=============================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 18, 1998
UNITED NATIONAL BANCORP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey
----------------------------------------------
(State or other jurisdiction of incorporation)
000-16931 22-2894827
------------------------- ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
1130 Route 22 East, Bridgewater, New Jersey 08807-0010
---------------------------------------------------------
(Address of principal executive offices)
(908) 429-2200
---------------------------------------------------
(Registrant's telephone number, including area code)
=============================================================
<PAGE>
Item 5. Other Events.
The Company entered into long-term employment and change in control agreements
with eight executive officers on August 18, 1998, which were effective as of
July 1, 1998. The agreements contain employment provisions for 5 years which may
be terminated under certain conditions with certain payments. In the event of a
change-in-control of the Company, as defined, the Executive would be entitled to
lump sum payments of 2.99 times (in the case of Mr. Gregor) or 2.0 times annual
compensation, as well as certain tax gross-up protections. These agreements are
modeled after (with certain changes) previous agreements with the Company
executives which generally were entered into in 1994 and expired June 30, 1998.
Item 7. Financial Statements and Exhibits.
Exhibits
(10) Material Contracts:
a) "Employment and Change-in-Control Agreement" by and between
Thomas C. Gregor, United National Bancorp and United National
Bank dated as of July 1, 1998.
b) "Employment and Change-in-Control Agreement" by and between
Warren R. Gerleit, United National Bancorp and United National
Bank dated as of July 1, 1998.
c) "Employment and Change-in-Control Agreement" by and between
Donald W. Malwitz, United National Bancorp and United National
Bank dated as of July 1, 1998.
d) "Employment and Change-in-Control Agreement" by and between
Ralph L. Straw, United National Bancorp and United National
Bank dated as of July 1, 1998.
e) "Employment and Change-in-Control Agreement" by and between
John J. Cannon, United National Bancorp and United National
Bank dated as of July 1, 1998.
f) "Employment and Change-in-Control Agreement" by and between
Joanne F. Herb, United National Bancorp and United National
Bank dated as of July 1, 1998.
g) "Employment and Change-in-Control Agreement" by and between
Richard Abrahamian, United National Bancorp and United
National Bank dated as of July 1, 1998.
h) "Employment and Change-in-Control Agreement" by and between
Richard G. Tappen, United National Bancorp, United National
Bank and United Commercial Capital Group, Inc. dated as of
July 1, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
UNITED NATIONAL BANCORP
Dated: August 28, 1998 By: /s/Thomas C. Gregor
-----------------------
Thomas C. Gregor
Chairman, President and
Chief Executive Officer
<PAGE>
Index to Exhibits
Exhibit No. Description
10(a) "Employment and Change-in-Control Agreement" by and between
Thomas C. Gregor, United National Bancorp and United National
Bank dated as of July 1, 1998.
10(b) "Employment and Change-in-Control Agreement" by and between
Warren R. Gerleit, United National Bancorp and United National
Bank dated as of July 1, 1998.
10(c) "Employment and Change-in-Control Agreement" by and between
Donald W. Malwitz, United National Bancorp and United National
Bank dated as of July 1, 1998.
10(d) "Employment and Change-in-Control Agreement" by and between
Ralph L. Straw, United National Bancorp and United National
Bank dated as of July 1, 1998.
10(e) "Employment and Change-in-Control Agreement" by and between
John J. Cannon, United National Bancorp and United National
Bank dated as of July 1, 1998.
10(f) "Employment and Change-in-Control Agreement" by and between
Joanne F. Herb, United National Bancorp and United National
Bank dated as of July 1, 1998.
10(g) "Employment and Change-in-Control Agreement" by and between
Richard Abrahamian, United National Bancorp and United
National Bank dated as of July 1, 1998.
10(h) "Employment and Change-in-Control Agreement" by and between
Richard G. Tappen, United National Bancorp, United National
Bank and United Commercial Capital Group, Inc. dated as of
July 1, 1998.
Exhibit 10(a)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
THOMAS C. GREGOR ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 5
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 6
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 7
4.2 Termination for Poor Performance .......................... 8
4.3 Termination Without Cause ................................. 9
4.4 Resignation for Good Reason ...............................10
4.5 Resignation Without Good Reason ...........................11
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................13
4.8 Mitigation ................................................13
4.9 Parachute Payment Tax Gross-Up.............................13
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................16
<PAGE>
5.2 Indemnification by Company For Executive's
Expenses ................................................16
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................17
5.4 Payroll and Withholding Taxes .............................18
5.5 Changes ...................................................18
5.6 Notices ...................................................18
5.7 Rights Absolute ...........................................19
5.8 Successors ................................................19
5.9 Non-Assignability .........................................19
5.10 Governing Law .............................................20
ii
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and Thomas C. Gregor (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I.
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Chairman, President and Chief Executive
Officer of UNB and as the Chairman, President and Chief Executive Officer of the
Bank or in comparable positions, or the same positions with such other corporate
or divisional centers as shall succeed to the business, assets and properties of
UNB or the Bank, as the case may be. The Executive shall devote his full time
and attention to the business of the Company, and shall not during the term be
engaged in any other business activity. This paragraph shall not be construed as
preventing the Executive from managing any investments of his or his family's
which do not require significant service in the operation of such investments,
nor as preventing his service on any other Board of Directors for which he
served as of the date hereof or serves hereafter with the consent of the Board
of Directors of UNB.
ARTICLE II.
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $280,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without
<PAGE>
the Executive's consent no more than once per year, with each such reduction
limited to ten percent (10%) of the prior year's Base Salary.
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
<PAGE>
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
<PAGE>
ARTICLE III.
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the Company, if and to the
extent that the Executive is not receiving from public or private insurance
policies paid for by the Company disability benefits equal to or greater than
his Base Salary prior to the termination, then for a period of six months
following the termination, the Company shall continue to pay to the Executive,
as severance pay, an amount which together with the disability insurance
payments equals 100% of his Base Salary; and (ii) after a Change in Control of
the Company, such termination shall be treated as a termination without cause
under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not
<PAGE>
receive, from life insurance policies paid for by the Company, proceeds equal to
or greater than 200% of the Base Salary as of the date of death, then the
Company shall continue to pay to the Executive's estate, as severance pay, the
Base Salary for up to six months or, if earlier, until such payments, together
with the proceeds of the life insurance policies, equal 200% of the Base Salary.
ARTICLE IV.
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the purpose of this Agreement,
"Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach or
willful neglect by the Executive of his duties as an Executive of the Company,
or persistent negligence or misconduct in the performance of such duties. For
purposes of this paragraph, no act or failure to act on the part of the
Executive shall be considered "willful" unless done or omitted not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company. Any acts undertaken by the Executive on the instruction
of the Board of Directors of UNB or the Bank shall not constitute Cause. If the
termination for Cause occurs after a Change in Control, the Executive shall not
be deemed to have been terminated for Cause hereunder unless and until: (i)
there shall have been delivered to the Executive a copy of a certification by a
majority of the non-officer members of the Board of Directors of the Bank
finding that, in the good faith opinion of such majority, the Executive was
guilty of conduct which was deemed to be Cause for termination and specifying
the particulars thereof in detail, and (ii) after reasonable notice to the
Executive there shall have been an opportunity for the Executive, together with
counsel to the Executive, to be heard before such non-officer members of the
Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose of this
Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
<PAGE>
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of two
years following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period. The
Executive shall be entitled to no other compensation or benefits hereunder after
the effective date of such termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.99, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive
<PAGE>
shall be entitled to no other compensation or benefits hereunder after the
effective date of such termination (except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect immediately prior to a Change in Control or as the same may
thereafter have been increased from time to time, (v) any failure to pay the
Executive the annual bonus as provided in Section 2.2, (vi) any requirement that
the Executive be relocated to an office which is more than 25 miles from the
facility to which the Executive was assigned immediately prior to the date of
the Change in Control, (vii) any change in or the failure of the Company to
continue in effect any of the benefit plans set forth herein, unless in any case
expressly agreed to by the Executive in writing, (viii) the failure by a
successor to the Company after a Change in Control to expressly assume in
writing for the benefit of the Executive the obligations of the Company
hereunder; or (iv) any purported
<PAGE>
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.99, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
<PAGE>
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the
Bank's assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote of a majority of the
current members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
<PAGE>
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
4.9......Parachute Payment Tax Gross-Up.
(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
<PAGE>
4.9 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 4.9, 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 as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise
<PAGE>
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;
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
<PAGE>
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.
ARTICLE V.
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the Executive
instituted a lawsuit or proceeding hereunder in bad faith or without reasonable
cause. The Executive shall not be entitled to reimbursement for his legal fees
if his termination of employment occurs prior to a Change in Control of the
Company.
<PAGE>
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete
<PAGE>
Period shall be reduced to zero, and in the case of termination for Poor
Performance prior to a Change in Control of the Company, it shall be reduced to
one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
<PAGE>
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Elizabeth Edwards /s/ THOMAS C. GREGOR
- --------------------------- --------------------------------
Witness THOMAS C. GREGOR
Exhibit 10(b)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
WARREN R. GERLEIT ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 5
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 6
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 7
4.2 Termination for Poor Performance .......................... 8
4.3 Termination Without Cause ................................. 9
4.4 Resignation for Good Reason ...............................10
4.5 Resignation Without Good Reason ...........................11
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................13
4.8 Mitigation ................................................13
4.9 Parachute Payment Tax Gross-Up.............................13
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................16
5.2 Indemnification by Company For Executive's
<PAGE>
Expenses ................................................16
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................17
5.4 Payroll and Withholding Taxes .............................18
5.5 Changes ...................................................18
5.6 Notices ...................................................18
5.7 Rights Absolute ...........................................19
5.8 Successors ................................................19
5.9 Non-Assignability .........................................19
5.10 Governing Law .............................................20
ii
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and Warren R. Gerleit (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I.
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Executive Vice President, Lending and Branch
Administration of the Bank or in comparable positions, or the same positions
with such other corporate or divisional centers as shall succeed to the
business, assets and properties of UNB or the Bank, as the case may be. The
Executive shall devote his full time and attention to the business of the
Company, and shall not during the term be engaged in any other business
activity. This paragraph shall not be construed as preventing the Executive from
managing any investments of his or his family's which do not require significant
service in the operation of such investments, nor as preventing his service on
any other Board of Directors for which he served as of the date hereof or serves
hereafter with the consent of the Board of Directors of UNB.
ARTICLE II.
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $165,300, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without
<PAGE>
the Executive's consent no more than once per year, with each such reduction
limited to ten percent (10%) of the prior year's Base Salary.
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
<PAGE>
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
<PAGE>
ARTICLE III.
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the Company, if and to the
extent that the Executive is not receiving from public or private insurance
policies paid for by the Company disability benefits equal to or greater than
his Base Salary prior to the termination, then for a period of six months
following the termination, the Company shall continue to pay to the Executive,
as severance pay, an amount which together with the disability insurance
payments equals 100% of his Base Salary; and (ii) after a Change in Control of
the Company, such termination shall be treated as a termination without cause
under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not
<PAGE>
receive, from life insurance policies paid for by the Company, proceeds equal to
or greater than 200% of the Base Salary as of the date of death, then the
Company shall continue to pay to the Executive's estate, as severance pay, the
Base Salary for up to six months or, if earlier, until such payments, together
with the proceeds of the life insurance policies, equal 200% of the Base Salary.
ARTICLE IV.
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the purpose of this Agreement,
"Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach or
willful neglect by the Executive of his duties as an Executive of the Company,
or persistent negligence or misconduct in the performance of such duties. For
purposes of this paragraph, no act or failure to act on the part of the
Executive shall be considered "willful" unless done or omitted not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company. Any acts undertaken by the Executive on the instruction
of the Board of Directors of UNB or the Bank shall not constitute Cause. If the
termination for Cause occurs after a Change in Control, the Executive shall not
be deemed to have been terminated for Cause hereunder unless and until: (i)
there shall have been delivered to the Executive a copy of a certification by a
majority of the non-officer members of the Board of Directors of the Bank
finding that, in the good faith opinion of such majority, the Executive was
guilty of conduct which was deemed to be Cause for
<PAGE>
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose of this
Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
<PAGE>
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of two
years following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period. The
Executive shall be entitled to no other compensation or benefits hereunder after
the effective date of such termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive
<PAGE>
shall be entitled to no other compensation or benefits hereunder after the
effective date of such termination (except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect immediately prior to a Change in Control or as the same may
thereafter have been increased from time to time, (v) any failure to pay the
Executive the annual bonus as provided in Section 2.2, (vi) any requirement that
the Executive be relocated to an office which is more than 25 miles from the
facility to which the Executive was assigned immediately prior to the date of
the Change in Control, (vii) any change in or the failure of the Company to
continue in effect any of the benefit plans set forth herein, unless in any case
expressly agreed to by the Executive in writing, (viii) the failure by a
successor to the Company after a Change in Control to expressly assume in
writing for the benefit of the Executive the obligations of the Company
hereunder; or (iv) any purported
<PAGE>
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
<PAGE>
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the
Bank's assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote of a majority of the
current members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
<PAGE>
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
4.9......Parachute Payment Tax Gross-Up.
(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
<PAGE>
4.9 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 4.9, 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 as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise
<PAGE>
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;
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
<PAGE>
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.
ARTICLE V.
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the Executive
instituted a lawsuit or proceeding hereunder in bad faith or without reasonable
cause. The Executive shall not be entitled to reimbursement for his legal fees
if his termination of employment occurs prior to a Change in Control of the
Company.
<PAGE>
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete Period
<PAGE>
shall be reduced to zero, and in the case of termination for Poor Performance
prior to a Change in Control of the Company, it shall be reduced to one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
<PAGE>
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Cynthia L. Gorawski /s/ Warren R. Gerleit
- --------------------------- --------------------------------
Witness WARREN R. GERLEIT
Exhibit 10(c)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
DONALD W. MALWITZ ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 5
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 6
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 7
4.2 Termination for Poor Performance .......................... 8
4.3 Termination Without Cause ................................. 9
4.4 Resignation for Good Reason ...............................10
4.5 Resignation Without Good Reason ...........................11
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................13
4.8 Mitigation ................................................13
4.9 Parachute Payment Tax Gross-Up.............................13
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................16
5.2 Indemnification by Company For Executive's
<PAGE>
Expenses ................................................16
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................17
5.4 Payroll and Withholding Taxes .............................18
5.5 Changes ...................................................18
5.6 Notices ...................................................18
5.7 Rights Absolute ...........................................19
5.8 Successors ................................................19
5.9 Non-Assignability .........................................19
5.10 Governing Law .............................................20
ii
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and Donald W. Malwitz (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I.
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Executive Vice President and Chief Financial
Officer of the Bank or in comparable positions, or the same positions with such
other corporate or divisional centers as shall succeed to the business, assets
and properties of UNB or the Bank, as the case may be. The Executive shall
devote his full time and attention to the business of the Company, and shall not
during the term be engaged in any other business activity. This paragraph shall
not be construed as preventing the Executive from managing any investments of
his or his family's which do not require significant service in the operation of
such investments, nor as preventing his service on any other Board of Directors
for which he served as of the date hereof or serves hereafter with the consent
of the Board of Directors of UNB.
ARTICLE II.
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $155,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without
<PAGE>
the Executive's consent no more than once per year, with each such reduction
limited to ten percent (10%) of the prior year's Base Salary.
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
<PAGE>
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
<PAGE>
ARTICLE III.
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the Company, if and to the
extent that the Executive is not receiving from public or private insurance
policies paid for by the Company disability benefits equal to or greater than
his Base Salary prior to the termination, then for a period of six months
following the termination, the Company shall continue to pay to the Executive,
as severance pay, an amount which together with the disability insurance
payments equals 100% of his Base Salary; and (ii) after a Change in Control of
the Company, such termination shall be treated as a termination without cause
under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not
<PAGE>
receive, from life insurance policies paid for by the Company, proceeds equal to
or greater than 200% of the Base Salary as of the date of death, then the
Company shall continue to pay to the Executive's estate, as severance pay, the
Base Salary for up to six months or, if earlier, until such payments, together
with the proceeds of the life insurance policies, equal 200% of the Base Salary.
ARTICLE IV.
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the purpose of this Agreement,
"Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach or
willful neglect by the Executive of his duties as an Executive of the Company,
or persistent negligence or misconduct in the performance of such duties. For
purposes of this paragraph, no act or failure to act on the part of the
Executive shall be considered "willful" unless done or omitted not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company. Any acts undertaken by the Executive on the instruction
of the Board of Directors of UNB or the Bank shall not constitute Cause. If the
termination for Cause occurs after a Change in Control, the Executive shall not
be deemed to have been terminated for Cause hereunder unless and until: (i)
there shall have been delivered to the Executive a copy of a certification by a
majority of the non-officer members of the Board of Directors of the Bank
finding that, in the good faith opinion of such majority, the Executive was
guilty of conduct which was deemed to be Cause for
<PAGE>
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose of this
Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
<PAGE>
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of two
years following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period. The
Executive shall be entitled to no other compensation or benefits hereunder after
the effective date of such termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive
<PAGE>
shall be entitled to no other compensation or benefits hereunder after the
effective date of such termination (except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect immediately prior to a Change in Control or as the same may
thereafter have been increased from time to time, (v) any failure to pay the
Executive the annual bonus as provided in Section 2.2, (vi) any requirement that
the Executive be relocated to an office which is more than 25 miles from the
facility to which the Executive was assigned immediately prior to the date of
the Change in Control, (vii) any change in or the failure of the Company to
continue in effect any of the benefit plans set forth herein, unless in any case
expressly agreed to by the Executive in writing, (viii) the failure by a
successor to the Company after a Change in Control to expressly assume in
writing for the benefit of the Executive the obligations of the Company
hereunder; or (iv) any purported
<PAGE>
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
<PAGE>
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the
Bank's assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote of a majority of the
current members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
<PAGE>
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
4.9......Parachute Payment Tax Gross-Up.
(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
<PAGE>
4.9 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 4.9, 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 as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise
<PAGE>
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;
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
<PAGE>
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.
ARTICLE V.
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the Executive
instituted a lawsuit or proceeding hereunder in bad faith or without reasonable
cause. The Executive shall not be entitled to reimbursement for his legal fees
if his termination of employment occurs prior to a Change in Control of the
Company.
<PAGE>
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete
<PAGE>
Period shall be reduced to zero, and in the case of termination for Poor
Performance prior to a Change in Control of the Company, it shall be reduced to
one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
<PAGE>
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Elizabeth Edwards /s/ Donald W. Malwitz
- --------------------------- --------------------------------
Witness DONALD W. MALWITZ
Exhibit 10(d)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
RALPH L. STRAW ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 5
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 6
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 7
4.2 Termination for Poor Performance .......................... 8
4.3 Termination Without Cause ................................. 9
4.4 Resignation for Good Reason ...............................10
4.5 Resignation Without Good Reason ...........................11
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................13
4.8 Mitigation ................................................13
4.9 Parachute Payment Tax Gross-Up.............................13
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................16
5.2 Indemnification by Company For Executive's
<PAGE>
Expenses ................................................16
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................17
5.4 Payroll and Withholding Taxes .............................18
5.5 Changes ...................................................18
5.6 Notices ...................................................18
5.7 Rights Absolute ...........................................19
5.8 Successors ................................................19
5.9 Non-Assignability .........................................19
5.10 Governing Law .............................................20
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and Ralph L. Straw (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I.
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Executive Vice President, General Counsel and
Cashier of the Bank or in comparable positions, or the same positions with such
other corporate or divisional centers as shall succeed to the business, assets
and properties of UNB or the Bank, as the case may be. The Executive shall
devote his full time and attention to the business of the Company, and shall not
during the term be engaged in any other business activity. This paragraph shall
not be construed as preventing the Executive from managing any investments of
his or his family's which do not require significant service in the operation of
such investments, nor as preventing his service on any other Board of Directors
for which he served as of the date hereof or serves hereafter with the consent
of the Board of Directors of UNB.
ARTICLE II.
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $138,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without
<PAGE>
the Executive's consent no more than once per year, with each such reduction
limited to ten percent (10%) of the prior year's Base Salary.
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
<PAGE>
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
<PAGE>
ARTICLE III.
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the Company, if and to the
extent that the Executive is not receiving from public or private insurance
policies paid for by the Company disability benefits equal to or greater than
his Base Salary prior to the termination, then for a period of six months
following the termination, the Company shall continue to pay to the Executive,
as severance pay, an amount which together with the disability insurance
payments equals 100% of his Base Salary; and (ii) after a Change in Control of
the Company, such termination shall be treated as a termination without cause
under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not
<PAGE>
receive, from life insurance policies paid for by the Company, proceeds equal to
or greater than 200% of the Base Salary as of the date of death, then the
Company shall continue to pay to the Executive's estate, as severance pay, the
Base Salary for up to six months or, if earlier, until such payments, together
with the proceeds of the life insurance policies, equal 200% of the Base Salary.
ARTICLE IV.
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the purpose of this Agreement,
"Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach or
willful neglect by the Executive of his duties as an Executive of the Company,
or persistent negligence or misconduct in the performance of such duties. For
purposes of this paragraph, no act or failure to act on the part of the
Executive shall be considered "willful" unless done or omitted not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company. Any acts undertaken by the Executive on the instruction
of the Board of Directors of UNB or the Bank shall not constitute Cause. If the
termination for Cause occurs after a Change in Control, the Executive shall not
be deemed to have been terminated for Cause hereunder unless and until: (i)
there shall have been delivered to the Executive a copy of a certification by a
majority of the non-officer members of the Board of Directors of the Bank
finding that, in the good faith opinion of such majority, the Executive was
guilty of conduct which was deemed to be Cause for
<PAGE>
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose of this
Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
<PAGE>
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of two
years following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period. The
Executive shall be entitled to no other compensation or benefits hereunder after
the effective date of such termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive
<PAGE>
shall be entitled to no other compensation or benefits hereunder after the
effective date of such termination (except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect immediately prior to a Change in Control or as the same may
thereafter have been increased from time to time, (v) any failure to pay the
Executive the annual bonus as provided in Section 2.2, (vi) any requirement that
the Executive be relocated to an office which is more than 25 miles from the
facility to which the Executive was assigned immediately prior to the date of
the Change in Control, (vii) any change in or the failure of the Company to
continue in effect any of the benefit plans set forth herein, unless in any case
expressly agreed to by the Executive in writing, (viii) the failure by a
successor to the Company after a Change in Control to expressly assume in
writing for the benefit of the Executive the obligations of the Company
hereunder; or (iv) any purported
<PAGE>
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
<PAGE>
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the Bank's
assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote of a majority of the
current members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
<PAGE>
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
4.9......Parachute Payment Tax Gross-Up.
(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
<PAGE>
4.9 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 4.9, 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 as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise
<PAGE>
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;
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
<PAGE>
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.
ARTICLE V.
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the Executive
instituted a lawsuit or proceeding hereunder in bad faith or without reasonable
cause. The Executive shall not be entitled to reimbursement for his legal fees
if his termination of employment occurs prior to a Change in Control of the
Company.
<PAGE>
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete
<PAGE>
Period shall be reduced to zero, and in the case of termination for Poor
Performance prior to a Change in Control of the Company, it shall be reduced to
one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST UNITED NATIONAL BANCORP
By: /s/ Thomas C. Gregor By: /s/ George W. Blank
---------------------- -------------------------
Chairman, President & CEO George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Thomas C. Gregor By: /s/ George W. Blank
---------------------- -------------------------
Chairman, President & CEO George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Elizabeth Edwards /s/ Ralph L. Straw
- --------------------------- --------------------------------
Witness RALPH L. STRAW
Exhibit 10(e)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
JOHN J. CANNON ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 5
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 6
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 7
4.2 Termination for Poor Performance .......................... 8
4.3 Termination Without Cause ................................. 9
4.4 Resignation for Good Reason ...............................10
4.5 Resignation Without Good Reason ...........................11
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................13
4.8 Mitigation ................................................13
4.9 Parachute Payment Tax Gross-Up.............................13
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................16
5.2 Indemnification by Company For Executive's
<PAGE>
Expenses ................................................16
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................17
5.4 Payroll and Withholding Taxes .............................18
5.5 Changes ...................................................18
5.6 Notices ...................................................18
5.7 Rights Absolute ...........................................19
5.8 Successors ................................................19
5.9 Non-Assignability .........................................19
5.10 Governing Law .............................................20
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and John J. Cannon (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I.
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Senior Vice President and Senior Trust
Officer of the Bank or in comparable positions, or the same positions with such
other corporate or divisional centers as shall succeed to the business, assets
and properties of UNB or the Bank, as the case may be. The Executive shall
devote his full time and attention to the business of the Company, and shall not
during the term be engaged in any other business activity. This paragraph shall
not be construed as preventing the Executive from managing any investments of
his or his family's which do not require significant service in the operation of
such investments, nor as preventing his service on any other Board of Directors
for which he served as of the date hereof or serves hereafter with the consent
of the Board of Directors of UNB.
ARTICLE II.
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $106,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without
<PAGE>
the Executive's consent no more than once per year, with each such reduction
limited to ten percent (10%) of the prior year's Base Salary.
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
<PAGE>
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
<PAGE>
ARTICLE III.
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the Company, if and to the
extent that the Executive is not receiving from public or private insurance
policies paid for by the Company disability benefits equal to or greater than
his Base Salary prior to the termination, then for a period of six months
following the termination, the Company shall continue to pay to the Executive,
as severance pay, an amount which together with the disability insurance
payments equals 100% of his Base Salary; and (ii) after a Change in Control of
the Company, such termination shall be treated as a termination without cause
under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not
<PAGE>
receive, from life insurance policies paid for by the Company, proceeds equal to
or greater than 200% of the Base Salary as of the date of death, then the
Company shall continue to pay to the Executive's estate, as severance pay, the
Base Salary for up to six months or, if earlier, until such payments, together
with the proceeds of the life insurance policies, equal 200% of the Base Salary.
ARTICLE IV.
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the purpose of this Agreement,
"Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach or
willful neglect by the Executive of his duties as an Executive of the Company,
or persistent negligence or misconduct in the performance of such duties. For
purposes of this paragraph, no act or failure to act on the part of the
Executive shall be considered "willful" unless done or omitted not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company. Any acts undertaken by the Executive on the instruction
of the Board of Directors of UNB or the Bank shall not constitute Cause. If the
termination for Cause occurs after a Change in Control, the Executive shall not
be deemed to have been terminated for Cause hereunder unless and until: (i)
there shall have been delivered to the Executive a copy of a certification by a
majority of the non-officer members of the Board of Directors of the Bank
finding that, in the good faith opinion of such majority, the Executive was
guilty of conduct which was deemed to be Cause for
<PAGE>
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose of this
Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
<PAGE>
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of two
years following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period. The
Executive shall be entitled to no other compensation or benefits hereunder after
the effective date of such termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive
<PAGE>
shall be entitled to no other compensation or benefits hereunder after the
effective date of such termination (except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect immediately prior to a Change in Control or as the same may
thereafter have been increased from time to time, (v) any failure to pay the
Executive the annual bonus as provided in Section 2.2, (vi) any requirement that
the Executive be relocated to an office which is more than 25 miles from the
facility to which the Executive was assigned immediately prior to the date of
the Change in Control, (vii) any change in or the failure of the Company to
continue in effect any of the benefit plans set forth herein, unless in any case
expressly agreed to by the Executive in writing, (viii) the failure by a
successor to the Company after a Change in Control to expressly assume in
writing for the benefit of the Executive the obligations of the Company
hereunder; or (iv) any purported
<PAGE>
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
<PAGE>
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the Bank's
assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote of a majority of the
current members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
<PAGE>
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
4.9......Parachute Payment Tax Gross-Up.
(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
<PAGE>
4.9 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 4.9, 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 as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise
<PAGE>
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;
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
<PAGE>
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.
ARTICLE V.
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the Executive
instituted a lawsuit or proceeding hereunder in bad faith or without reasonable
cause. The Executive shall not be entitled to reimbursement for his legal fees
if his termination of employment occurs prior to a Change in Control of the
Company.
<PAGE>
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete
<PAGE>
Period shall be reduced to zero, and in the case of termination for Poor
Performance prior to a Change in Control of the Company, it shall be reduced to
one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
<PAGE>
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Elizabeth Edwards /s/ John J. Cannon
- --------------------------- --------------------------------
Witness JOHN J. CANNON
Exhibit 10(f)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
JOANNE F. HERB ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 4
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 5
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 6
4.2 Termination for Poor Performance .......................... 7
4.3 Termination Without Cause ................................. 8
4.4 Resignation for Good Reason ................................9
4.5 Resignation Without Good Reason ...........................10
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................12
4.8 Mitigation ................................................12
4.9 Parachute Payment Tax Gross-Up.............................13
<PAGE>
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................15
5.2 Indemnification by Company For Executive's
Expenses ................................................15
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................16
5.4 Payroll and Withholding Taxes .............................17
5.5 Changes ...................................................17
5.6 Notices ...................................................17
5.7 Rights Absolute ...........................................18
5.8 Successors ................................................18
5.9 Non-Assignability .........................................18
5.10 Governing Law .............................................18
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and Joanne F. Herb (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout her tenure, has worked
diligently in her position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in her position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in her
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the Executive
<PAGE>
turns age 65 if it has not yet expired by such date. The Agreement may be sooner
terminated in accordance with the terms and conditions hereinafter set forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Senior Vice President and Strategic Planning
Officer of the Bank or in comparable positions, or the same positions with such
other corporate or divisional centers as shall succeed to the business, assets
and properties of the Bank, as the case may be. The Executive shall devote her
full time and attention to the business of the Company, and shall not during the
term be engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of her or
her family's which do not require significant service in the operation of such
investments, nor as preventing her service on any other Board of Directors for
which she served as of the date hereof or serves hereafter with the consent of
the Board of Directors of UNB.
ARTICLE II
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for her services during the term of this Agreement at a
minimum base salary per year of $90,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without the Executive's consent no more than once
per year, with each such reduction limited to ten percent (10%) of the prior
year's Base Salary.
<PAGE>
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the
<PAGE>
Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
ARTICLE III
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that she is unable to perform her
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the
<PAGE>
Company, if and to the extent that the Executive is not receiving from public or
private insurance policies paid for by the Company disability benefits equal to
or greater than her Base Salary prior to the termination, then for a period of
six months following the termination, the Company shall continue to pay to the
Executive, as severance pay, an amount which together with the disability
insurance payments equals 100% of her Base Salary; and (ii) after a Change in
Control of the Company, such termination shall be treated as a termination
without cause under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and her heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not receive, from life insurance policies
paid for by the Company, proceeds equal to or greater than 200% of the Base
Salary as of the date of death, then the Company shall continue to pay to the
Executive's estate, as severance pay, the Base Salary for up to six months or,
if earlier, until such payments, together with the proceeds of the life
insurance policies, equal 200% of the Base Salary.
ARTICLE IV
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the
<PAGE>
purpose of this Agreement, "Cause" shall mean willful misconduct, breach of
fiduciary duty involving personal benefit to the Executive, conviction of a
felony, willful breach or willful neglect by the Executive of her duties as an
Executive of the Company, or persistent negligence or misconduct in the
performance of such duties. For purposes of this paragraph, no act or failure to
act on the part of the Executive shall be considered "willful" unless done or
omitted not in good faith and without reasonable belief that the action or
omission was in the best interest of the Company. Any acts undertaken by the
Executive on the instruction of the Board of Directors of UNB or the Bank shall
not constitute Cause. If the termination for Cause occurs after a Change in
Control, the Executive shall not be deemed to have been terminated for Cause
hereunder unless and until: (i) there shall have been delivered to the Executive
a copy of a certification by a majority of the non-officer members of the Board
of Directors of the Bank finding that, in the good faith opinion of such
majority, the Executive was guilty of conduct which was deemed to be Cause for
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose
<PAGE>
of this Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of her duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, her Base Salary for a period of six
months following such termination and shall continue to pay for and to provide
medical insurance for the Executive and her family for such period, but the
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, her Base Salary during the period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the
<PAGE>
Executive and her family for such period. The Executive shall be entitled to no
other compensation or benefits hereunder after the effective date of such
termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive shall be entitled to no other
compensation or benefits hereunder after the effective date of such termination
(except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate her employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect
<PAGE>
immediately prior to a Change in Control or as the same may thereafter have been
increased from time to time, (v) any failure to pay the Executive the annual
bonus as provided in Section 2.2, (vi) any requirement that the Executive be
relocated to an office which is more than 25 miles from the facility to which
the Executive was assigned immediately prior to the date of the Change in
Control, (vii) any change in or the failure of the Company to continue in effect
any of the benefit plans set forth herein, unless in any case expressly agreed
to by the Executive in writing, (viii) the failure by a successor to the Company
after a Change in Control to expressly assume in writing for the benefit of the
Executive the obligations of the Company hereunder; or (iv) any purported
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
<PAGE>
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the Bank's
assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote
<PAGE>
of a majority of the current members on the Board at the time of their
nomination ("future designees") and (iii) were not nominated by a vote of the
Board which included the affirmative vote of a majority of the current members
and future designees, taken as a group, on the Board at the time of their
nomination.
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
<PAGE>
4.9......Parachute Payment Tax Gross-Up.
(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 4.9 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
4.9, 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>
(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 as 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>
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.
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the
<PAGE>
Executive instituted a lawsuit or proceeding hereunder in bad faith or without
reasonable cause. The Executive shall not be entitled to reimbursement for her
legal fees if her termination of employment occurs prior to a Change in Control
of the Company.
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity, whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or her retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if
<PAGE>
the termination of employment occurs after a Change in Control of the Company
the Non-Compete Period shall be reduced to zero, and in the case of termination
for Poor Performance prior to a Change in Control of the Company, it shall be
reduced to one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon her death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when
<PAGE>
deposited in the mail in the manner specified in this Section 5.6. Either party
by a notice in writing to the other party may change or designate the place for
receipt of such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, her heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST: UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Elizabeth Edwards /s/ Joanne F. Herb
- --------------------------- --------------------------------
Witness JOANNE F. HERB
Exhibit 10(g)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
RICHARD ABRAHAMIAN ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation
and
UNITED NATIONAL BANK
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 4
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 5
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 6
4.2 Termination for Poor Performance .......................... 7
4.3 Termination Without Cause ................................. 8
4.4 Resignation for Good Reason ................................9
4.5 Resignation Without Good Reason ...........................10
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................12
4.8 Mitigation ................................................12
4.9 Parachute Payment Tax Gross-Up.............................13
<PAGE>
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................15
5.2 Indemnification by Company For Executive's
Expenses ................................................15
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................16
5.4 Payroll and Withholding Taxes .............................17
5.5 Changes ...................................................17
5.6 Notices ...................................................17
5.7 Rights Absolute ...........................................18
5.8 Successors ................................................18
5.9 Non-Assignability .........................................18
5.10 Governing Law .............................................18
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank") (jointly hereinafter referred to as the "Company")
and Richard Abrahamian (hereinafter referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the Senior Vice President and Chief Accounting
Officer of the Bank or in comparable positions, or the same positions with such
other corporate or divisional centers as shall succeed to the business, assets
and properties of the Bank, as the case may be. The Executive shall devote his
full time and attention to the business of the Company, and shall not during the
term be engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of his or
his family's which do not require significant service in the operation of such
investments, nor as preventing his service on any other Board of Directors for
which he served as of the date hereof or serves hereafter with the consent of
the Board of Directors of UNB.
ARTICLE II
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $103,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without the Executive's consent no more than once
per year, with each such reduction limited to ten percent (10%) of the prior
year's Base Salary.
<PAGE>
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the
<PAGE>
Executive in such Stock Plans shall mean that the Executive is eligible to
receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
ARTICLE III
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the
<PAGE>
Company, if and to the extent that the Executive is not receiving from public or
private insurance policies paid for by the Company disability benefits equal to
or greater than his Base Salary prior to the termination, then for a period of
six months following the termination, the Company shall continue to pay to the
Executive, as severance pay, an amount which together with the disability
insurance payments equals 100% of his Base Salary; and (ii) after a Change in
Control of the Company, such termination shall be treated as a termination
without cause under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not receive, from life insurance policies
paid for by the Company, proceeds equal to or greater than 200% of the Base
Salary as of the date of death, then the Company shall continue to pay to the
Executive's estate, as severance pay, the Base Salary for up to six months or,
if earlier, until such payments, together with the proceeds of the life
insurance policies, equal 200% of the Base Salary.
ARTICLE IV
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the
<PAGE>
purpose of this Agreement, "Cause" shall mean willful misconduct, breach of
fiduciary duty involving personal benefit to the Executive, conviction of a
felony, willful breach or willful neglect by the Executive of his duties as an
Executive of the Company, or persistent negligence or misconduct in the
performance of such duties. For purposes of this paragraph, no act or failure to
act on the part of the Executive shall be considered "willful" unless done or
omitted not in good faith and without reasonable belief that the action or
omission was in the best interest of the Company. Any acts undertaken by the
Executive on the instruction of the Board of Directors of UNB or the Bank shall
not constitute Cause. If the termination for Cause occurs after a Change in
Control, the Executive shall not be deemed to have been terminated for Cause
hereunder unless and until: (i) there shall have been delivered to the Executive
a copy of a certification by a majority of the non-officer members of the Board
of Directors of the Bank finding that, in the good faith opinion of such
majority, the Executive was guilty of conduct which was deemed to be Cause for
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose
<PAGE>
of this Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of six
months following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the
<PAGE>
Executive and his family for such period. The Executive shall be entitled to no
other compensation or benefits hereunder after the effective date of such
termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive shall be entitled to no other
compensation or benefits hereunder after the effective date of such termination
(except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect
<PAGE>
immediately prior to a Change in Control or as the same may thereafter have been
increased from time to time, (v) any failure to pay the Executive the annual
bonus as provided in Section 2.2, (vi) any requirement that the Executive be
relocated to an office which is more than 25 miles from the facility to which
the Executive was assigned immediately prior to the date of the Change in
Control, (vii) any change in or the failure of the Company to continue in effect
any of the benefit plans set forth herein, unless in any case expressly agreed
to by the Executive in writing, (viii) the failure by a successor to the Company
after a Change in Control to expressly assume in writing for the benefit of the
Executive the obligations of the Company hereunder; or (iv) any purported
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
<PAGE>
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the Bank's
assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote
<PAGE>
of a majority of the current members on the Board at the time of their
nomination ("future designees") and (iii) were not nominated by a vote of the
Board which included the affirmative vote of a majority of the current members
and future designees, taken as a group, on the Board at the time of their
nomination.
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
<PAGE>
4.9......Parachute Payment Tax Gross-Up.
(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 4.9 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
4.9, 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>
(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 as 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>
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.
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the
<PAGE>
Executive instituted a lawsuit or proceeding hereunder in bad faith or without
reasonable cause. The Executive shall not be entitled to reimbursement for his
legal fees if his termination of employment occurs prior to a Change in Control
of the Company.
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity, whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete Period shall be reduced
to zero, and in the case of termination for Poor Performance prior to a Change
in Control of the Company, it shall be reduced to one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST: UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
/s/ Brigitte Besanceney /s/ Richard Abrahamian
- --------------------------- --------------------------------
Witness RICHARD ABRAHAMIAN
Exhibit 10(h)
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
BY AND BETWEEN
RICHARD G. TAPPEN ("Executive")
UNITED NATIONAL BANCORP, a New Jersey Corporation,
UNITED NATIONAL BANK
and
UNITED COMMERCIAL CAPITAL GROUP, INC.
DATED AS OF JULY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
BACKGROUND .................................................................. 1
ARTICLE I
.........TERM OF EMPLOYMENT AND DUTIES
1.1 Agreement ................................................. 2
1.2 Term ...................................................... 2
1.3 Position .................................................. 3
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Base Compensation ......................................... 3
2.2 Additional Incentive Compensation ......................... 4
2.3 Retirement Plans .......................................... 4
2.4 Medical, Disability and Life Insurance Plans .............. 4
2.5 Stock Award Plans ......................................... 5
2.6 No Adverse Change After Change in Control.................. 5
2.7 Expense Reimbursement ..................................... 5
ARTICLE III
DISABILITY OR DEATH
3.1 Termination for Disability ................................ 6
3.2 Termination Due to Death .................................. 6
ARTICLE IV
OTHER TERMINATION
4.1 Termination for Cause ..................................... 7
4.2 Termination for Poor Performance .......................... 8
4.3 Termination Without Cause ................................. 9
4.4 Resignation for Good Reason ...............................10
4.5 Resignation Without Good Reason ...........................11
4.6 Definition of Change in Control ...........................11
4.7 Notice ....................................................13
4.8 Mitigation ................................................13
4.9 Parachute Payment Tax Gross-Up.............................13
ARTICLE V
MISCELLANEOUS
5.1 Severance Compensation and Benefits Not in
Derogation of Other Benefits ............................16
5.2 Indemnification by Company For Executive's
<PAGE>
Expenses ................................................16
5.3 Non-Disclosure of Confidential Information
and Non-Compete .........................................17
5.4 Payroll and Withholding Taxes .............................18
5.5 Changes ...................................................18
5.6 Notices ...................................................18
5.7 Rights Absolute ...........................................19
5.8 Successors ................................................19
5.9 Non-Assignability .........................................19
5.10 Governing Law .............................................20
<PAGE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 1998 by and
between United National Bancorp, a New Jersey corporation ("UNB"), United
National Bank (the "Bank"), United Commercial Capital Group, Inc. (jointly
hereinafter referred to as the "Company") and Richard G. Tappen (hereinafter
referred to as the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Company; and
WHEREAS, the Executive, throughout his tenure, has worked
diligently in his position for the business of the Bank and UNB; and
WHEREAS, the Boards of Directors of the Bank and UNB
(collectively, the "Boards") are of the opinion that the future services of the
Executive are of substantial value to the Bank and UNB and that it is important
for the growth and development of the Bank and UNB that the Executive continue
in his position; and
WHEREAS, if the Company should receive any proposal from a
third party concerning a possible business combination with, or acquisition of
the equity securities of, the Company, the Boards believe it is imperative that
the Company and the Boards be able to rely upon the Executive to continue in his
position, and that the Boards be able to receive and rely upon the advice of the
Executive, if requested, as to the best interests of the Company and its
shareholders, without concern that the Executive may be distracted by personal
uncertainties or risks created by such a proposal; and
<PAGE>
WHEREAS, to achieve such a goal, and to retain the services of
the Executive prior to any such activity, the Boards and the Executive have
agreed to enter into this Employment Agreement.
NOW, THEREFORE, to assure the Company that it will retain the
continued dedication of the Executive as well as the availability of the advice
and counsel of the Executive notwithstanding the possibility or occurrence of a
Change in Control (as hereafter defined) 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:
ARTICLE I.
TERM OF EMPLOYMENT AND DUTIES
1.1......Agreement. The Company hereby employs the Executive
and the Executive hereby agrees to render such services to the Company on the
terms and conditions set forth in this Agreement.
1.2......Term. The term of employment under this Agreement
(hereinafter the "term") shall commence on July 1, 1998, and shall terminate
June 30, 2003, except that if there shall occur a Change in Control of the
Company during such period, the term shall end on the third anniversary of the
Change in Control (regardless of whether such third anniversary occurs before or
after June 30, 2003). If the Executive's employment by the Company continues
beyond June 30, 2003 and this Agreement is not renewed, the severance provisions
of Section 4.3 shall nonetheless continue until June 30, 2005. Notwithstanding
the foregoing, the term shall expire on the date the
<PAGE>
Executive turns age 65 if it has not yet expired by such date. The Agreement may
be sooner terminated in accordance with the terms and conditions hereinafter set
forth.
1.3......Position. During the term of this Agreement, the
Executive shall be employed as the President and COO, United Commercial Capital
Group or in comparable positions, or the same positions with such other
corporate or divisional centers as shall succeed to the business, assets and
properties of UNB or the Bank, as the case may be. The Executive shall devote
his full time and attention to the business of the Company, and shall not during
the term be engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of his or
his family's which do not require significant service in the operation of such
investments, nor as preventing his service on any other Board of Directors for
which he served as of the date hereof or serves hereafter with the consent of
the Board of Directors of UNB.
ARTICLE II.
COMPENSATION AND BENEFITS
2.1......Base Compensation. The Company will compensate and
pay the Executive for his services during the term of this Agreement at a
minimum base salary per year of $138,000, with annual increases in amounts to be
determined by the Board of Directors of UNB each year ("Base Salary"). In no
event shall the Base Salary of the Executive under this Agreement in effect at
any particular time be reduced without the prior written consent of Executive,
except that prior to a Change in Control of the Company (but not thereafter),
the Base Salary may be reduced without
<PAGE>
the Executive's consent no more than once per year, with each such reduction
limited to ten percent (10%) of the prior year's Base Salary.
2.2......Additional Incentive Compensation. During the term of
this Agreement, the Executive shall also be entitled to participate in other
executive incentive compensation arrangements, similar to the incentive
compensation arrangements now in effect for executives of the Company pursuant
to which executives are paid an annual bonus; provided, however, that prior to a
Change in Control of the Company the participation of the Executive in such
arrangements shall mean that the Executive is eligible for an incentive award
but shall not obligate the Company to make any incentive award or pay any
incentive compensation to Executive; provided further, however, that after a
Change in Control of the Company, the Executive must be paid an annual bonus
that is at least as large as the highest bonus paid to the Executive in any year
during the three years immediately prior to a Change in Control.
2.3......Retirement Plans. During the term of this Agreement,
the Executive shall be entitled to participate in any plans of the Company
relating to pension, profit sharing, benefit equalization, or other programs now
in effect or that the Company may hereafter adopt for the benefit of its
employees or executives.
2.4......Medical, Disability and Life Insurance Plans. During
the term of this Agreement, the Executive shall be entitled to participate in
any medical coverage, hospitalization, medical reimbursement, disability, and
life insurance plans now in effect or that the Company may hereafter adopt.
<PAGE>
2.5......Stock Award Plans. During the term of this Agreement,
the Executive shall be entitled to participate in and receive the benefits of
any stock option, restricted stock or similar stock based compensation plans
covering executives of the Company which presently exist or may come into
existence hereafter (a "Stock Plan"); provided, however, that the participation
of the Executive in such Stock Plans shall mean that the Executive is eligible
to receive benefits and awards but shall not obligate the Company to grant the
Executive any particular benefits or awards.
2.6......No Adverse Change After Change in Control. Before a
Change-in-Control of the Company, the Company may change or terminate any
benefit plan or bonus plan provided to the Executive. Following a Change in
Control of the Company, the Company may not change or terminate any plans set
forth above under Sections 2.2, 2.3, 2.4 and 2.5, which would adversely affect
the Executive's rights or benefits thereunder unless such change is consented to
by the Executive or occurs as a consequence of a change in law or regulation.
2.7......Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive or otherwise provide for or
pay for all reasonable expenses incurred by the Executive in furtherance or in
connection with the business of the Company including but not limited to
automobile and travel expenses, and all reasonable entertainment expenses,
subject to such reasonable limitations as may be established by the Boards from
time to time. If such expenses are paid by the Executive, the Company will
reimburse the Executive therefor.
<PAGE>
ARTICLE III.
DISABILITY OR DEATH
3.1......Termination for Disability. If the Executive shall
become disabled or incapacitated to the extent that he is unable to perform his
duties for a period of four (4) months in any twelve (12) month period, the
Company may terminate the employment of the Executive by written notice of
termination provided to the Executive. In the event of a termination for
disability or incapacity hereunder, the Executive shall have no right to
compensation or other benefits for any period after the date of termination,
except as follows: (i) before a Change in Control of the Company, if and to the
extent that the Executive is not receiving from public or private insurance
policies paid for by the Company disability benefits equal to or greater than
his Base Salary prior to the termination, then for a period of six months
following the termination, the Company shall continue to pay to the Executive,
as severance pay, an amount which together with the disability insurance
payments equals 100% of his Base Salary; and (ii) after a Change in Control of
the Company, such termination shall be treated as a termination without cause
under Section 4.3(c) hereof.
3.2......Termination Due to Death. Employment of the Executive
shall automatically terminate by reason of the death of the Executive and no
notice of termination shall be required. In the event of a termination due to
the death of the Executive, either before or after a Change in Control of the
Company, the estate of the Executive and his heirs and beneficiaries shall have
no right to compensation or other benefits for any period after the date of
death except as follows: if and to the extent that the Executive's estate,
designated beneficiaries and heirs do not
<PAGE>
receive, from life insurance policies paid for by the Company, proceeds equal to
or greater than 200% of the Base Salary as of the date of death, then the
Company shall continue to pay to the Executive's estate, as severance pay, the
Base Salary for up to six months or, if earlier, until such payments, together
with the proceeds of the life insurance policies, equal 200% of the Base Salary.
ARTICLE IV.
OTHER TERMINATION
4.1......Termination For Cause.
(a)......The Company shall have the right, at any time upon
prior written Notice of Termination (as herein defined), to terminate the
employment of the Executive for Cause. For the purpose of this Agreement,
"Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach or
willful neglect by the Executive of his duties as an Executive of the Company,
or persistent negligence or misconduct in the performance of such duties. For
purposes of this paragraph, no act or failure to act on the part of the
Executive shall be considered "willful" unless done or omitted not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company. Any acts undertaken by the Executive on the instruction
of the Board of Directors of UNB or the Bank shall not constitute Cause. If the
termination for Cause occurs after a Change in Control, the Executive shall not
be deemed to have been terminated for Cause hereunder unless and until: (i)
there shall have been delivered to the Executive a copy of a certification by a
majority of the non-officer members of the Board of Directors of the Bank
finding that, in the good faith opinion of such majority, the Executive was
guilty of conduct which was deemed to be Cause for
<PAGE>
termination and specifying the particulars thereof in detail, and (ii) after
reasonable notice to the Executive there shall have been an opportunity for the
Executive, together with counsel to the Executive, to be heard before such
non-officer members of the Board of Directors.
(b)......In the event employment is validly terminated for
Cause pursuant to Section 4.1(a) hereof, the Executive shall have no right to
further compensation or benefits hereunder for any period after the date of such
termination.
4.2......Termination For Poor Performance.
(a)......The Company shall have the right, at any time prior
to a Change in Control of the Company (but not thereafter), to terminate the
employment of the Executive for Poor Performance by written Notice of
Termination (as defined in Section 4.7 hereof). For the purpose of this
Agreement, "Poor Performance" shall mean a finding by a majority of the
non-officer members of each of the Boards of Directors of UNB and the Bank that,
in the good faith opinion of each such majority: (i) the Executive's performance
of his duties was sufficiently unsatisfactory to merit termination, and (ii)
prior notice of such unsatisfactory performance was given to the Executive
without cure having occurred. In making such a finding, the Board of Directors
shall utilize the input of the Chief Executive Officer ("CEO") unless the CEO is
being terminated.
(b)......In the event employment is validly terminated for
Poor Performance pursuant to Section 4.2(a) hereof, the Company shall continue
to pay to the Executive, as severance pay, his Base Salary for a period of one
year following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period, but the
<PAGE>
Executive shall have no right to any other form of compensation or benefits
hereunder for any period after the date of such termination.
4.3......Termination Without Cause.
(a)......Right to Terminate. The Company shall have the right
to terminate the employment of the Executive without Cause if the Company does
so by prior written Notice of Termination which specifies that the Company
agrees to pay the severance compensation and benefits herein set forth.
(b)......Severance Compensation and Benefits Prior to Change
in Control. If prior to a Change in Control of the Company, the Company
terminates the employment of the Executive other than for Cause, Poor
Performance, disability or death of the Executive, the Company shall continue to
pay to the Executive, as severance pay, his Base Salary during the period of two
years following such termination and shall continue to pay for and to provide
medical insurance for the Executive and his family for such period. The
Executive shall be entitled to no other compensation or benefits hereunder after
the effective date of such termination.
(c)......Severance Compensation and Benefits After Change in
Control. If after a Change in Control of the Company, the Company terminates the
employment of the Executive other than for Cause, disability or death of the
Executive, the Company shall pay to the Executive as severance pay within ten
(10) business days following the date of termination a lump sum equal to the
product of (x) 2.0, times (y) the average annual compensation, including Base
Salary and Bonus, paid to the Executive by the Company during the five years
prior to the Change-in-Control (or such fewer years as the Executive shall have
been employed by the Company). The Executive
<PAGE>
shall be entitled to no other compensation or benefits hereunder after the
effective date of such termination (except as provided by Section 5.2).
4.4......Resignation for Good Reason.
(a)......Right to Resign for Good Reason. The Executive may
terminate his employment hereunder for Good Reason following a Change in Control
of the Company but not before. For purposes of this Agreement, "Good Reason"
shall mean any one or more of the following: (i) the assignment to the Executive
without the prior written consent of the Executive of any duties inconsistent
with the position, duties, responsibilities and status of the Executive with the
Company immediately prior to the Change in Control of the Company, (ii) a change
in the reporting responsibilities, title or office of the Executive as in effect
immediately prior to a Change in Control of the Company, (iii) any removal of
the Executive from, or any failure to re-elect the Executive to, any of the
positions held by the Executive immediately prior to the Change in Control of
the Company, (iv) a reduction by the Company in the Base Salary of the Executive
as in effect immediately prior to a Change in Control or as the same may
thereafter have been increased from time to time, (v) any failure to pay the
Executive the annual bonus as provided in Section 2.2, (vi) any requirement that
the Executive be relocated to an office which is more than 25 miles from the
facility to which the Executive was assigned immediately prior to the date of
the Change in Control, (vii) any change in or the failure of the Company to
continue in effect any of the benefit plans set forth herein, unless in any case
expressly agreed to by the Executive in writing, (viii) the failure by a
successor to the Company after a Change in Control to expressly assume in
writing for the benefit of the Executive the obligations of the Company
hereunder; or (iv) any purported
<PAGE>
termination of the employment of the Executive which is not effected pursuant to
the terms of this Agreement (and for purposes of this Agreement, no such
purported termination shall be effective).
(b)......Severance Compensation and Benefits After a Change in
Control. If the Executive resigns for Good Reason after a Change in Control of
the Company, the Company shall pay to the Executive as severance pay within ten
(10) business days of the effective date of the resignation of the Executive a
lump sum equal to the product of (x) 2.0, times (y) the average annual
compensation, including Base Salary and Bonus, paid to the Executive by the
Company during the five years prior to the Change-in-Control (or such fewer
years as the Executive shall have been employed by the Company). The Executive
shall be entitled to no other compensation or benefits hereunder after the
effective date of such resignation (except as provided by Section 5.2).
4.5......Resignation Without Good Reason.
(a)......Right to Resign. The Executive may resign without
Good Reason at any time upon four weeks prior notice.
(b)......No Compensation or Benefits. If the Executive resigns
without Good Reason at any time, the Executive shall be entitled to no further
compensation or benefits hereunder after the effective date of such resignation.
4.6......Definition of Change in Control. For purposes
of this Agreement, a "Change in Control" of the Company shall mean the first
to occur of any of the following events:
<PAGE>
(a)......Any person or entity or group of affiliated persons
or entities (other than UNB) becomes a beneficial owner, directly or indirectly,
of 25% or more UNB's and/or the Bank's voting securities or all or substantially
all of the assets of UNB and/or the Bank.
(b)......UNB and/or the Bank consummates a definitive
agreement pursuant to which either UNB or the Bank is merged, consolidated or
combined with or into an unaffiliated entity in which either or both of the
following occurs: (i) the directors of UNB and/or Bank, as applicable,
immediately prior to such merger, consolidation or combination will constitute
less than a majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stockholders
of UNB immediately prior to such merger, consolidation or combination.
(c)......UNB and/or the Bank consummates a definitive
agreement pursuant to which all or substantially all of UNB's and/or the Bank's
assets are transferred other than to a wholly-owned subsidiary of UNB.
(d)......A majority of the members of the Board of Directors
of either UNB or the Bank shall be persons who: (i) were not members of such
Board on the date hereof ("current members"); and (ii) were not nominated by a
vote of the Board which included the affirmative vote of a majority of the
current members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the Board which included
the affirmative vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
<PAGE>
4.7......Notice. 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) except for a termination without Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the employment of the Executive under the provision so indicated;
(iii) specify a date of termination, which shall be not less than thirty (30)
nor more than ninety (90) days 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 4.1 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 in the manner specified in Section 5.6 hereof.
4.8......Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in Article IV by seeking other
employment or otherwise. There shall be no offset from payments or benefits due
the Executive hereunder if Executive shall obtain any other employment or
otherwise.
4.9......Parachute Payment Tax Gross-Up.
(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
<PAGE>
4.9 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 4.9, 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 as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of
such claim and shall apprise
<PAGE>
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;
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
<PAGE>
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.
ARTICLE V.
MISCELLANEOUS
5.1 Severance Compensation and Benefits 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 the Company specified in Sections 2.3 through 2.5
inclusive, except that the Executive shall not be entitled to the benefits of
any other plan or program of the Company expressly providing for severance or
termination pay.
5.2 Indemnification By Company For Executive's Expenses. If
the termination of Executive's employment occurs after a Change in Control of
the Company, the Company shall pay all expenses incurred by the Executive in
connection with any claim by the Executive against the Company hereunder,
including but not limited to attorneys' and accountants' fees in addition to
other expenses incurred by the Executive. Such expenses shall be payable monthly
upon demand by the Executive. A court of competent jurisdiction shall be
empowered to deny payment to the Executive of such expenses, including
attorneys' and accountants' fees, only if it determines that the Executive
instituted a lawsuit or proceeding hereunder in bad faith or without reasonable
cause. The Executive shall not be entitled to reimbursement for his legal fees
if his termination of employment occurs prior to a Change in Control of the
Company.
<PAGE>
5.3 Non-Disclosure of Confidential Information and Non-Compete.
(a) Non-Disclosure of Confidential Information. Except in the
course of the employment of the Executive by 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 term of this Agreement,
disclose or use, any confidential information or proprietary data of the Company
or any of its subsidiaries or affiliates. The Executive agrees that all
information concerning the identity of the customers of the Company and the
relations of the Company to its customers is confidential information, unless
such information is otherwise publicly known.
(b) Non-Competition. The Executive agrees that during the
Executive's employment by the Company pursuant to this Agreement and during the
Post-Employment Non-Compete Period (as hereinafter defined), the Executive will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, nor become
associated with, in the capacity of an employee, director, officer, principal
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area of business of the Bank (specifically, in New Jersey, New York
or Pennsylvania) which enterprise is, or may be deemed to be, competitive with
any business carried on by the Bank as of the date of the termination of the
Executive's employment or his retirement. The Post-Employment Non-Compete Period
shall mean a two-year period of time following termination of the Executive's
employment with the Company, except if the termination of employment occurs
after a Change in Control of the Company the Non-Compete
<PAGE>
Period shall be reduced to zero, and in the case of termination for Poor
Performance prior to a Change in Control of the Company, it shall be reduced to
one year.
(c) Specific Performance. The Executive agrees that the
Company does not have an adequate remedy at law for the breach of this Section
5.3 and agrees that the Executive shall be subject to injunctive relief and
equitable remedies as a result of a breach of any provision of this Section 5.3.
The invalidity or unenforceability of any provision of this Section 5.3 (or this
Agreement) shall not affect the force and effect of the remaining valid
portions. Except as expressly provided in this Agreement, no breach by the
Executive of the provisions of this Section 5.3 shall entitle the Company to
withhold any benefits payable to the Executive hereunder.
5.4 Payroll and Withholding Taxes. All payments to be made or
benefits to be provided hereunder by the Company shall be subject to reduction
by the applicable federal payroll or withholding taxes.
5.5 Changes. This Agreement may not be modified, changed,
amended, or altered except in a writing signed by the Executive and by an
officer of the Company duly authorized by the Boards of Directors or the
executive committee of both the Bank and UNB.
5.6 Notices. All notices given or required to be given herein
shall be in writing or sent by United States first-class certified or registered
mail, postage prepaid, to the Executive at the last-known address for the
Executive (or to the personal representative of the Executive upon his death),
and to the Company at the principal executive office for UNB (or any successor
thereto), to the attention of the Chairman of the Board. All such notices shall
be effective when deposited in
<PAGE>
the mail in the manner specified in this Section 5.6. Either party by a notice
in writing to the other party may change or designate the place for receipt of
such notices.
5.7 Rights Absolute. No course of conduct between the Company
and the Executive and no delay or omission by the Company or the Executive to
exercise any right or power given under this Agreement shall: (i) impair the
subsequent exercise of any right or power or (ii) be construed to be a waiver of
any default or to be an acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen; and every power and remedy granted by law and by this Agreement to
any party hereto may be exercised from time to time and as often as may be
deemed expedient. All such rights and powers shall be cumulative to the fullest
extent permitted by law.
5.8 Successors. This Agreement shall inure to the benefit of
and be binding upon (i) the Executive and, to the extent applicable, his heirs,
assigns, executors, and personal representatives and (ii) the Company, its
successors and assigns, including, without limitation, any person, partnership,
or corporation which may acquire all or substantially all of the assets and
business of the Company, or with or into which the Company may be consolidated
or merged, and this provision shall apply in the event of any subsequent merger,
consolidation, or transfer.
5.9 Non-Assignability. This Agreement is personal to each of
the parties and none of the parties may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
<PAGE>
5.10 Governing Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
ATTEST UNITED NATIONAL BANCORP
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Secretary George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED NATIONAL BANK
By: /s/ Ralph L Straw, Jr. By: /s/ George W. Blank
---------------------- -------------------------
, Cashier George W. Blank, Chairman
Compensation Committee of
the Board of Directors
ATTEST: UNITED COMMERCIAL CAPITAL GROUP, INC.
By: /s/ Ralph L Straw, Jr. By: /s/ Thomas C. Gregor
---------------------- -------------------------
, Secretary Thomas C. Gregor, Chairman and CEO
/s/ Elizabeth Edwards /s/ Richard G. Tappen
- --------------------------- --------------------------------
Witness RICHARD G. TAPPEN
