bank. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with, the laws of New Jersey.
This Agreement supersedes all prior agreements and understandings with respect
to the matters covered hereby. The amendment or termination of this Agreement
may be made only in a writing executed by the Company and the Executive, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing. This Agreement shall be binding upon any successor
(whether direct or indirect, by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the assets of the Company. This
Agreement is personal to the Executive and the Executive may not assign any of
her rights or duties hereunder but this Agreement shall be enforceable by the
Executive's legal representatives, executors or administrators. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
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IN WITNESS WHEREOF, HUBCO, Inc. and Hudson United Bank each have
caused this Agreement to be signed by their duly authorized representatives
pursuant to the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first written
above.
ATTEST: HUBCO, INC.
/s/ D. Lynn Van Borkulo-Nuzzo By: /s/ Charles F.X. Poggi
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D. Lynn Van Borkulo-Nuzzo, Charles F.X. Poggi,
Secretary Chairman of the Compensation Committee
ATTEST: HUDSON UNITED BANK
/s/ D. Lynn Van Borkulo-Nuzzo By: /s/ Charles F.X. Poggi
- ----------------------------- ------------------------------
D. Lynn Van Borkulo-Nuzzo, Charles F.X. Poggi,
Secretary Chairman of the Compensation Committee
WITNESS:
/s/ Kenneth T. Neilson /s/ Karen Foley
- ----------------------------- ------------------------------
Kenneth T. Neilson Karen Foley
HUBCO SUPPLEMENTAL EMPLOYEES' RETIREMENT PLAN
Effective as of January 1, 1996, HUBCO, Inc. (the "Company") hereby
establishes the HUBCO Supplemental Employees' Retirement Plan (the "Plan"). The
Plan is intended to constitute an unfunded pension plan maintained primarily for
a select group of management or highly compensated employees which is exempt
from Parts 2, 3, and 4 of Title I of the Employee Retirement Income Security Act
of 1974, as amended. The Plan makes up the amount of the accrued benefits which
cannot be provided under the Employee's Retirement Plan of HUBCO, Inc. (the
"Pension Plan") as a result of the limitations on the amount of compensation
which can be taken into account under Section 401(a)(17) of the Internal Revenue
Code of 1986, as amended (the "Code") and the amount of benefits which may be
paid by the Pension Plan under Section 415 of the Code. The Plan is not a
qualified plan under the Code and benefits are paid by the Employer out of its
general assets when due.
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ARTICLE I
Definitions
1.1 "Actuarial Equivalent" means an amount or benefit of equal value based
on the interest rates and mortality tables under the Pension Plan at the time a
determination is being made.
1.2 "Board of Directors" means the Board of Directors of HUBCO, Inc.
1.3 "Company" means HUBCO, Inc.
1.4 "Compensation Committee" means the Compensation Committee of the Board
of Directors.
1.5 "Eligible Employee" means any person employed by the Employer who is a
participant in the Pension Plan and whose vested benefits payable under the
Pension Plan are subject to the Section 401(a)(17) Limitation or the Section 415
Limitation in any Plan Year.
1.6 "Employer" shall mean the Company, any successor thereto, and any
member of the controlled group of corporations which includes the Company which
adopts the Plan with the consent of the Board of Directors.
1.7 "Member" means an Eligible Employee who becomes a Member pursuant to
Article II.
1.8 "Normal Retirement Date" means the Normal Retirement Date as defined
in the Pension Plan.
1.9 "Pension Administration Committee" means the Pension Administration
Committee created by the Board of Directors, and any successor thereto.
1.10 "Pension Plan" means the Employee's Retirement Plan of HUBCO, Inc.
1.11 "Pension Plan Benefit" means the aggregate annual retirement benefit
payable to or on account of a Member from the Pension Plan.
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1.12 "Plan" means this HUBCO Supplemental Employees' Retirement Plan, as
set forth herein, as amended from time to time.
1.13 "Plan Year" means each twelve (12) consecutive month period
commencing each January 1 and ending on the following December 31.
1.14 "Section 401(a)(17) Limitation" means the limit on the amount of
compensation which can be taken into account under Section 401(a)(17) of the
Code, as adjusted from time to time by the Secretary of Treasury, for purposes
of computing the accrued benefits which can be paid from the Pension Plan.
1.15 "Section 415 Limitation" means the limitation under Section 415 of
the Code on annual benefits payable from the Pension Plan.
1.16 "SERP Benefit" shall mean the annual retirement benefit payable
pursuant to the terms of this Plan.
1.17 "Years of Service" means Years of Service as defined under the
Pension Plan.
1.18 For purposes of this Plan, unless the context requires otherwise, the
masculine includes the feminine, the singular the plural, and vice-versa. Any
reference to a "Section" or "Article" shall mean the indicated section or
article of this Plan unless otherwise specified.
ARTICLE II
Participation
An Eligible Employee shall become a Member upon appointment by the
Compensation Committee.
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ARTICLE III
SERP Benefit
3.1 Amount of SERP Benefit
Each Member who qualifies for a normal, early or deferred Pension Plan
Benefit under the Pension Plan shall be entitled to a SERP Benefit provided that
he is credited with at least five Years of Service on the date of his
retirement. The amount of a Member's SERP Benefit shall be equal to the
difference between (a) and (b) as follows:
(a) the amount of the Member's Pension Plan Benefit, expressed as a
straight life annuity with no ancillary benefits, which would have
been payable to the Member under the Pension Plan absent the Section
401(a)(17) and Section 415 Limitations; minus
(b) the Member's Pension Plan Benefit, expressed as a straight life
annuity with no ancillary benefits.
For purposes of computing the Member's Pension Plan Benefit under Section 3.1(a)
above, Compensation as defined in the Pension Plan shall be modified to include
one-third (1/3) of the incentive compensation paid to the Member by the
Employer.
3.2 Benefits Upon Reemployment
If a Member is rehired after he is entitled to a SERP Benefit, his SERP
Benefit shall not be paid during such period of reemployment prior to Normal
Retirement Date, but shall commence or resume not sooner than the first day of
the month following his subsequent retirement or separation. The SERP Benefit
payable after his subsequent retirement or separation shall be the benefits
earlier applicable, plus any additional benefits computed in accordance with
Section 3.1 insofar as additional employment entitled him to additional
benefits.
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ARTICLE IV
Vesting
A Member shall become vested in his SERP Benefit in accordance with the
same schedule and rules as are applicable in determining when he becomes vested
in his Pension Plan Benefit.
ARTICLE V
Death Benefits
5.1 Death Prior to SERP Benefit Commencement
If the Member dies prior to commencement of the SERP Benefit, the Member's
Beneficiary shall be entitled to a survivor annuity which is equal to the SERP
Benefit the Member would have received if he retired the day prior to his death
and elected a single life annuity form of payment under the Pension Plan. In the
Member's death occurs prior to the date the Member would have been eligible for
Early Retirement under the Pension Plan, the Member's Pension Plan Benefit for
purposes of Section 3.1(b) shall be actuarially reduced based on the interest
rate and mortality tables specified in the Pension Plan for the period of time
prior to the Member's attainment of age 55. Such SERP Benefit shall be payable
to the Beneficiary until the death of the Member's Beneficiary.
5.2 Death After SERP Benefit Commencement
If the Member dies after commencement of SERP Benefits, the Member's
Beneficiary shall receive a 100% survivor annuity equal to the SERP Benefit the
Member had been receiving. The survivor annuity shall be payable until the date
of the Beneficiary's death. Each Member shall designate a Beneficiary to receive
the SERP Benefit. The Member's Beneficiary designation for
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purposes of the Pension Plan shall not be controlling with respect to the
designation of Beneficiary hereunder. In the event the Member fails to designate
a Beneficiary, the SERP Benefit shall be payable to the Member's surviving
spouse, if any, or if no spouse survives the Member, the Actuarial Equivalent of
the SERP Benefit shall be payable to the Member's estate.
ARTICLE VI
Form of Payment
6.1 Time of Payment
Payment of a Member's SERP Benefit under Article III of this Plan will
commence at the same time as the Member's Pension Plan Benefit under the Pension
Plan. In the event the Member retires prior to reaching his Normal Retirement
Date, his SERP Benefit shall be reduced in accordance with the reduction factors
specified in the Pension Plan for Early Retirement.
6.2 Form of Payment
The Member's SERP Benefit shall be paid in a single life annuity.
ARTICLE VII
Administration
7.1 Pension Administration Committee
The Pension Administration Committee shall supervise the daily management
and administration of the Plan. The members of the Pension Administration
Committee shall serve without compensation.
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7.2 Responsibilities and Powers of the Pension Administration Committee
The Pension Administration Committee shall have the responsibility:
(a) To administer the Plan in accordance with the terms hereof, and
to exercise all powers specifically conferred upon the Pension Administration
Committee hereby or necessary to carry out the provisions thereof.
(b) To construe this Plan, which construction shall be conclusive,
correct any defects, supply omissions, and reconcile inconsistencies to the
extent necessary to effectuate the Plan.
(c) To keep all records relating to Members of the Plan and such
other records as are necessary for proper operation of the Plan.
7.3 Operation of the Pension Administration Committee
In carrying out the Pension Administration Committee's functions
hereunder:
(a) The Pension Administration Committee may adopt rules and
regulations necessary for the administration of the Plan and which are
consistent with the provisions hereof.
(b) All acts and decisions of the Pension Administration Committee
shall be approved by a majority of the members of the Pension Administration
Committee and shall apply uniformly to all Members in like circumstances.
Written records shall be kept of all acts and decisions.
(c) The Pension Administration Committee may authorize one or more
of its members to act on its behalf. The Pension Administration Committee may
also delegate, in writing, any of its responsibilities and powers to an
individual(s) who is not a Pension Administration Committee member.
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(d) The Pension Administration Committee shall have the right to
hire, at the expense of the Employer, such professional assistants and
consultants as it, in its sole discretion, deems necessary or advisable,
including, but not limited to, accountants, actuaries, consultants, counsel and
such clerical assistance as is necessary for proper discharge of its duties.
7.4 Indemnification
In addition to any other indemnification that a fiduciary, including but
not limited to a member of the Pension Administration Committee or Compensation
Committee, is entitled to, the Employer shall indemnify such fiduciary from all
claims for liability, loss or damage (including payment of expenses in
connection with defense against such claim) arising from any act or failure to
act which constitutes a breach of such individual's fiduciary responsibilities
with respect to this Plan under any aspects of the law.
ARTICLE VIII
Miscellaneous
8.1 Benefits Payable by the Employer
All benefits payable under this Plan constitute an unfunded obligation of
the Employer. Payments shall be made, as due, from the general funds of the
Employer. The Employer, at its option, may maintain one or more bookkeeping
reserve accounts to reflect its obligations under the Plan and may make such
investments as it may deems desirable to assist it in meeting with obligations.
Nothing contained in this Section 8.1 shall limit the ability of the Employer to
pay benefits hereunder through a Rabbi Trust. Any such investments shall be
assets of the Employer subject to
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claims of its general creditors. No person eligible for a benefit under this
Plan shall have any right, title to interest in any such investments.
8.2 Amendment or Termination
(a) The Board of Directors reserves the right to amend, modify, or restate
or terminate the Plan; provided, however, that no such action by the Board of
Directors shall reduce a Member's SERP Benefit accrued as of the time thereof.
The provisions of this Section prohibiting an action by the Board of Directors
which would reduce a Member's accrued SERP Benefit cannot be amended without the
consent of all Members (including those who have retired). Any amendment to the
Plan shall be made in writing by the Board of Directors, with or without a
meeting, or shall be made in writing by the Pension Administration Committee or
Compensation Committee, to the extent that Board of Directors has specifically
delegated the authority to make such amendment to the Plan the Pension
Administration Committee or Compensation Committee.
(b) This Plan constitutes the entire Agreement of the Company with respect
to the provision of SERP Benefits and can not be modified orally or in any
writing other than a resolution pursuant to the provisions of Section 8.2(a).
(c) If the Plan is terminated, a determination shall be made of each
Member's SERP Benefit as of the Plan termination date (determined in accordance
with Section 8.2(a)). The amount of such benefit shall be payable to the Member
in a single lump sum during the thirty day period following the Plan's
termination. The lump sum payment shall be actuarially equivalent to the SERP
Benefit determined as of the Plan termination date. In the event the termination
of the Plan occurs prior to the date the Member would be eligible for Early
Retirement under the Pension Plan, the Member's Pension Plan Benefit for
purposes of Section 3.1(b) shall be actuarially reduced
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based on the interest rate and mortality tables specified in the Pension Plan
for the period of time prior to the Member's attainment of age 55.
8.3 Status of Employment
Nothing herein contained shall be construed as conferring any rights upon
any Member or any person for a continuation of employment, nor shall it be
construed as limiting in any way the right of the Employer to discharge any
Member or to treat him without regard to the effect which such treatment might
have upon him as a Member of the Plan.
8.4 Payments to Minors and Incompetents
If a Member or beneficiary entitled to receive any benefit hereunder is a
minor or is deemed by the Pension Administration Committee or is adjudged to be
legally incapable of giving valid receipt and discharge for such benefits, they
will be paid to the duly appointed guardian of such minor or incompetent or to
such other legally appointed person as the Pension Administration Committee
might designate. Such payment shall, to the extent made, be deemed a complete
discharge of any liability for such payment under the Plan.
8.5 Inalienability of Benefits
The right of any person to any benefit or payment under the Plan shall not
be subject to voluntary or involuntary transfer, alienation or assignment, and,
to the fullest extent permitted by law, shall not be subject to attachment,
execution, garnishment, sequestration or other legal or equitable process. In
the event a person who is receiving or is entitled to receive benefits under the
Plan attempts to assign, transfer or dispose of such right, or if an attempt is
made to subject said right to such process, such assignment, transfer or
disposition shall be null and void.
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8.6 Governing Law
Except to the extent pre-empted by federal law, the provisions of the Plan
will be construed according to the laws of the State of New Jersey.
