UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1999
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OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________________ to ________________
Commission file number 0-21264
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VISTA BANCORP, INC.
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(Exact name of small business issuer as specified in its charter)
New Jersey 22-2870972
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
305 Roseberry Street, P.O. Box 5360, Phillipsburg, New Jersey 08865
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(Address of principal executive offices) (Zip Code)
(908) 859-9500
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(Issuer's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since
last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such report), and (2)
has been subject to such filing requirements for the past 90 days.
Yes |X| No |_|
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of October 29, 1999, there were 4,801,484 shares of $.50 par value
Common Stock outstanding.
<PAGE>
VISTA BANCORP, INC.
Form 10-Q
For the period ended September 30, 1999
Index
Page
Part I Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets - September 30, 1999
and December 31, 1998............................................ 3
Consolidated Statements of Income - Three Months and Nine Months
Ended September 30, 1999 and 1998.................................4
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 1999 and 1998.................................5
Notes to Consolidated Financial Statements ........................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...........................................8
Part II Other Information
Item 1. Legal Proceedings....................................................20
Item 2. Changes in Securities ...............................................20
Item 3. Defaults Upon Senior Securities .....................................20
Item 4. Submission of Matters to a Vote of Security Holders..................20
Item 5. Other Information....................................................20
Item 6. Exhibits and Reports on Form 8-K.....................................20
2
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
Amounts in thousands (except per share and share data) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents:
Cash and due from banks $ 22,869 $ 23,584
Federal funds sold -- 7,000
Short-term investments 522 2,417
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Total Cash and Cash Equivalents 23,391 33,001
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Securities available for sale (Amortized cost: $212,189 and $178,040 in 1999
and 1998, respectively) 207,601 180,163
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Loans, net of unearned income:
Mortgage 131,023 137,538
Commercial 167,530 136,449
Consumer 104,866 95,539
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Total Loans 403,419 369,526
Allowance for loan losses (5,105) (4,524)
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Total Net Loans 398,314 365,002
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Premises and equipment 7,076 6,851
Accrued interest receivable 3,773 3,133
Other assets 6,095 4,896
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Total Assets $ 646,250 $ 593,046
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Liabilities and Shareholders' Equity
Deposits:
Demand:
Noninterest-bearing $ 62,593 $ 67,477
Interest-bearing 84,104 84,574
Savings 142,993 132,439
Time 262,380 238,252
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Total Deposits 552,070 522,742
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Borrowed funds 37,213 16,963
Long-term debt 8,500 3,000
Accrued interest payable 1,611 1,383
Other liabilities 2,117 2,122
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Total Liabilities 601,511 546,210
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Shareholders' Equity:
Common stock: $.50 par value; shares authorized 10,000,000; shares issued,
4,806,484 and 4,577,888 at September 30, 1999 and December 31, 1998, respectively 2,403 2,289
Paid-in capital 26,499 22,359
Retained earnings 19,159 20,622
Accumulated other comprehensive income (3,322) 1,566
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Total Shareholders' Equity 44,739 46,836
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Total Liabilities and Shareholders' Equity $ 646,250 $ 593,046
===========================================================================================================================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
3
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
Amounts in thousands (except per share and share data) 1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 8,066 $ 7,273 $ 23,212 $ 21,019
Interest on federal funds sold 116 49 305 229
Interest on short-term investments 25 53 105 175
Interest on securities:
Taxable 2,618 2,428 7,242 7,476
Nontaxable 463 400 1,334 1,080
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Total Interest Income 11,288 10,203 32,198 29,979
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Interest Expense:
Interest on deposits 4,799 4,716 13,887 13,953
Interest on borrowed funds 255 164 642 433
Interest on long-term debt 144 47 305 143
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Total Interest Expense 5,198 4,927 14,834 14,529
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Net Interest Income 6,090 5,276 17,364 15,450
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Provision for Loan Losses 286 195 763 585
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Net Interest Income After Provision for Loan Losses 5,804 5,081 16,601 14,865
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Noninterest Income:
Service charges on deposit accounts 479 444 1,406 1,254
Other service charges 296 215 1,023 590
Net gains (losses) on sales of securities (78) 31 10 238
Net gains on sales of loans 82 -- 326 15
Trust income 76 63 236 178
Other income 72 64 168 174
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Total Noninterest Income 927 817 3,169 2,449
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Noninterest Expense:
Salaries and benefits 2,157 2,088 6,652 6,162
Occupancy expense 439 354 1,308 1,029
Furniture and equipment expense 560 404 1,638 1,327
Other expense 1,098 965 3,439 3,075
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Total Noninterest Expense 4,254 3,811 13,037 11,593
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Income Before Provision for Income Taxes 2,477 2,087 6,733 5,721
Provision for Income Taxes 748 625 2,049 1,753
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Net Income $ 1,729 $ 1,462 $ 4,684 $ 3,968
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Earnings per Share (Basic and Diluted) $ 0.36 $ 0.30 $ 0.97 $ 0.82
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Weighted Average Number of Common Shares Outstanding 4,808,072 4,841,459 4,808,543 4,828,683
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</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
4
<PAGE>
Vista Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
Amounts in thousands 1999 1998
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<S> <C> <C>
Cash Flows From Operating Activites:
Net Income $ 4,684 $ 3,968
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 719 789
Provision for loan losses 763 585
Increase in accrued interest receivable (640) (475)
Increase in accrued interest payable 228 101
Net change in other assets and other liabilities 676 193
Net amortization of premium on securities 358 464
Net gains on sales of securities (10) (238)
Net gains on sales of loans (326) (15)
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Net Cash Provided By Operating Activities 6,452 5,372
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Cash Flows From Investing Activities:
Proceeds from maturities of securities available for sale 31,155 43,320
Proceeds from sales of securities available for sale 24,376 39,180
Purchases of securities available for sale (90,029) (81,912)
Net increase in loans (40,155) (40,078)
Proceeds from sale of loans 6,304 999
Net capital expenditures (880) (433)
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Net Cash Used In Investing Activities (69,229) (38,924)
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Cash Flows From Financing Activities:
Net increase in demand and savings deposits 5,200 13,303
Net increase in time deposits 24,128 6,067
Net increase in borrowed funds 20,250 12,043
Net increase (decrease) in long-term debt 5,500 (1,222)
Net proceeds from issuance of common stock 831 1,218
Purchases of treasury stock (840) (1,018)
Cash dividends paid (1,894) (1,510)
Cash in lieu of fractional shares (8) (7)
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Net Cash Provided By Financing Activities 53,167 28,874
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Net Decrease in Cash and Cash Equivalents (9,610) (4,678)
Cash and Cash Equivalents, Beginning of Period 33,001 27,850
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Cash and Cash Equivalents, End of Period $ 23,391 $ 23,172
========================================================================================================
Supplemental Disclosures of Cash Flow Information:
Interest paid $ 14,606 $ 14,428
Income taxes paid 2,397 1,855
Supplemental Disclosures of Investing and Financing Activities:
Transfers from loans to other real estate owned 0 537
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
5
<PAGE>
Notes to Consolidated Financial Statements
Note 1. Basis of Presentation
The accompanying consolidated financial statements of Vista Bancorp, Inc.
and its subsidiaries (Vista) reflect all adjustments and disclosures, which are,
in the opinion of management, necessary for a fair presentation of interim
results. The financial information has been prepared in accordance with Vista's
customary accounting practices and has not been audited.
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission (SEC) rules and regulations. The preparation
of financial statements in conformity with general accepted accounting
principles requires management to make certain estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. These interim financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in Vista's Annual Report for the year
ended December 31, 1998.
Results of operations for the three and nine-month periods ended September
30, 1999, are not necessarily indicative of the results to be expected for the
full year.
Note 2. Recently Issued Accounting Standards
Statement of Financial Accounting Standards (SFAS) No. 134, "Accounting
for Mortgage-Backed Securities Retained after the Securitization of Mortgage
Loans Held for Sale" became effective for the first quarter beginning after
December 15, 1998. SFAS No. 134 requires that all mortgage-backed securities
retained after a securitization of mortgage loans held for sale be classified as
to the intent to sell or hold those investments. Any retained mortgage-backed
securities that are committed to sell before or during the securitization
process must be classified as trading securities. This statement is not expected
to have a material impact on Vista.
Statement of Financial Accounting Standards (SFAS) No. 137, "Accounting
for Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133 - an amendment of FASB Statement No. 133" was
issued in June 1999. SFAS No. 137 delays the implementation of SFAS No. 133
until fiscal years beginning after June 15, 2000. This delay was due to the
complexity of implementing this standard along with Year 2000 considerations.
Vista is currently in the process of evaluating the provisions of SFAS No. 133.
Note 3. Earnings per Share
Earnings per share amounts, weighted average shares outstanding and all
per share amounts have been adjusted to reflect the stock dividends declared as
of April 1999 and May 1998.
6
<PAGE>
On April 16, 1999, Vista declared a 5 percent stock dividend to
shareholders' of record May 3, 1999 and payable May 21, 1999. Following payment
of this dividend, Vista had approximately 4.8 million shares outstanding.
Earnings per share, weighted average shares outstanding and all per share
amounts have been restated in the accompanying financial statements, to reflect
this dividend. Accordingly, an amount equal to the fair market value of the
additional shares issued was charged to retained earnings and credited to common
stock and additional paid in capital based on the quoted market price on April
16, 1999.
On May 15, 1998, Vista declared a 10 percent stock dividend to
shareholders' of record as of June 1, 1998 and payable June 10, 1998.
Accordingly, an amount equal to the fair market value of the additional shares
issued was charged to retained earnings and credited to common stock and
additional paid in capital based on the quoted market price of the stock on May
15, 1998.
Note 4. Other Comprehensive Income
Vista held securities classified as available for sale, which experienced
net unrealized pre-tax depreciation in value of $6.711 million during the
nine-month period, ended September 30, 1999. In compliance with SFAS No. 130,
the before-tax and after-tax amount for this category as well as the tax
benefit, is summarized below.
<TABLE>
<CAPTION>
Before-Tax Tax Net-of-Tax
(Amounts in thousands) Amount (Benefit) Amount
<S> <C> <C> <C>
Unrealized losses on securities:
Unrealized holding losses arising during period $ (6,701) $ (1,820) $(4,881)
Less: reclassification adjustment for gains
realized in net income 10 3 7
--------------------------------------
Net unrealized loss (6,711) (1,823) (4,888)
--------------------------------------
Other comprehensive income $ (6,711) $ (1,823) $(4,888)
======================================
</TABLE>
7
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Certain statements in this Form 10-Q are forward-looking statements that
involve a number of risks and uncertainties. A discussion of these factors,
among others, which may cause actual results to differ materially from projected
results appears under "Forward Looking Statements" in Vista's Annual Report and
Form 10-K for the year-ended December 31, 1998.
Recent Development
In March 1999, Vista expanded its presence in Pennsylvania, through its
affiliate Twin Rivers Community Bank, with the addition of two branches in
Bethlehem, Pennsylvania. The Westgate office located at 2400 Schoenersville Road
and the Route 191 office located at 3815 Linden Street increased the number of
branch offices in Pennsylvania to six.
These branches were acquired without deposits and consequently are not
expected to reach break-even profitability for a period of twelve to eighteen
months which is consistent with Vista's historical experience with similar
branch expansion efforts.
On a consolidated basis, Vista Bancorp now operates fifteen full service
branch locations in Pennsylvania and New Jersey.
Results of Operations for the periods ended September 30, 1999 and September 30,
1998
Earnings Summary
For the third quarter ended September 30, 1999, Vista Bancorp, Inc.
reported an 18 percent increase in net income to $1.73 million or $.36 per
diluted common share compared to $1.46 million or $.30 per diluted share for the
comparable period in 1998. Continued improvement in net interest income and
solid growth in noninterest income sources outpaced higher operating expenses
and an increase in the provision for loan losses. The return on average assets
improved to 1.07 percent and return on average equity increased to 14.35 percent
during the third quarter of 1999.
For the nine months ended September 30, 1999, net income of $4.68 million,
or $.97 per diluted common share, is up 18 percent over the comparable
nine-month period of 1998. Net interest income continues to be the primary
driver behind the earnings improvement. Vista's ability to consistently grow and
expand its franchise geographically has enabled it to increase the size of the
balance sheet and change the mix of its earning assets and funding sources to
expand its margins and drive revenue growth. Higher revenues, in the form of net
interest income, gains generated from new business initiatives such as SBA
lending, debit cards and asset management activities are closely correlated to
the in growth operating expense levels.
For the first nine months of 1999, return on average assets increased to
1.01 percent from .94 percent in 1998 and return on average equity improved to
13.36 percent in 1999 compared to 11.94 percent in 1998.
8
<PAGE>
Net Interest Income
Net interest income on a tax-equivalent basis increased 15 percent to $6.3
million for the quarter ended September 30, 1999 compared to $5.5 million for
the comparable period in 1998. For the nine months ended September 30, 1999, net
interest income, on a tax-equivalent basis, increased 13 percent to $18.0
million over the $16.0 million in the comparable period in 1998. An increase in
average interest-earning assets and a wider net interest margin combined to
drive the strong performance in the quarter and year-to-date periods.
Interest-earning assets expanded significantly during 1999. Through the
nine months ended September 30, 1999 average interest-earning assets increased
10 percent, or $53.6 million to $586.5 million, while the net interest margin
expanded to 4.11 percent compared to 4.00 percent for the same nine-month period
in 1998. On a linked-quarter basis, the net interest margin for the third
quarter of 1999 compared favorably to the 4.07 percent average margin reported
for the second quarter of 1999.
It is Vista's strategic decision to shift its loan portfolio over time to
a balanced distribution of commercial, consumer and mortgage lending combined
with lower funding costs to expand the net interest margin.
The tax-equivalent yield on interest-earning assets fell 16 basis points
to 7.49 percent in the first nine months of 1999 compared to 7.65 percent for
the same period one-year ago. The decrease is attributed to lower yields earned
on investment securities, lower lending rates and heightened competitive pricing
pressure in commercial lending. However, a more profitable mix of
interest-earning assets more than offset the adverse impact of lower average
yields to increase total interest income.
The cost of funding the asset growth, as measured by the ratio of interest
expense to average earning assets, declined to 3.38 percent for the quarter and
nine months ended September 30, 1999. Growth in average balances of checking,
savings and money market accounts and lower rates paid for time deposits reduced
the cost of funds. For the nine months ended September 30, 1999,
interest-bearing liabilities increased $44.1 million.
The table, "Consolidated Average Balances, Net Interest Income and Average
Rates," presents Vista's average assets, liabilities and shareholders' equity.
Vista's net interest income, net interest spreads, and net interest income as a
percentage of interest-earning assets for the periods ended September 30, 1999
and 1998, are also reflected.
The table, "Volume/Rate Analysis of Changes in Net Interest Income,"
analyzes net interest income by segregating the volume and rate components of
the changes in net interest income resulting from changes in the volume of
various interest-earning assets and interest-bearing liabilities and the changes
in the rates earned and paid by Vista.
9
<PAGE>
VISTA BANCORP, INC. AND SUBSIDIARIES
Consolidated Average Balances, Net Interest Income and Average Rates
(Tax-equivalent Basis)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 1998
----------------------------------------------------------------------
Average Average Average Average
Balances Interest Rates Balances Interest Rates
Amounts in thousands (except percentages) (1) (2) (1) (2)
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<S> <C> <C> <C> <C> <C> <C>
Assets
Federal funds sold and securities purchased
under agreements to resell $ 8,415 $ 305 4.85% $ 5,499 $ 229 5.57%
Short-term investments 2,807 105 5.00% 4,436 175 5.27%
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Total Short-term Investments 11,222 410 4.88% 9,935 404 5.44%
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Securities:
U.S. Treasury 9,971 438 5.87% 17,747 808 6.09%
U.S. Government agencies
and corporations 122,932 5,796 6.30% 123,128 5,903 6.41%
States and other political subdivisions (3) 37,920 1,931 6.81% 31,142 1,550 6.65%
Other 20,640 1,008 6.53% 14,931 766 6.86%
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Total Securities 191,463 9,173 6.41% 186,948 9,027 6.46%
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Loans, net of unearned income: (4)
Mortgage 133,653 7,514 7.52% 135,581 7,699 7.59%
Commercial 151,679 9,844 8.68% 112,472 7,944 9.44%
Consumer 98,489 5,921 8.04% 87,986 5,412 8.22%
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Total Loans 383,821 23,279 8.11% 336,039 21,055 8.38%
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Total Interest-earning Assets 586,506 32,862 7.49% 532,922 30,486 7.65%
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Cash and due from banks 20,033 17,420
Allowance for loan losses (4,816) (4,292)
Other assets 15,767 15,518
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Total Noninterest-earning Assets 30,984 28,646
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Total Assets $ 617,490 $ 561,568
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Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand $ 83,948 $ 1,148 1.83% $ 77,520 $ 1,256 2.17%
Savings 139,257 3,115 2.99% 127,638 2,915 3.05%
Time 203,957 7,861 5.15% 196,253 8,007 5.45%
Time deposits $100,000 and over 48,095 1,763 4.90% 42,293 1,775 5.61%
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Total Interest-bearing Deposits 475,257 13,887 3.91% 443,704 13,953 4.20%
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Borrowed funds 21,614 642 3.97% 13,131 433 4.41%
Long-term debt 7,110 305 5.74% 3,058 143 6.25%
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Total Borrowed Funds and Long-term Debt 28,724 947 4.41% 16,189 576 4.76%
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Total Interest-bearing Liabilities 503,981 14,834 3.94% 459,893 14,529 4.22%
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Noninterest-bearing demand deposits 62,393 53,388
Other liabilities 4,280 3,872
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Total Noninterest-bearing Liabilities 66,673 57,260
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Shareholders' Equity 46,836 44,415
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Total Liabilities and Shareholders' Equity $ 617,490 $ 561,568
- ----------------------------------------------------------------------------------------------------------------------------------
Interest Income/Earning Assets 32,862 7.49% 30,486 7.65%
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Interest Expense/Earning Assets 14,834 3.38% 14,529 3.65%
- ----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income and Margin (5) $ 18,028 4.11% $ 15,957 4.00%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Interest on loans includes fee income.
(2) Rates have been annualized and computed on a tax-equivalent basis using
the federal income tax statutory rate of 34%.
(3) Tax-equivalent adjustments were $664 thousand for 1999 and $507 thousand
for 1998.
(4) Includes nonaccrual loans.
(5) Net interest income as a percent of interest-earning assets on a
tax-equivalent basis.
10
<PAGE>
VISTA BANCORP, INC. AND SUBSIDIARIES
Volume/Rate Analysis of Changes in Net Interest Income (Tax-equivalent Basis)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 vs. 1998
------------------------------
Increase (Decrease)
Due to Changes in:
------------------------------
Total Average Average
Amounts in thousands Change(1) Volume Rate
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest Income:
Federal funds sold $ 76 $ 108 $ (32)
Short-term investments (70) (61) (9)
- ------------------------------------------------------------------------------------------
Total Short-term Investments 6 47 (41)
- ------------------------------------------------------------------------------------------
Securities:
U.S. Treasury (370) (343) (27)
U.S. Government agencies and corporations (107) (9) (98)
States and other political subdivisions 381 344 37
Other 242 281 (39)
- ------------------------------------------------------------------------------------------
Total Securities 146 273 (127)
- ------------------------------------------------------------------------------------------
Loans, net of unearned income:(2)
Mortgage (185) (108) (77)
Commercial 1,900 2,587 (687)
Consumer 509 633 (124)
- ------------------------------------------------------------------------------------------
Total Loans 2,224 3,112 (888)
- ------------------------------------------------------------------------------------------
Total Interest Income 2,376 3,432 (1,056)
- ------------------------------------------------------------------------------------------
Interest Expense:
Demand (108) 98 (206)
Savings 200 261 (61)
Time (146) 307 (453)
Time deposits $100,000 and over (12) 228 (240)
- ------------------------------------------------------------------------------------------
Total Interest-bearing Deposits (66) 894 (960)
- ------------------------------------------------------------------------------------------
Borrowed funds 209 256 (47)
Long-term debt 162 174 (12)
- ------------------------------------------------------------------------------------------
Total Borrowed Funds and Long-term Debt 371 430 (59)
- ------------------------------------------------------------------------------------------
Total Interest Expense 305 1,324 (1,019)
- ------------------------------------------------------------------------------------------
Net Interest Income (tax-equivalent basis) $ 2,071 $ 2,108 $ (37)
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The volume/rate variance is allocated based on the percentage relationship
of changes in volume and changes in rate to the "Total Change."
(2) Includes nonaccrual loans.
11
<PAGE>
Noninterest Income
Noninterest income is a key growth and investment area and one whose
relative contribution Vista intends to expand over time. New business
initiatives introduced over the last two years include, the establishment of a
Small Business Administration (SBA) lending department to serve the needs of
certain commercial borrowers, implementation of an ATM surcharging fee, rollout
of an ATM/Debit card to generate interchange fee income as well as a
strengthened commitment to the trust and asset management business.
For the quarter ended September 30, 1999, total noninterest income
increased 13 percent to $927 thousand from $817 thousand in the same quarter of
1998. On a year-to-date basis total noninterest income reached $3.2 million, up
29 percent compared to $2.4 million for the comparable period of 1998.
The majority of the growth in these periods is attributed to surcharge
fees assessed to non-customers that access our ATM machines and fees collected
in connection with providing routine banking services to a growing deposit base
of customers. In addition, fees received from the sale of mutual funds and
annuity products and gains recognized on the sale of several loan packages
contributed to the increase.
Trust and asset management fees continued to grow based on increased
assets under management. Clients confidence in our abilities helped increase
revenues 21 percent for the quarter and 33 percent for the first nine months of
1999. Vista also announced the expansion and relocation of its newly named Trust
and Asset management business to a new facility located in Phillipsburg, New
Jersey with access to all markets served by Vista in New Jersey and
Pennsylvania.
Security transactions generated $78 thousand in recognized losses during
the quarter ended September 30, 1999 compared to net gains of $31 thousand in
the comparable quarter of 1998. Losses were recognized on the sale of fixed-rate
CMO mortgaged-backed securities, which in management's opinion possessed limited
future returns in view of alternative investments. On a year-to-date basis, net
gains realized from security transactions fell to $10 thousand from $238
thousand recognized in 1998.
Net gains of $82 thousand were recognized in the third quarter of 1999 on
the sale of the guaranteed portion of SBA loans. The increase is attributed to
the new SBA lending department and robust loan origination activity under this
program in 1999. Between 75 and 80 percent of each loan is guaranteed by the SBA
and may be sold into the secondary market with the balance retained in the
commercial loan portfolio. This form of lending is a valued source of
profitability as it offers four distinct revenue streams. The cash gain on the
sale recognized, reinvestment of the gains recorded, servicing fee revenues
received for performing servicing functions on the portion sold and interest
income on the portion of the loan retained in portfolio.
Vista's lead bank subsidiary, Phillipsburg National Bank (PNB); attained
SBA preferred lender status during the third quarter of 1999. Being a preferred
lender enables PNB to approve small business loan applications directly, usually
within several business days. This accreditation will enable Vista to meet the
needs of growth-oriented small business firms that do not qualify through
conventional financing channels.
12
<PAGE>
The ability to recognize gains from this activity is dependent on market
and economic conditions. There is no assurance that gains reported in prior
periods will continue in future periods or that there will not be significant
inter-period variations in such results.
Noninterest Expense
For the quarter ended September 30, 1999 total noninterest expense
increased 12 percent to $4.25 million from $3.81 million in the comparable third
quarter of 1998. For the first nine months of 1999, total noninterest expense
rose 12 percent to $13.03 million compared to $11.59 million in 1998.
As Vista continues to grow its franchise and expand its geographical
presence, it must make investments in staff, incentives, facilities and
technology to remain competitive. Therefore, these initiatives account for the
vast majority of the increase in operating expense levels for the quarter and
year-to-date periods.
Vista has demonstrated the ability to make prudent and strategic
investments in order to drive revenues and boost its profitability and key
profitability measures. Vista believes in increasing its revenue base as the
primary means to increasing its efficiency rather than absolute cost control
measures or cost reductions.
One key measure of monitoring progress toward improved efficiency is the
measure of total noninterest expense to average total assets. Vista seeks to
spread the costs of expansion and growth over a growing customer base that in
turn should correlate near 2.75 percent of average total assets.
For the third quarter ended September 30, 1999, total noninterest expense
averaged 2.63 percent of total average assets which compares favorably to the
2.65 percent for the comparable quarter of 1998. For the nine months ended
September 30, 1999 the measure averaged 2.82 percent compared to 2.76 percent in
1998.
A second banking-industry standard for measuring the efficiency of revenue
generation is referred to as the "efficiency ratio". This standard attempts to
quantify the cost of generating one dollar of revenue. The lower the percentage
the more efficient an organization is considered. Vista's efficiency ratio fell
to 58 percent for the third quarter of 1999 compared to 61 percent for the same
quarter of 1998. On a year-to-date basis, the efficiency ratio measured 62
percent for 1999 compared to 64 percent in 1998.
The effective tax rate was 30.2 percent for the quarter ending September
30, 1999 compared, to 30.0 percent for the comparable period in 1998. The
effective tax rate decreased to 30.4 percent for the nine months ended September
30, 1999 compared to 30.7 percent in 1998 due to increased investment in
tax-exempt municipal securities.
13
<PAGE>
Readiness for Year 2000
As the Year 2000 approaches, Vista Bancorp has undertaken initiatives to
address the Year 2000 problem, as more fully described in the 1998 Annual
Report. As of September 30,1999 Vista has completed testing of all mission
critical systems and continues to perform due diligence with its key vendors and
material customers. Further, Vista has developed a comprehensive business
resumption contingency plan to be implemented in the event of unforeseen minor
failures and has been engaged in an on going customer awareness program.
Vista continues to evaluate the estimated costs associated with attaining
Year 2000 readiness. Incremental costs for 1999, such as testing, software
purchases and marketing publications are not expected to be material. While
additional costs could be incurred, Vista believes, based on available
information, that it will be able to manage its Year 2000 transition without any
adverse effect on its business operations or financial condition.
The preceding Y2K discussion contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements include, but are not limited to (i) whether or not testing will be
accurate; (ii) the estimated costs associated with becoming Y2K compliant; (iii)
the date by which the Company expects to be fully compliant, and (iv) the
successfulness of any contingency plans. These statements are made using current
estimates and assumptions about future events. There can be no assurance that
these estimates will be achieved and actual results could differ materially from
those anticipated. The factors that might lead to material differences include,
among others, (i) the ability to accurately identify all mission-critical
systems; (ii) accuracy of the testing performed; (iii) whether or not third
party certifications are accurate; (iv) whether or not material customers,
suppliers, governmental agencies and other significant third parties are
successful in their Y2K efforts; (v) the adequacy of contingency plans, and (vi)
the ability to implement contingency plans.
Financial Condition - September 30, 1999 versus December 31, 1998
Total consolidated assets increased $53.3 million to $646.3 million at
September 30, 1999 compared to $593.0 million at December 31, 1998. Commercial
and consumer loan growth plus securities purchased through leverage transactions
drove the increase. Funding was provided by an incremental increase in time
deposits, savings and money market accounts, borrowed funds and long-term debt.
Total loans increased $33.9 million to $403.4 million at September 30,
1999 compared to $369.5 million at December 31, 1998.
Vista continues to focus its efforts on expanding its presence as a
commercial lending organization. This strategy continues to drive the shift in
the loan portfolio to increase revenues and maintain growing earnings and
profitability.
At September 30, 1999, the commercial loan portfolio stood at $167.5
million, reflecting an increase of $31.1 million since December 31, 1998.
Commercial loans now comprise 42 percent of total loans compared to 37 percent
at year-end 1998.
14
<PAGE>
Mortgage loans comprise the second largest concentration of consolidated
loans at September 30, 1999, representing 32 percent of total loans, down from
37 percent since year-end 1998. This planned reduction, accomplished through
amortization, runoff and referral of virtually all fixed-rate loan production to
a third-party mortgage banker, enables Vista to better manage its interest rate
risk and liquidity positions. At September 30, 1999, mortgage loans totaled
$131.1 million, down $6.4 million from $137.5 million at December 31, 1998.
Consumer loans reflected growth in outstanding balances at September 30,
1999, reaching $104.9 million, up $9.3 million compared to $95.5 million at
December 31, 1998. The majority of the growth in the consumer portfolio was
attributed to an increase in home equity loans. Consumer loans remained flat at
26 percent of consolidated loans.
Total securities available-for-sale increased $27.4 million to $207.6
million at September 30, 1999, compared to $180.2 million at year-end 1998. The
increase in the securities portfolio was due to the net result of $90.0 million
in purchases, a combined $55.6 million of maturities, prepayments and sales and
$6.7 million of pretax depreciation in the market value of the portfolio taken
as a whole. Higher market interest rates and widening credit spreads experienced
during 1999 combined to depress the value of most fixed-rate securities.
During 1999, a lower level of US Treasury securities were offset by an
increase in tax-exempt municipal bonds and other investments, principally
corporate bonds and debt instruments. Mortgage-backed related securities
remained unchanged compared to 1998.
15
<PAGE>
The increase in assets was funded through $55.1 million in deposits,
borrowed funds and long-term debt. Total deposits increased $29.4 million to
$552.1 million at September 30, 1999, and consisted of $24.1 million in time
deposits, $10.6 million in savings and money market deposits; offset in part by
a $5.4 million decrease in demand deposits. Deposit concentrations remained
virtually unchanged from year-end 1998 with 47 percent time deposits, 27 percent
demand deposits and 26 percent savings and money market deposits.
Borrowed funds and long-term debt more than doubled to $45.7 million at
September 30, 1999 over the $20.0 million at December 31, 1998. Leverage
transactions totaling $20 million accounted for the increase. Other borrowings
included temporary increases in overnight federal funds purchased and overnight
repurchase agreements.
From time to time, Vista's bank subsidiaries may enter into borrowing
arrangements, primarily with the Federal Home Loan Bank, to fund the purchase of
investment securities. The strategy is designed to synthetically create a spread
between the yield on the purchased securities and the cost of funds on the
underlying debt. Management views the added earnings stream from this strategy
as a means to maintain the level of return on equity on incremental core capital
being retained, until such time as conventional banking practices can accomplish
the same objective. As of September 30, 1999, Vista maintained a total leverage
program of $23 million.
It is the policy of Vista and its bank subsidiaries to adhere, at all
times, to the specific regulatory guidelines for qualifying as well capitalized
institutions. Operating policies are in place to govern capital targets,
borrowing limits, profitability standards and interest rate risk tolerance
guidelines. In addition, the Board has authorized executive-management personnel
to enter into leverage programs on behalf of the banks, instituted predetermined
exit strategies and established periodic measuring and reporting to the Board.
Non-performing Assets
At September 30, 1999, non-performing assets, consisting of loans on
nonaccrual status plus other real estate acquired through foreclosure (ORE),
totaled $2.8 million, a decrease of $200 thousand or 7 percent from $3.0 million
at December 31, 1998. This decrease is attributed to the sale of several ORE
properties combined with asset write-downs of approximately $120 thousand
recorded in the nine months of 1999. The ratio of non-performing assets to total
loans and ORE declined to 0.69 percent at September 30, 1999 from 0.82 percent
at the end of 1998.
Commercial nonaccrual loans decreased to 51 percent of total nonaccrual
loans at September 30, 1999 from 55 percent at December 31, 1998, while
nonaccrual residential mortgage loans increased to 38 percent from 31 percent.
Consumer nonaccrual loans decreased to 11 percent of total nonaccrual loans at
September 30, 1999 from 14 percent at December 31, 1998.
16
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands September 30, 1999 December 31, 1998 September 30, 1998
- -------------------- ------------------ ----------------- ------------------
<S> <C> <C> <C>
Non-performing loans $2,269 $1,930 $2,522
Other real estate owned 506 1,112 1,403
------ ------ ------
Total non-performing assets 2,775 3,042 3,925
Loans past due 90 days and
on accrual status $ 59 $ 160 $ 309
</TABLE>
Impaired loans are those loans in which management doubts that the
collection of principal and interest, will be in accordance with the original
contract terms. Vista considers impaired loans to include all non-performing
loans in addition to those loans, which are determined to be impaired, based on
individual review of impaired loans above $75 thousand. At September 30, 1999,
total impaired loans equaled $3.0 million, of which $2.3 million are
non-performing loans.
Allowance for Loan Losses
At September 30, 1999, the allowance for loan losses increased to $5.1
million or 1.27 percent of total loans from $4.5 million or 1.22 percent of
total loans at December 31, 1998. The allowance for loan losses as a percentage
of non-performing assets equaled 184 percent at September 30, 1999 and 149
percent at December 31, 1998.
The provision for loan losses was $286 thousand for the quarter ended
September 30, 1999, an increase of $91 thousand or 46 percent from $195 thousand
recorded for the same quarter in 1998. For the nine months ended September 30,
1999, the provision for loan losses equaled $763 thousand, an increase of $178
thousand or 30 percent compared to $585 thousand for the comparable period in
1998.
While the quality of the loan portfolio remains satisfactory, the
additional provision reflects the strong loan growth experienced in 1999. Net
charge-offs represent .05% of average loans in the first nine months of 1999
compared to .07% of average loans in the first nine months of 1998.
The allowance for loan losses is maintained at a level deemed adequate by
management to provide for potential loan losses. The reserve is comprised of
specific allocations for individual loans while the general allocation is
determined by loss factors associated with each loan type (i.e. commercial,
consumer or mortgage) and allocated accordingly. Commercial loans of $150,000 or
more are reviewed individually. The allocated or required portion of the
allowance for loan losses is calculated quarterly and compared to the total
reserve balance to determine adequacy. The commercial loan reserve requirement
is based on individual loans reviewed, historical loss levels, industry
concentration analyses, delinquency trends, economic cycles, and other pertinent
factors. The consumer and mortgage loan reserve requirements are based on the
historical trend of the last four quarters loss factors. The allowance for loan
losses is reviewed quarterly by management and the Board of Directors for
adequacy.
17
<PAGE>
For The Nine Months
Ended September 30,
Amounts in thousands 1999 1998
- -------------------- -------- --------
Average loans outstanding $383,821 $336,039
Total loans at end of period 403,419 355,630
Allowance for loan losses:
Balance at beginning of period 4,524 4,148
Charge-offs:
Commercial 98 147
Real estate - mortgage 1 --
Installment 144 199
-------- --------
Total charge-offs 243 346
Recoveries:
Commercial 14 61
Real estate - mortgage 13 --
Installment 34 34
-------- --------
Total charge-offs 61 95
-------- --------
Net charge-offs: 182 251
Provision for loan losses 763 585
-------- --------
Balance at end of period $ 5,105 $ 4,482
Net charge-offs as a percent of average 0.05% 0.07%
loans outstanding during period
Allowance for loan losses as a percent 1.27% 1.26%
of total loans
Liquidity
At September 30, 1999, cash and cash equivalents equaled $23.4 million
representing a decrease of $9.6 million from $33.0 million in cash and cash
equivalents at December 31, 1998.
Changes in cash are measured by the three major classifications of cash
flow defined as operating, investing and financing activities. The $9.6 million
decrease in cash and cash equivalents was attributed to combined net cash flows
provided by operating and financing activities totaling $59.6 million, offset by
investing activities of $69.2 million.
At September 30, 1999, net cash provided by operating activities equaled
$6.4 million, and consisted of net income adjusted for noncash charges and a net
increase in other assets and other liabilities.
Net cash used in investing activities totaled $69.2 million and consisted
of $90.0 million of security purchases, a $40.2 million net increase in loans,
funded in part, by $61.8 million of
18
<PAGE>
proceeds received through maturities and sales of investment securities and
loans.
Net cash provided by financing activities totaled $53.2 million as net
deposit growth of $29.3 million combined with an increase of $20.2 million in
borrowed funds and $5.5 million in long-term debt to offset cash dividends paid
and share repurchases.
Capital Resources
At September 30, 1999, total shareholders' equity equaled $44.7 million, a
decrease of $2.1 million from $46.8 million in shareholders' equity at December
31, 1998. Increases to shareholders' equity included $4.7 million in net income
and $849 thousand in capital raised primarily through the dividend reinvestment
plan. A $4.9 million pretax reduction in the market value adjustment recorded
for the available for sale portfolio, cash dividends paid of $1.9 million and
$840 thousand in share repurchases reduced shareholder equity. Vista's dividend
payout ratio equaled 40.4 percent for the nine months ended September 30, 1999
compared to 38.2 percent in 1998.
At September 30, 1999, Vista reported a $3.3 million unrealized
tax-affected loss recorded for the available for sale portfolio compared to a
$1.6 million unrealized tax-affected gain at December 31, 1998.
During the first quarter of 1999, the Board of Directors authorized the
extension of an existing stock repurchase program by additional 100,000 shares
or approximately 2 percent of total shares outstanding. Such purchases will be
conducted pursuant to section 10b-18 from time to time in open market
transactions in the discretion of management over a twelve to eighteen month
time frame. All shares repurchased are expected to be retired. As of October 29,
1999, thirty-five thousand shares had been repurchased under the augmented
program. In the aggregate, a total of 134 thousand shares have been repurchased
at a total cost of $2.6 million.
Vista maintained a Tier I risk-based capital ratio of 11.94 percent and a
total risk-based capital ratio of 13.19 percent at September 30, 1999, compared
to 12.76 percent and 14.01 percent, respectively, at December 31, 1998. Vista
maintained a leverage capital ratio of 7.48 percent at September 30, 1999 and
7.73 percent at December 31, 1998.
19
<PAGE>
Part II Other Information
Item 1. Legal Proceedings Not Applicable
Item 2. Changes in Securities Not Applicable
Item 3. Defaults Upon Senior Securities Not Applicable
Item 4. Submission of Matters to a Vote of Not Applicable
Security Holders
Item 5. Other Information Not Applicable
Item 6. Exhibits and Reports on form 8-K
(a) Exhibits required by Item 601 of Regulation S-K:
Exhibit Number Description of Exhibit
-------------- ----------------------
2 Not Applicable
4 Not Applicable
10 Severance Agreements
11 Not Applicable
15 Not Applicable
18 Not Applicable
19 Not Applicable
22 Not Applicable
23 Not Applicable
24 Not Applicable
27 Financial Data Schedules
99 Not Applicable
(b) Reports on Form 8-K
None.
20
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Vista Bancorp, Inc.
- ------------------------------
(Registrant)
Dated: November 12, 1999
-----------------------
By /s/ William F. Keefe
-------------------------------------
William F. Keefe
Executive Vice President
and Chief Financial Officer
(Mr. Keefe is the Principal
Accounting Officer and has
been duly authorized to sign
on behalf of the registrant.)
21
<PAGE>
Vista Bancorp Inc., and Subsidiaries
Item Number Description Page
- ----------- ----------- ----
10 Severance Agreements.............................23
22
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") made as of the 21st day of
July, 1999 (the "Commencement Date") between Vista Bancorp, Inc., a corporation
duly organized under the laws of the State of New Jersey, with offices at 305
Roseberry Street, Phillipsburg, New Jersey 08865 ("Vista" or the Company"), and
Barbara Harding of 305 Roseberry Street, Phillipsburg, New Jersey 08865 (the
"Employee").
WHEREAS, the Employee has been a loyal and long-term employee of Vista or
a related entity for many years; and
WHEREAS, Vista wishes to provide the Employee with the comfort of knowing
that if the Employee loses his or her position with Vista, or any related
entities, as a result of any involuntary termination or upon a "change in
control", the Employee will be entitled to receive a severance benefit; and
WHEREAS, the Employee acknowledges that the Company does not maintain any
severance programs as defined under the Employee Retirement Income Security Act
of 1974 ("ERISA"), and that, prior to the Commencement Date, the Employee is not
entitled to any severance benefits upon a termination of employment.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following words and
phrases shall be defined as follows:
a. "Base Salary" shall mean the base salary which is payable on a
regular basis to the Employee, excluding bonuses and taxable fringe
benefits.
b. "Cause" shall include, but not be limited to, any false statement
that was intentionally or negligently made, contained in any
corporate records; the commission by the Employee of any crime or
fraud against the Company or its property, or any crime involving
moral turpitude or reasonably likely to bring discredit upon the
Company; and any violation of the Company's operating policies.
c. "Change in Control" shall mean: (i) the acquisition of ownership of
stock of the Company, by any person (including, without limitation,
a corporation, trust, partnership, joint venture, limited liability
company (a "Person") or by any group of Persons), whether directly,
indirectly, beneficially or of record, which acquisition, together
with stock held by such person or group, represents more than 50% of
the total voting power of all outstanding stock of the Company
(provided that no Change in Control shall occur under this
subparagraph (i) if the
23
<PAGE>
Person acquiring any additional stock already possessed more than
50% of the total fair market voting power of the stock of the
Company); (ii) any merger or consolidation of the Company which the
stockholders of the Company before such merger or consolidation do
not, as a result of the merger or consolidation, own at least 50% of
the merger or consolidation; or (iii) any nomination and election of
50% or more of all members of the Board of Directors of the Company
that occurs at any 3 consecutive meetings of the shareholders, whose
election is without the recommendation of the Board. "Change in
Control" shall not include the acquisition of the Company's stock by
any Company employee benefit plans or any actions by the members of
the Board of Directors, when acting as the Board of Directors.
d. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
e. "Termination Date" shall mean the last day the Employee performs any
services for Vista, or any related entity or successor entity, and
is paid wages as an employee, exclusive of vacation and severance
payments, and excluding any leave of absence periods.
2. Term. The term of the Agreement shall commence on the Commencement Date,
and shall continue on an uninterrupted basis until terminated with the
mutual consent of the Employee and Vista, or any related entity or
successor entity, or upon the voluntary termination of the Employee's
employment with Vista or any successor entity. Upon the Employee's
Termination Date, no additional services shall be required by the Employee
(unless provided otherwise under any consulting agreement), and any
payments due for the performance of any services, and reimbursement for
any expenses, shall be made within a period of 30 days from the
Termination Date.
3. Condition for Severance Benefits. In order to be entitled to any severance
benefits, the Employee agrees to execute a General Release that shall
fully release and forever discharge the company and the shareholders,
officers, employees and directors of the Company and any and all related
companies, from all claims or demands the Employee may have based on
employment with the Company. These claims shall include, but are not
limited to, claims arising under the Constitution of the United Sates, a
release of any rights or claims the Employee may have under the Age
Discrimination in Employment Act of 1967; Title VII of the Civil Right Act
of 1964; the Civil Rights Act of 1966; the Equal Pay Act; or any other
federal, state or local laws or regulations prohibiting employment
discrimination; the Employee Retirement Income Security Act of 1974;
Executive Orders 11246 and 11141; the Constitution of the State of New
Jersey or any other states in which the Employee resides or works; any New
Jersey or other state laws against discrimination; any claims of breach of
public policy of the State of New Jersey or other state, negligence,
breach of contract, wrongful discharge, constructive discharge, breach of
an implied covenant of good faith and fair dealings; any express or
implied
24
<PAGE>
contracts with the Company or any related companies; any federal or state
common law and any federal, state or local statutes, ordinances and
regulations.
The General Release shall be in a format prepared by the Company, which
shall be consistent with the above provisions and shall comply with the
Older Workers Benefit Protection Act of 1990 ("OWBPA"), including a 21 day
period to review the General Release, and an 7 day revocation period (or
any other periods required under any future laws). Any severance payments
shall be the Employee's exclusive right and remedy against the Company.
4. Severance Benefits. The Employee's employment may be terminated by the
Employee or by the Company or any related entity or successor entity
without "Cause", notice or liability at any time. Upon the occurrence of
any termination of employment, the following severance benefits shall be
provided, depending upon the specific circumstances of any termination:
a. Basic Severance Benefit. If the Company, or any related entity or
successor entity terminates the Employee's employment with the
Company for any reason, without "Cause", the Employee shall be
entitled to a Basic Severance Benefit equal to payment of the
Employee's Base Salary for a period of 24 months.
b. Change in Control Severance Benefit. If the Company, or any related
entity or successor entity terminates the Employee's employment in
anticipation of a reorganization or a "Change in Control", or if the
Company, or any related entity or any successor entity terminates
the Employee's employment following a Change in Control for any
other reasons without "Cause", or if the Employee's employment is
"constructively terminated" as defined in Section 8, the Employee
shall receive a payment equal to the Employee's Base Salary for a
period of 36 months.
All severance benefits shall be paid in accordance with the Company's
normal payroll practices or in a single lump sum payment, within the
discretion of the Company. However, the severance benefit shall not be
paid until after 8 days after receipt of an executed copy of a General
Release by the Company as provided in Section 3 and the return of all
property to the Company, as provided in Section 10. Severance benefits
shall also be reduced to the extent of any advance payments, for any
excess expense reimbursements, and for any amounts owed to the Company by
the Employee (other than normal personal residence, home equity and
similar loans).
In the event of the death of the Employee after the commencement of
entitlement to any severance benefit payable under Section 4, all benefits
shall be paid in a lump sum to the Employee's spouse, or if no spouse
exists, to the Employee's estate.
Notwithstanding any interpretation to the contrary, in no event shall the
Employee be entitled to both the Basic Severance Benefit and the Change in
Control Severance
25
<PAGE>
Benefit.
5. Benefits. Upon the occurrence of any termination of employment by the
Company, or any related entity or successor entity without "Cause", or
upon the occurrence of a "constructive termination" in accordance with
Section 8, the Employee shall be entitled to the following general
benefits.
a. All salary and wages through the Termination Date shall be paid in
accordance with the Company's normal payroll procedures.
b. All accrued vacation pay shall be included in the Employee's final
paycheck.
c. The Employee shall be entitled to elect to receive continuation
health coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") after his Termination Date, which is the date
of the "qualifying event" under COBRA. The Company shall pay the
full cost of any COBRA coverage elected by the Employee, or any
member of the Employee's immediate family for a period of up to 18
months.
d. All medical, group-term life insurance, long-term disability,
short-term disability, and other welfare benefits shall be
terminated in accordance with the provisions of all plans. The
Employee may be entitled to individual conversion privileges under
the various policies. The Company shall provide such information to
the Employee regarding all individual conversion rights.
e. The Employee shall be entitled to a distribution of all benefits
under the Company retirement programs, including the Vista Pension
and Section 401(k) Plans, in accordance with the provisions of all
Plan documents. All severance benefits paid in the Plan Year in
which the Termination Date occurs (but not any subsequent Plan
Years) shall be treated as Compensation for purposes of Employee
Salary Reduction Contributions to the Section 401(k) Plan, if
permitted in accordance with the provisions of the Section 401(k)
Plan, unless the Employee directs otherwise. For purposes of all
other Company Contributions, all severance benefits shall be
considered as Compensation to the extent required under the Section
401(k) Plan.
f. The Employee shall be entitled to exercise any vested Stock Options,
in accordance with the provisions of the 1998 Stock Compensation
Plan, and any individual Option Agreements.
g. The Employee shall become vested in any unvested Stock Grants under
the ROE Plan.
h. Any executive benefits shall terminate on the Termination Date.
i. The Employee shall be entitled to state unemployment benefits, in
accordance
26
<PAGE>
with the rules for the State of New Jersey.
Notwithstanding any provision to the contrary, except as provided in this
Agreement, the payment of any severance benefits shall not be treated as
extending any individual's employment for any employee benefit or
employment purposes.
6. Voluntary Termination, Retirement, Death and Disability. The Employee
shall not be entitled to any severance benefits in the event of any
voluntary termination of employment either before, or after, any Change in
Control or other corporate events, unless a "constructive termination"
shall occur, as defined in Section 8. Furthermore, notwithstanding any
provisions to the contrary, no severance benefits shall be payable in the
event the Employee becomes disabled, dies, or otherwise retires in
accordance with the normal policies of the Company.
7. Discharge for Cause. The Company, or any related entity or successor
entity may immediately terminate this Agreement and the Employee's
employment at any time for "Cause". Upon termination of this Agreement for
Cause, the Company shall have no further obligations to the Employee other
than to pay for services performed and reimbursement for expenses payable
as of the date of such termination, and to provide any benefits as legally
required under Section 4. However, the Employee shall have no right to the
payment of any Basic Severance or Change in Control Severance Benefits in
the event of a termination for "Cause".
8. Change in Control.
a. Upon the occurrence of a "Change in Control" of the Company,
including any affiliated or subsidiary companies, followed by the
involuntary termination of the Employee's employment within a period
of 1 year after such Change in Control, other than for "Cause",
retirement, death or disability, the Employee shall be entitled to
receive all severance benefits identified in Sections 4(b) and 5 of
this Agreement, and any other benefits to which the Employee is
entitled under any other Company programs. Upon the occurrence of a
Change in Control and a "Constructive Termination" of the Employee,
the Employee shall also have the right to voluntarily terminate the
Employee's employment at any time for a period of up to 1 year after
such Change in Control, and to receive the severance benefits
identified in Section 4(b) and 5. For purposes of this Agreement, a
"Constructive Termination" shall be deemed to occur as a result of
any reduction in the Employee's Base Salary determined as of the
date of the Change in Control; or the relocation of the Employee's
principal place of employment by more than 70 miles from its
location immediately prior to the Change in Control. Upon the
occurrence of any of these events, the Employee shall provide the
Company with not less than 14 days prior written notice of
resignation given within a reasonable period of time not to exceed 3
months after the occurrence of the last event giving rise to said
Constructive Termination. If the Company in good faith disputes that
the Employee is entitled to terminate the Employee's employment due
to a
27
<PAGE>
Constructive Termination, it shall so inform the Employee in writing
within 14 days of the written notice provided by the Employee. If
disputed by the Company, the parties shall promptly proceed to
arbitration in accordance with Section 21 of this Agreement. Pending
resolution of the dispute by arbitration, the Company shall continue
to pay the Employee's Base Salary and benefits. If it is ultimately
determined that the Employee did not have grounds for voluntarily
terminating the Employee's employment, the Employee shall return to
the Company, without interest, all cash compensation received by the
Employee subsequent to the day the Employee's employment was
terminated.
b. Notwithstanding any provision to the contrary, in the event that:
i. The aggregate payments of benefits to be made or afforded to
the Employee under this Agreement (the "Termination Benefits")
would be deemed to include an "excess parachute payment" under
Section 280G of the Code or any successor thereto; and
ii. If such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is $1 less
than an amount equal to the total amount of any payments
permissible under Section 280G of the Code or any successor
thereto.
then the Termination Benefits to be paid to the Employee shall be so
reduced so as to be a Non-Triggering Amount. The allocation of the
reduction required hereby among the Termination Benefits provided by
the preceding paragraphs of this Section 8 shall be determined by
the Employee, with the consent of the Company.
c. Notwithstanding the foregoing provisions, if after the application
of Section 8(b) above, it is determined that the Employee received
an excess parachute payment despite the reduction in the Employee's
Termination Benefits, the excess of such Termination Benefits paid
to the Employee of 2.99 times the Employee's "base amount", as
defined in Section 280G of the Code, shall be treated as a loan to
the Employee and the Employee shall be required to repay such amount
to the Company, or the successor of the Company, within 5 years of
the date of such determination, with interest at the prime rate, as
set forth from time to time in the Wall Street Journal.
9. Trade Secrets, Confidential and/or Proprietary Information. The Employee
shall regard and preserve as confidential: (i) all trade secrets and/or
other proprietary and/or confidential information belonging to the
Company; and (ii) all trade secrets and/or other proprietary and/or
confidential information belonging to a third party which have been
confidentially disclosed to the Company, which trade secrets and/or other
proprietary and/or confidential information described in (i) and (ii)
above (collectively, "Confidential Information") have been or may be
developed or obtained by or disclosed to the Employee by reason of the
Employee's relationship with the Company. The Employee
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shall not, without written authority from the Company to do so, use for
the Employee's own benefit or purposes, or the benefit or purpose of any
person or entity other than the Company, nor disclose to others, either
during the term of this Agreement or thereafter, except as required in the
course of performance of services under this Agreement, any Confidential
Information. This provision shall not apply to the Employee's general
expertise and know-how, nor to Confidential Information that has been
voluntarily disclosed to the public by the Company, or otherwise entered
the public domain through lawful means. Confidential information shall
include, but not be limited to, all nonpublic information relating to the
Company's (i) business, research, development and marketing plans,
strategies and forecasts; (ii) business; (iii) products (whether existing,
in development, or being contemplated); (iv) customers' identities,
usages, and requirements; (v) reports; (vi) formulas; (vii)
specifications; (viii) designs, software and other technology; and (ix)
terms of contracts.
10. Return of Documents. Upon the termination of the Employee's employment,
the Employee shall return all media on which any Confidential Information
may be recorded or located, including, without limitation, documents,
program source codes, samples, models, blueprints, photocopies,
photographs, drawings, descriptions, reproductions, cards, tapes, discs
and other storage facilities (collectively "Documentation") made by the
Employee or that come into the Employee's possession by reason of the
Employee's relationship hereunder with the Company are the property of the
Company and shall be returned to the Company. The Employee shall not
deliver, reproduce, or in any way allow any Documentation to be delivered
or used by any third party without the written direction or consent of a
duly authorized representative of the Company.
11. Covenant Not to Compete. The Employee agrees that during the Employee's
association with the Company and for 2 years after the Employee's
Termination Date, the Employee shall not, directly or indirectly, through
any other person, firm, corporation or other entity, compete with the
Company, anywhere within a radius of 30 miles from 305 Roseberry Street,
Phillipsburg, New Jersey 08865, in the performance of banking services,
including the operation of branches for any competing entities within the
30 mile radius; or within 10 miles of any branches of the Company or any
related entity prior to any Change in Control. The Company and the
Employee agree that the Company's business is regional in scope and is
highly competitive. The Employee, therefore acknowledges that the scope of
this Non-Solicitation is reasonable, and applies in the context of any
voluntary or involuntary termination of employment. In the event that any
aspect of this covenant is deemed to be unreasonable by a court, the
Employee shall submit to the reduction of either the time or territory to
such an area or period as the court shall deem reasonable. In the event
the Employee violates this covenant, then the time limitation shall be
extended for a period of time equal to the pendency of such proceedings,
including appeals.
12. No Solicitation of Employees. During the course of employment with the
Company, the Employee shall come into contact and become familiar with the
Company's employees, their knowledge, skills, abilities, salaries,
commissions, draws, benefits, and
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other matters with respect to such employees, all of which information is
not generally known to the public, but has been developed, acquired or
compiled by the Company at its great effort and expense. Any solicitation,
luring away or hiring of such employees of the Company shall be highly
detrimental to the business of the Company and may cause serious loss of
business and great and irreparable harm. Consequently, the Employee
covenants and agrees that during the course of employment with the Company
and for a period of 1 year after the Employee's Termination Date, whether
voluntary or involuntary, the Employee shall not, directly or indirectly,
whether on behalf of the Employee or others, solicit, lure or hire away
any employees of the Company or assist or aid in any such activity.
13. Waivers. A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach
thereof. All rights, remedies, undertakings or obligations contained in
this Agreement shall be cumulative and none of them shall be in limitation
of any other right, remedy, undertaking or obligation of either party.
14. Severability. If any one or more provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
15. Injunction Relief. Damages may be an inadequate remedy in the event of an
intended, threatened or actual breach by the Employee of any of the
provisions of this Agreement. Any breach by the Employee may cause the
Company great and irreparable injury and damage. To the extent that such
injury and damage can be demonstrated to a court of competent
jurisdiction, the Company shall be entitled, without waiving any
additional rights or remedies otherwise available to the Company at law,
or in equity or by statute, to injunctive and other equitable relief in
the event of an intended, threatened, or actual breach by the Employee of
any said covenants.
16. Liability Coverage. The Company, and any related entity or successor
entities agrees to indemnify the Employee in accordance with the terms of
the Vista Bylaws. The Company also agrees to continue to provide any
existing officers and directors insurance and/or liability policies
covering the Employee through any Termination Date, and shall use its best
efforts to continue to maintain the policies in effect at the time of
termination or comparable policies covering the Employee for the
Employee's period of employment with the Company, and for a period of 3
years after the date of any termination. In no event shall the Employee
receive any lesser officers and directors protection, than is provided to
the current active Board of Directors.
17. Execution of Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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18. Entire Agreement. This Agreement contains the entire agreement between the
Employee and the Company with respect to the transactions contemplated
herein, and supersedes all previous written and oral negotiations,
commitments, and understandings. Its terms shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by
each of the parties hereto and making specific reference to this
Agreement.
19. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Employee, his or her heirs, executors, administrators, and
legal representations, and the Company, it successors and assigns.
20. Amendment. This Agreement may not be altered, changed, amended or
terminated except by written agreement signed by the Employee and the
Company.
21. Arbitration. Any controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration in accordance with the rules of
the American Arbitration Association. The arbitration award shall be final
and binding and judgement upon the award rendered in such arbitration may
be entered in any court having jurisdiction thereof.
22. Right to Withhold. The Company shall have the right to deduct from
payments due to the Employee under this Agreement, any and all Federal,
state or local taxes, if any, required by law to be withheld with respect
to such payments.
23. Written Notices. Any notice, request or other document to be given
hereunder by the Company to the Employee or by the Employee to the Company
shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid and addressed as follows:
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If to the Company:
Vista Bancorp, Inc.
305 Roseberry Street
Phillipsburg, New Jersey 08865
Attention: President
If to the Employee:
Barbara Harding
305 Roseberry Street
Phillipsburg, New Jersey 08865
24. Non-Defamation. During the course of the Employee's employment by the
Company, or any related entity or successor entities, or at any time
thereafter, the Employee shall not, directly or indirectly, in public or
private, deprecate, impugn or otherwise make any remarks that would tend
to or be construed to tend to defame the Company, or any related entity or
successor entities, or their reputations, nor shall the Employee assist
any other person, firm or company in so doing. The Company also agrees
that it will not, directly or indirectly, in public or private, deprecate,
impugn or otherwise make any remarks that would tend to or be construed to
tend to defame the Employee or the Employee's reputation, nor will the
Company assist any other person, firm or entities in engaging in such
activities.
25. References. After the termination of the Employee's employment with the
Company, or any related entity or successor entities, reference inquiries
from prospective employers shall be handled by only verifying the
Employee's dates of employment, last position held, and levels of
Compensation.
26. New Jersey Law. The Employee and the Company agree that this Agreement and
any interpretation thereof shall be governed by the laws of the State of
New Jersey.
27. Headings. The headings contained in this Agreement are for reference only.
In the event of a conflict between a heading and the context of any
Section, the context of the Section shall control.
WITNESS BARBARA HARDING
- ------------------------------- ------------------------------------
WITNESS VISTA BANCORP, INC.
- ------------------------------- ------------------------------------
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SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") made as of the 21st day of
July, 1999 (the "Commencement Date") between Vista Bancorp, Inc., a corporation
duly organized under the laws of the State of New Jersey, with offices at 305
Roseberry Street, Phillipsburg, New Jersey 08865 ("Vista" or the Company"), and
David L. Hensley of 305 Roseberry Street, Phillipsburg, New Jersey 08865 (the
"Employee").
WHEREAS, the Employee has been a loyal and long-term employee of Vista or
a related entity for many years; and
WHEREAS, Vista wishes to provide the Employee with the comfort of knowing
that if the Employee loses his or her position with Vista, or any related
entities, as a result of any involuntary termination or upon a "change in
control", the Employee will be entitled to receive a severance benefit; and
WHEREAS, the Employee acknowledges that the Company does not maintain any
severance programs as defined under the Employee Retirement Income Security Act
of 1974 ("ERISA"), and that, prior to the Commencement Date, the Employee is not
entitled to any severance benefits upon a termination of employment.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following words and
phrases shall be defined as follows:
f. "Base Salary" shall mean the base salary which is payable on a
regular basis to the Employee, excluding bonuses and taxable fringe
benefits.
g. "Cause" shall include, but not be limited to, any false statement
that was intentionally or negligently made, contained in any
corporate records; the commission by the Employee of any crime or
fraud against the Company or its property, or any crime involving
moral turpitude or reasonably likely to bring discredit upon the
Company; and any violation of the Company's operating policies.
h. "Change in Control" shall mean: (i) the acquisition of ownership of
stock of the Company, by any person (including, without limitation,
a corporation, trust, partnership, joint venture, limited liability
company (a "Person") or by any group of Persons), whether directly,
indirectly, beneficially or of record, which acquisition, together
with stock held by such person or group, represents more than 50% of
the total voting power of all outstanding stock of the Company
(provided that no Change in Control shall occur under this
subparagraph (i) if the Person acquiring any additional stock
already possessed more than 50% of the
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total fair market voting power of the stock of the Company); (ii)
any merger or consolidation of the Company which the stockholders of
the Company before such merger or consolidation do not, as a result
of the merger or consolidation, own at least 50% of the merger or
consolidation; or (iii) any nomination and election of 50% or more
of all members of the Board of Directors of the Company that occurs
at any 3 consecutive meetings of the shareholders, whose election is
without the recommendation of the Board. "Change in Control" shall
not include the acquisition of the Company's stock by any Company
employee benefit plans or any actions by the members of the Board of
Directors, when acting as the Board of Directors.
i. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
j. "Termination Date" shall mean the last day the Employee performs any
services for Vista, or any related entity or successor entity, and
is paid wages as an employee, exclusive of vacation and severance
payments, and excluding any leave of absence periods.
28. Term. The term of the Agreement shall commence on the Commencement Date,
and shall continue on an uninterrupted basis until terminated with the
mutual consent of the Employee and Vista, or any related entity or
successor entity, or upon the voluntary termination of the Employee's
employment with Vista or any successor entity. Upon the Employee's
Termination Date, no additional services shall be required by the Employee
(unless provided otherwise under any consulting agreement), and any
payments due for the performance of any services, and reimbursement for
any expenses, shall be made within a period of 30 days from the
Termination Date.
29. Condition for Severance Benefits. In order to be entitled to any severance
benefits, the Employee agrees to execute a General Release that shall
fully release and forever discharge the company and the shareholders,
officers, employees and directors of the Company and any and all related
companies, from all claims or demands the Employee may have based on
employment with the Company. These claims shall include, but are not
limited to, claims arising under the Constitution of the United Sates, a
release of any rights or claims the Employee may have under the Age
Discrimination in Employment Act of 1967; Title VII of the Civil Right Act
of 1964; the Civil Rights Act of 1966; the Equal Pay Act; or any other
federal, state or local laws or regulations prohibiting employment
discrimination; the Employee Retirement Income Security Act of 1974;
Executive Orders 11246 and 11141; the Constitution of the State of New
Jersey or any other states in which the Employee resides or works; any New
Jersey or other state laws against discrimination; any claims of breach of
public policy of the State of New Jersey or other state, negligence,
breach of contract, wrongful discharge, constructive discharge, breach of
an implied covenant of good faith and fair dealings; any express or
implied
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<PAGE>
contracts with the Company or any related companies; any federal or state
common law and any federal, state or local statutes, ordinances and
regulations.
The General Release shall be in a format prepared by the Company, which
shall be consistent with the above provisions and shall comply with the
Older Workers Benefit Protection Act of 1990 ("OWBPA"), including a 21 day
period to review the General Release, and an 7 day revocation period (or
any other periods required under any future laws). Any severance payments
shall be the Employee's exclusive right and remedy against the Company.
30. Severance Benefits. The Employee's employment may be terminated by the
Employee or by the Company or any related entity or successor entity
without "Cause", notice or liability at any time. Upon the occurrence of
any termination of employment, the following severance benefits shall be
provided, depending upon the specific circumstances of any termination:
c. Basic Severance Benefit. If the Company, or any related entity or
successor entity terminates the Employee's employment with the
Company for any reason, without "Cause", the Employee shall be
entitled to a Basic Severance Benefit equal to payment of the
Employee's Base Salary for a period of 12 months.
d. Change in Control Severance Benefit. If the Company, or any related
entity or successor entity terminates the Employee's employment in
anticipation of a reorganization or a "Change in Control", or if the
Company, or any related entity or any successor entity terminates
the Employee's employment following a Change in Control for any
other reasons without "Cause", or if the Employee's employment is
"constructively terminated" as defined in Section 8, the Employee
shall receive a payment equal to the Employee's Base Salary for a
period of 24 months.
All severance benefits shall be paid in accordance with the Company's
normal payroll practices or in a single lump sum payment, within the
discretion of the Company. However, the severance benefit shall not be
paid until after 8 days after receipt of an executed copy of a General
Release by the Company as provided in Section 3 and the return of all
property to the Company, as provided in Section 10. Severance benefits
shall also be reduced to the extent of any advance payments, for any
excess expense reimbursements, and for any amounts owed to the Company by
the Employee (other than normal personal residence, home equity and
similar loans).
In the event of the death of the Employee after the commencement of
entitlement to any severance benefit payable under Section 4, all benefits
shall be paid in a lump sum to the Employee's spouse, or if no spouse
exists, to the Employee's estate.
Notwithstanding any interpretation to the contrary, in no event shall the
Employee be
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entitled to both the Basic Severance Benefit and the Change in Control
Severance Benefit.
31. Benefits. Upon the occurrence of any termination of employment by the
Company, or any related entity or successor entity without "Cause", or
upon the occurrence of a "constructive termination" in accordance with
Section 8, the Employee shall be entitled to the following general
benefits.
j. All salary and wages through the Termination Date shall be paid in
accordance with the Company's normal payroll procedures.
k. All accrued vacation pay shall be included in the Employee's final
paycheck.
l. The Employee shall be entitled to elect to receive continuation
health coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") after his Termination Date, which is the date
of the "qualifying event" under COBRA. The Company shall pay the
full cost of any COBRA coverage elected by the Employee, or any
member of the Employee's immediate family for a period of up to 18
months.
m. All medical, group-term life insurance, long-term disability,
short-term disability, and other welfare benefits shall be
terminated in accordance with the provisions of all plans. The
Employee may be entitled to individual conversion privileges under
the various policies. The Company shall provide such information to
the Employee regarding all individual conversion rights.
n. The Employee shall be entitled to a distribution of all benefits
under the Company retirement programs, including the Vista Pension
and Section 401(k) Plans, in accordance with the provisions of all
Plan documents. All severance benefits paid in the Plan Year in
which the Termination Date occurs (but not any subsequent Plan
Years) shall be treated as Compensation for purposes of Employee
Salary Reduction Contributions to the Section 401(k) Plan, if
permitted in accordance with the provisions of the Section 401(k)
Plan, unless the Employee directs otherwise. For purposes of all
other Company Contributions, all severance benefits shall be
considered as Compensation to the extent required under the Section
401(k) Plan.
o. The Employee shall be entitled to exercise any vested Stock Options,
in accordance with the provisions of the 1998 Stock Compensation
Plan, and any individual Option Agreements.
p. The Employee shall become vested in any unvested Stock Grants under
the ROE Plan.
q. Any executive benefits shall terminate on the Termination Date.
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r. The Employee shall be entitled to state unemployment benefits, in
accordance with the rules for the State of New Jersey.
Notwithstanding any provision to the contrary, except as provided in this
Agreement, the payment of any severance benefits shall not be treated as
extending any individual's employment for any employee benefit or
employment purposes.
32. Voluntary Termination, Retirement, Death and Disability. The Employee
shall not be entitled to any severance benefits in the event of any
voluntary termination of employment either before, or after, any Change in
Control or other corporate events, unless a "constructive termination"
shall occur, as defined in Section 8. Furthermore, notwithstanding any
provisions to the contrary, no severance benefits shall be payable in the
event the Employee becomes disabled, dies, or otherwise retires in
accordance with the normal policies of the Company.
33. Discharge for Cause. The Company, or any related entity or successor
entity may immediately terminate this Agreement and the Employee's
employment at any time for "Cause". Upon termination of this Agreement for
Cause, the Company shall have no further obligations to the Employee other
than to pay for services performed and reimbursement for expenses payable
as of the date of such termination, and to provide any benefits as legally
required under Section 4. However, the Employee shall have no right to the
payment of any Basic Severance or Change in Control Severance Benefits in
the event of a termination for "Cause".
34. Change in Control.
d. Upon the occurrence of a "Change in Control" of the Company,
including any affiliated or subsidiary companies, followed by the
involuntary termination of the Employee's employment within a period
of 1 year after such Change in Control, other than for "Cause",
retirement, death or disability, the Employee shall be entitled to
receive all severance benefits identified in Sections 4(b) and 5 of
this Agreement, and any other benefits to which the Employee is
entitled under any other Company programs. Upon the occurrence of a
Change in Control and a "Constructive Termination" of the Employee,
the Employee shall also have the right to voluntarily terminate the
Employee's employment at any time for a period of up to 1 year after
such Change in Control, and to receive the severance benefits
identified in Section 4(b) and 5. For purposes of this Agreement, a
"Constructive Termination" shall be deemed to occur as a result of
any reduction in the Employee's Base Salary determined as of the
date of the Change in Control; or the relocation of the Employee's
principal place of employment by more than 70 miles from its
location immediately prior to the Change in Control. Upon the
occurrence of any of these events, the Employee shall provide the
Company with not less than 14 days prior written notice of
resignation given within a reasonable
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period of time not to exceed 3 months after the occurrence of the last
event giving rise to said Constructive Termination. If the Company in good
faith disputes that the Employee is entitled to terminate the Employee's
employment due to a Constructive Termination, it shall so inform the
Employee in writing within 14 days of the written notice provided by the
Employee. If disputed by the Company, the parties shall promptly proceed
to arbitration in accordance with Section 21 of this Agreement. Pending
resolution of the dispute by arbitration, the Company shall continue to
pay the Employee's Base Salary and benefits. If it is ultimately
determined that the Employee did not have grounds for voluntarily
terminating the Employee's employment, the Employee shall return to the
Company, without interest, all cash compensation received by the Employee
subsequent to the day the Employee's employment was terminated.
e. Notwithstanding any provision to the contrary, in the event that:
i. The aggregate payments of benefits to be made or afforded to
the Employee under this Agreement (the "Termination Benefits")
would be deemed to include an "excess parachute payment" under
Section 280G of the Code or any successor thereto; and
ii. If such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is $1 less than
an amount equal to the total amount of any payments
permissible under Section 280G of the Code or any successor
thereto.
then the Termination Benefits to be paid to the Employee shall be so
reduced so as to be a Non-Triggering Amount. The allocation of the
reduction required hereby among the Termination Benefits provided by
the preceding paragraphs of this Section 8 shall be determined by
the Employee, with the consent of the Company.
f. Notwithstanding the foregoing provisions, if after the application
of Section 8(b) above, it is determined that the Employee received
an excess parachute payment despite the reduction in the Employee's
Termination Benefits, the excess of such Termination Benefits paid
to the Employee of 2.99 times the Employee's "base amount", as
defined in Section 280G of the Code, shall be treated as a loan to
the Employee and the Employee shall be required to repay such amount
to the Company, or the successor of the Company, within 5 years of
the date of such determination, with interest at the prime rate, as
set forth from time to time in the Wall Street Journal.
35. Trade Secrets, Confidential and/or Proprietary Information. The Employee
shall regard and preserve as confidential: (i) all trade secrets and/or
other proprietary and/or confidential information belonging to the
Company; and (ii) all trade secrets and/or other proprietary and/or
confidential information belonging to a third party which have been
confidentially disclosed to the Company, which trade secrets and/or other
proprietary
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and/or confidential information described in (i) and (ii) above
(collectively, "Confidential Information") have been or may be developed
or obtained by or disclosed to the Employee by reason of the Employee's
relationship with the Company. The Employee shall not, without written
authority from the Company to do so, use for the Employee's own benefit or
purposes, or the benefit or purpose of any person or entity other than the
Company, nor disclose to others, either during the term of this Agreement
or thereafter, except as required in the course of performance of services
under this Agreement, any Confidential Information. This provision shall
not apply to the Employee's general expertise and know-how, nor to
Confidential Information that has been voluntarily disclosed to the public
by the Company, or otherwise entered the public domain through lawful
means. Confidential information shall include, but not be limited to, all
nonpublic information relating to the Company's (i) business, research,
development and marketing plans, strategies and forecasts; (ii) business;
(iii) products (whether existing, in development, or being contemplated);
(iv) customers' identities, usages, and requirements; (v) reports; (vi)
formulas; (vii) specifications; (viii) designs, software and other
technology; and (ix) terms of contracts.
36. Return of Documents. Upon the termination of the Employee's employment,
the Employee shall return all media on which any Confidential Information
may be recorded or located, including, without limitation, documents,
program source codes, samples, models, blueprints, photocopies,
photographs, drawings, descriptions, reproductions, cards, tapes, discs
and other storage facilities (collectively "Documentation") made by the
Employee or that come into the Employee's possession by reason of the
Employee's relationship hereunder with the Company are the property of the
Company and shall be returned to the Company. The Employee shall not
deliver, reproduce, or in any way allow any Documentation to be delivered
or used by any third party without the written direction or consent of a
duly authorized representative of the Company.
37. Covenant Not to Compete. The Employee agrees that during the Employee's
association with the Company and for 1 year after the Employee's
Termination Date, the Employee shall not, directly or indirectly, through
any other person, firm, corporation or other entity, compete with the
Company, anywhere within a radius of 30 miles from 305 Roseberry Street,
Phillipsburg, New Jersey 08865, in the performance of banking services,
including the operation of branches for any competing entities within the
30 mile radius; or within 10 miles of any branches of the Company or any
related entity prior to any Change in Control. The Company and the
Employee agree that the Company's business is regional in scope and is
highly competitive. The Employee, therefore acknowledges that the scope of
this Non-Solicitation is reasonable, and applies in the context of any
voluntary or involuntary termination of employment. In the event that any
aspect of this covenant is deemed to be unreasonable by a court, the
Employee shall submit to the reduction of either the time or territory to
such an area or period as the court shall deem reasonable. In the event
the Employee violates this covenant, then the time limitation shall be
extended for a period of time equal to the pendency of such proceedings,
including appeals.
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38. No Solicitation of Employees. During the course of employment with the
Company, the Employee shall come into contact and become familiar with the
Company's employees, their knowledge, skills, abilities, salaries,
commissions, draws, benefits, and other matters with respect to such
employees, all of which information is not generally known to the public,
but has been developed, acquired or compiled by the Company at its great
effort and expense. Any solicitation, luring away or hiring of such
employees of the Company shall be highly detrimental to the business of
the Company and may cause serious loss of business and great and
irreparable harm. Consequently, the Employee covenants and agrees that
during the course of employment with the Company and for a period of 1
year after the Employee's Termination Date, whether voluntary or
involuntary, the Employee shall not, directly or indirectly, whether on
behalf of the Employee or others, solicit, lure or hire away any employees
of the Company or assist or aid in any such activity.
39. Waivers. A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach
thereof. All rights, remedies, undertakings or obligations contained in
this Agreement shall be cumulative and none of them shall be in limitation
of any other right, remedy, undertaking or obligation of either party.
40. Severability. If any one or more provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
41. Injunction Relief. Damages may be an inadequate remedy in the event of an
intended, threatened or actual breach by the Employee of any of the
provisions of this Agreement. Any breach by the Employee may cause the
Company great and irreparable injury and damage. To the extent that such
injury and damage can be demonstrated to a court of competent
jurisdiction, the Company shall be entitled, without waiving any
additional rights or remedies otherwise available to the Company at law,
or in equity or by statute, to injunctive and other equitable relief in
the event of an intended, threatened, or actual breach by the Employee of
any said covenants.
42. Liability Coverage. The Company, and any related entity or successor
entities agrees to indemnify the Employee in accordance with the terms of
the Vista Bylaws. The Company also agrees to continue to provide any
existing officers and directors insurance and/or liability policies
covering the Employee through any Termination Date, and shall use its best
efforts to continue to maintain the policies in effect at the time of
termination or comparable policies covering the Employee for the
Employee's period of employment with the Company, and for a period of 3
years after the date of any termination. In no event shall the Employee
receive any lesser officers and directors protection, than is provided to
the current active Board of Directors.
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43. Execution of Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
44. Entire Agreement. This Agreement contains the entire agreement between the
Employee and the Company with respect to the transactions contemplated
herein, and supersedes all previous written and oral negotiations,
commitments, and understandings. Its terms shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by
each of the parties hereto and making specific reference to this
Agreement.
45. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Employee, his or her heirs, executors, administrators, and
legal representations, and the Company, it successors and assigns.
46. Amendment. This Agreement may not be altered, changed, amended or
terminated except by written agreement signed by the Employee and the
Company.
47. Arbitration. Any controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration in accordance with the rules of
the American Arbitration Association. The arbitration award shall be final
and binding and judgement upon the award rendered in such arbitration may
be entered in any court having jurisdiction thereof.
48. Right to Withhold. The Company shall have the right to deduct from
payments due to the Employee under this Agreement, any and all Federal,
state or local taxes, if any, required by law to be withheld with respect
to such payments.
49. Written Notices. Any notice, request or other document to be given
hereunder by the Company to the Employee or by the Employee to the Company
shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid and addressed as follows:
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If to the Company:
Vista Bancorp, Inc.
305 Roseberry Street
Phillipsburg, New Jersey 08865
Attention: President
If to the Employee:
David L. Hensley
305 Roseberry Street
Phillipsburg, New Jersey 08865
50. Non-Defamation. During the course of the Employee's employment by the
Company, or any related entity or successor entities, or at any time
thereafter, the Employee shall not, directly or indirectly, in public or
private, deprecate, impugn or otherwise make any remarks that would tend
to or be construed to tend to defame the Company, or any related entity or
successor entities, or their reputations, nor shall the Employee assist
any other person, firm or company in so doing. The Company also agrees
that it will not, directly or indirectly, in public or private, deprecate,
impugn or otherwise make any remarks that would tend to or be construed to
tend to defame the Employee or the Employee's reputation, nor will the
Company assist any other person, firm or entities in engaging in such
activities.
51. References. After the termination of the Employee's employment with the
Company, or any related entity or successor entities, reference inquiries
from prospective employers shall be handled by only verifying the
Employee's dates of employment, last position held, and levels of
Compensation.
52. New Jersey Law. The Employee and the Company agree that this Agreement and
any interpretation thereof shall be governed by the laws of the State of
New Jersey.
53. Headings. The headings contained in this Agreement are for reference only.
In the event of a conflict between a heading and the context of any
Section, the context of the Section shall control.
WITNESS DAVID L. HENSLEY
- ------------------------------- ------------------------------------
WITNESS VISTA BANCORP, INC.
- ------------------------------- ------------------------------------
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SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") made as of the 21st day of
July, 1999 (the "Commencement Date") between Vista Bancorp, Inc., a corporation
duly organized under the laws of the State of New Jersey, with offices at 305
Roseberry Street, Phillipsburg, New Jersey 08865 ("Vista" or the Company"), and
Marc S. Winkler of 305 Roseberry Street, Phillipsburg, New Jersey 08865 (the
"Employee").
WHEREAS, the Employee has been a loyal and long-term employee of Vista or
a related entity for many years; and
WHEREAS, Vista wishes to provide the Employee with the comfort of knowing
that if the Employee loses his or her position with Vista, or any related
entities, as a result of any involuntary termination or upon a "change in
control", the Employee will be entitled to receive a severance benefit; and
WHEREAS, the Employee acknowledges that the Company does not maintain any
severance programs as defined under the Employee Retirement Income Security Act
of 1974 ("ERISA"), and that, prior to the Commencement Date, the Employee is not
entitled to any severance benefits upon a termination of employment.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following words and
phrases shall be defined as follows:
k. "Base Salary" shall mean the base salary which is payable on a
regular basis to the Employee, excluding bonuses and taxable fringe
benefits.
l. "Cause" shall include, but not be limited to, any false statement
that was intentionally or negligently made, contained in any
corporate records; the commission by the Employee of any crime or
fraud against the Company or its property, or any crime involving
moral turpitude or reasonably likely to bring discredit upon the
Company; and any violation of the Company's operating policies.
m. "Change in Control" shall mean: (i) the acquisition of ownership of
stock of the Company, by any person (including, without limitation,
a corporation, trust, partnership, joint venture, limited liability
company (a "Person") or by any group of Persons), whether directly,
indirectly, beneficially or of record, which acquisition, together
with stock held by such person or group, represents more than 50% of
the total voting power of all outstanding stock of the Company
(provided that no Change in Control shall occur under this
subparagraph (i) if the
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Person acquiring any additional stock already possessed more than
50% of the total fair market voting power of the stock of the
Company); (ii) any merger or consolidation of the Company which the
stockholders of the Company before such merger or consolidation do
not, as a result of the merger or consolidation, own at least 50% of
the merger or consolidation; or (iii) any nomination and election of
50% or more of all members of the Board of Directors of the Company
that occurs at any 3 consecutive meetings of the shareholders, whose
election is without the recommendation of the Board. "Change in
Control" shall not include the acquisition of the Company's stock by
any Company employee benefit plans or any actions by the members of
the Board of Directors, when acting as the Board of Directors.
n. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
o. "Termination Date" shall mean the last day the Employee performs any
services for Vista, or any related entity or successor entity, and
is paid wages as an employee, exclusive of vacation and severance
payments, and excluding any leave of absence periods.
54. Term. The term of the Agreement shall commence on the Commencement Date,
and shall continue on an uninterrupted basis until terminated with the
mutual consent of the Employee and Vista, or any related entity or
successor entity, or upon the voluntary termination of the Employee's
employment with Vista or any successor entity. Upon the Employee's
Termination Date, no additional services shall be required by the Employee
(unless provided otherwise under any consulting agreement), and any
payments due for the performance of any services, and reimbursement for
any expenses, shall be made within a period of 30 days from the
Termination Date.
55. Condition for Severance Benefits. In order to be entitled to any severance
benefits, the Employee agrees to execute a General Release that shall
fully release and forever discharge the company and the shareholders,
officers, employees and directors of the Company and any and all related
companies, from all claims or demands the Employee may have based on
employment with the Company. These claims shall include, but are not
limited to, claims arising under the Constitution of the United Sates, a
release of any rights or claims the Employee may have under the Age
Discrimination in Employment Act of 1967; Title VII of the Civil Right Act
of 1964; the Civil Rights Act of 1966; the Equal Pay Act; or any other
federal, state or local laws or regulations prohibiting employment
discrimination; the Employee Retirement Income Security Act of 1974;
Executive Orders 11246 and 11141; the Constitution of the State of New
Jersey or any other states in which the Employee resides or works; any New
Jersey or other state laws against discrimination; any claims of breach of
public policy of the State of New Jersey or other state, negligence,
breach of contract, wrongful discharge, constructive discharge, breach of
an implied covenant of good faith and fair dealings; any express or
implied
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contracts with the Company or any related companies; any federal or state
common law and any federal, state or local statutes, ordinances and
regulations.
The General Release shall be in a format prepared by the Company, which
shall be consistent with the above provisions and shall comply with the
Older Workers Benefit Protection Act of 1990 ("OWBPA"), including a 21 day
period to review the General Release, and an 7 day revocation period (or
any other periods required under any future laws). Any severance payments
shall be the Employee's exclusive right and remedy against the Company.
56. Severance Benefits. The Employee's employment may be terminated by the
Employee or by the Company or any related entity or successor entity
without "Cause", notice or liability at any time. Upon the occurrence of
any termination of employment, the following severance benefits shall be
provided, depending upon the specific circumstances of any termination:
e. Basic Severance Benefit. If the Company, or any related entity or
successor entity terminates the Employee's employment with the
Company for any reason, without "Cause", the Employee shall be
entitled to a Basic Severance Benefit equal to payment of the
Employee's Base Salary for a period of 12 months.
f. Change in Control Severance Benefit. If the Company, or any related
entity or successor entity terminates the Employee's employment in
anticipation of a reorganization or a "Change in Control", or if the
Company, or any related entity or any successor entity terminates
the Employee's employment following a Change in Control for any
other reasons without "Cause", or if the Employee's employment is
"constructively terminated" as defined in Section 8, the Employee
shall receive a payment equal to the Employee's Base Salary for a
period of 24 months.
All severance benefits shall be paid in accordance with the Company's
normal payroll practices or in a single lump sum payment, within the
discretion of the Company. However, the severance benefit shall not be
paid until after 8 days after receipt of an executed copy of a General
Release by the Company as provided in Section 3 and the return of all
property to the Company, as provided in Section 10. Severance benefits
shall also be reduced to the extent of any advance payments, for any
excess expense reimbursements, and for any amounts owed to the Company by
the Employee (other than normal personal residence, home equity and
similar loans).
In the event of the death of the Employee after the commencement of
entitlement to any severance benefit payable under Section 4, all benefits
shall be paid in a lump sum to the Employee's spouse, or if no spouse
exists, to the Employee's estate.
Notwithstanding any interpretation to the contrary, in no event shall the
Employee be entitled to both the Basic Severance Benefit and the Change in
Control Severance
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Benefit.
57. Benefits. Upon the occurrence of any termination of employment by the
Company, or any related entity or successor entity without "Cause", or
upon the occurrence of a "constructive termination" in accordance with
Section 8, the Employee shall be entitled to the following general
benefits.
s. All salary and wages through the Termination Date shall be paid in
accordance with the Company's normal payroll procedures.
t. All accrued vacation pay shall be included in the Employee's final
paycheck.
u. The Employee shall be entitled to elect to receive continuation
health coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") after his Termination Date, which is the date
of the "qualifying event" under COBRA. The Company shall pay the
full cost of any COBRA coverage elected by the Employee, or any
member of the Employee's immediate family for a period of up to 18
months.
v. All medical, group-term life insurance, long-term disability,
short-term disability, and other welfare benefits shall be
terminated in accordance with the provisions of all plans. The
Employee may be entitled to individual conversion privileges under
the various policies. The Company shall provide such information to
the Employee regarding all individual conversion rights.
w. The Employee shall be entitled to a distribution of all benefits
under the Company retirement programs, including the Vista Pension
and Section 401(k) Plans, in accordance with the provisions of all
Plan documents. All severance benefits paid in the Plan Year in
which the Termination Date occurs (but not any subsequent Plan
Years) shall be treated as Compensation for purposes of Employee
Salary Reduction Contributions to the Section 401(k) Plan, if
permitted in accordance with the provisions of the Section 401(k)
Plan, unless the Employee directs otherwise. For purposes of all
other Company Contributions, all severance benefits shall be
considered as Compensation to the extent required under the Section
401(k) Plan.
x. The Employee shall be entitled to exercise any vested Stock Options,
in accordance with the provisions of the 1998 Stock Compensation
Plan, and any individual Option Agreements.
y. The Employee shall become vested in any unvested Stock Grants under
the ROE Plan.
z. Any executive benefits shall terminate on the Termination Date.
aa. The Employee shall be entitled to state unemployment benefits, in
accordance
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with the rules for the State of New Jersey.
Notwithstanding any provision to the contrary, except as provided in this
Agreement, the payment of any severance benefits shall not be treated as
extending any individual's employment for any employee benefit or
employment purposes.
58. Voluntary Termination, Retirement, Death and Disability. The Employee
shall not be entitled to any severance benefits in the event of any
voluntary termination of employment either before, or after, any Change in
Control or other corporate events, unless a "constructive termination"
shall occur, as defined in Section 8. Furthermore, notwithstanding any
provisions to the contrary, no severance benefits shall be payable in the
event the Employee becomes disabled, dies, or otherwise retires in
accordance with the normal policies of the Company.
59. Discharge for Cause. The Company, or any related entity or successor
entity may immediately terminate this Agreement and the Employee's
employment at any time for "Cause". Upon termination of this Agreement for
Cause, the Company shall have no further obligations to the Employee other
than to pay for services performed and reimbursement for expenses payable
as of the date of such termination, and to provide any benefits as legally
required under Section 4. However, the Employee shall have no right to the
payment of any Basic Severance or Change in Control Severance Benefits in
the event of a termination for "Cause".
60. Change in Control.
g. Upon the occurrence of a "Change in Control" of the Company,
including any affiliated or subsidiary companies, followed by the
involuntary termination of the Employee's employment within a period
of 1 year after such Change in Control, other than for "Cause",
retirement, death or disability, the Employee shall be entitled to
receive all severance benefits identified in Sections 4(b) and 5 of
this Agreement, and any other benefits to which the Employee is
entitled under any other Company programs. Upon the occurrence of a
Change in Control and a "Constructive Termination" of the Employee,
the Employee shall also have the right to voluntarily terminate the
Employee's employment at any time for a period of up to 1 year after
such Change in Control, and to receive the severance benefits
identified in Section 4(b) and 5. For purposes of this Agreement, a
"Constructive Termination" shall be deemed to occur as a result of
any reduction in the Employee's Base Salary determined as of the
date of the Change in Control; or the relocation of the Employee's
principal place of employment by more than 70 miles from its
location immediately prior to the Change in Control. Upon the
occurrence of any of these events, the Employee shall provide the
Company with not less than 14 days prior written notice of
resignation given within a reasonable period of time not to exceed 3
months after the occurrence of the last event giving rise to said
Constructive Termination. If the Company in good faith disputes that
the Employee is entitled to terminate the Employee's employment due
to a
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Constructive Termination, it shall so inform the Employee in writing
within 14 days of the written notice provided by the Employee. If
disputed by the Company, the parties shall promptly proceed to
arbitration in accordance with Section 21 of this Agreement. Pending
resolution of the dispute by arbitration, the Company shall continue
to pay the Employee's Base Salary and benefits. If it is ultimately
determined that the Employee did not have grounds for voluntarily
terminating the Employee's employment, the Employee shall return to
the Company, without interest, all cash compensation received by the
Employee subsequent to the day the Employee's employment was
terminated.
h. Notwithstanding any provision to the contrary, in the event that:
i. The aggregate payments of benefits to be made or afforded to
the Employee under this Agreement (the "Termination Benefits")
would be deemed to include an "excess parachute payment" under
Section 280G of the Code or any successor thereto; and
ii. If such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is $1 less than
an amount equal to the total amount of any payments
permissible under Section 280G of the Code or any successor
thereto.
then the Termination Benefits to be paid to the Employee shall be so
reduced so as to be a Non-Triggering Amount. The allocation of the
reduction required hereby among the Termination Benefits provided by
the preceding paragraphs of this Section 8 shall be determined by
the Employee, with the consent of the Company.
i. Notwithstanding the foregoing provisions, if after the application
of Section 8(b) above, it is determined that the Employee received
an excess parachute payment despite the reduction in the Employee's
Termination Benefits, the excess of such Termination Benefits paid
to the Employee of 2.99 times the Employee's "base amount", as
defined in Section 280G of the Code, shall be treated as a loan to
the Employee and the Employee shall be required to repay such amount
to the Company, or the successor of the Company, within 5 years of
the date of such determination, with interest at the prime rate, as
set forth from time to time in the Wall Street Journal.
61. Trade Secrets, Confidential and/or Proprietary Information. The Employee
shall regard and preserve as confidential: (i) all trade secrets and/or
other proprietary and/or confidential information belonging to the
Company; and (ii) all trade secrets and/or other proprietary and/or
confidential information belonging to a third party which have been
confidentially disclosed to the Company, which trade secrets and/or other
proprietary and/or confidential information described in (i) and (ii)
above (collectively, "Confidential Information") have been or may be
developed or obtained by or disclosed to the Employee by reason of the
Employee's relationship with the Company. The Employee
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shall not, without written authority from the Company to do so, use for
the Employee's own benefit or purposes, or the benefit or purpose of any
person or entity other than the Company, nor disclose to others, either
during the term of this Agreement or thereafter, except as required in the
course of performance of services under this Agreement, any Confidential
Information. This provision shall not apply to the Employee's general
expertise and know-how, nor to Confidential Information that has been
voluntarily disclosed to the public by the Company, or otherwise entered
the public domain through lawful means. Confidential information shall
include, but not be limited to, all nonpublic information relating to the
Company's (i) business, research, development and marketing plans,
strategies and forecasts; (ii) business; (iii) products (whether existing,
in development, or being contemplated); (iv) customers' identities,
usages, and requirements; (v) reports; (vi) formulas; (vii)
specifications; (viii) designs, software and other technology; and (ix)
terms of contracts.
62. Return of Documents. Upon the termination of the Employee's employment,
the Employee shall return all media on which any Confidential Information
may be recorded or located, including, without limitation, documents,
program source codes, samples, models, blueprints, photocopies,
photographs, drawings, descriptions, reproductions, cards, tapes, discs
and other storage facilities (collectively "Documentation") made by the
Employee or that come into the Employee's possession by reason of the
Employee's relationship hereunder with the Company are the property of the
Company and shall be returned to the Company. The Employee shall not
deliver, reproduce, or in any way allow any Documentation to be delivered
or used by any third party without the written direction or consent of a
duly authorized representative of the Company.
63. Covenant Not to Compete. The Employee agrees that during the Employee's
association with the Company and for 1 year after the Employee's
Termination Date, the Employee shall not, directly or indirectly, through
any other person, firm, corporation or other entity, compete with the
Company, anywhere within a radius of 30 miles from 305 Roseberry Street,
Phillipsburg, New Jersey 08865, in the performance of banking services,
including the operation of branches for any competing entities within the
30 mile radius; or within 10 miles of any branches of the Company or any
related entity prior to any Change in Control. The Company and the
Employee agree that the Company's business is regional in scope and is
highly competitive. The Employee, therefore acknowledges that the scope of
this Non-Solicitation is reasonable, and applies in the context of any
voluntary or involuntary termination of employment. In the event that any
aspect of this covenant is deemed to be unreasonable by a court, the
Employee shall submit to the reduction of either the time or territory to
such an area or period as the court shall deem reasonable. In the event
the Employee violates this covenant, then the time limitation shall be
extended for a period of time equal to the pendency of such proceedings,
including appeals.
64. No Solicitation of Employees. During the course of employment with the
Company, the Employee shall come into contact and become familiar with the
Company's employees, their knowledge, skills, abilities, salaries,
commissions, draws, benefits, and
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other matters with respect to such employees, all of which information is
not generally known to the public, but has been developed, acquired or
compiled by the Company at its great effort and expense. Any solicitation,
luring away or hiring of such employees of the Company shall be highly
detrimental to the business of the Company and may cause serious loss of
business and great and irreparable harm. Consequently, the Employee
covenants and agrees that during the course of employment with the Company
and for a period of 1 year after the Employee's Termination Date, whether
voluntary or involuntary, the Employee shall not, directly or indirectly,
whether on behalf of the Employee or others, solicit, lure or hire away
any employees of the Company or assist or aid in any such activity.
65. Waivers. A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach
thereof. All rights, remedies, undertakings or obligations contained in
this Agreement shall be cumulative and none of them shall be in limitation
of any other right, remedy, undertaking or obligation of either party.
66. Severability. If any one or more provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
67. Injunction Relief. Damages may be an inadequate remedy in the event of an
intended, threatened or actual breach by the Employee of any of the
provisions of this Agreement. Any breach by the Employee may cause the
Company great and irreparable injury and damage. To the extent that such
injury and damage can be demonstrated to a court of competent
jurisdiction, the Company shall be entitled, without waiving any
additional rights or remedies otherwise available to the Company at law,
or in equity or by statute, to injunctive and other equitable relief in
the event of an intended, threatened, or actual breach by the Employee of
any said covenants.
68. Liability Coverage. The Company, and any related entity or successor
entities agrees to indemnify the Employee in accordance with the terms of
the Vista Bylaws. The Company also agrees to continue to provide any
existing officers and directors insurance and/or liability policies
covering the Employee through any Termination Date, and shall use its best
efforts to continue to maintain the policies in effect at the time of
termination or comparable policies covering the Employee for the
Employee's period of employment with the Company, and for a period of 3
years after the date of any termination. In no event shall the Employee
receive any lesser officers and directors protection, than is provided to
the current active Board of Directors.
69. Execution of Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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70. Entire Agreement. This Agreement contains the entire agreement between the
Employee and the Company with respect to the transactions contemplated
herein, and supersedes all previous written and oral negotiations,
commitments, and understandings. Its terms shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by
each of the parties hereto and making specific reference to this
Agreement.
71. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Employee, his or her heirs, executors, administrators, and
legal representations, and the Company, it successors and assigns.
72. Amendment. This Agreement may not be altered, changed, amended or
terminated except by written agreement signed by the Employee and the
Company.
73. Arbitration. Any controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration in accordance with the rules of
the American Arbitration Association. The arbitration award shall be final
and binding and judgement upon the award rendered in such arbitration may
be entered in any court having jurisdiction thereof.
74. Right to Withhold. The Company shall have the right to deduct from
payments due to the Employee under this Agreement, any and all Federal,
state or local taxes, if any, required by law to be withheld with respect
to such payments.
75. Written Notices. Any notice, request or other document to be given
hereunder by the Company to the Employee or by the Employee to the Company
shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid and addressed as follows:
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If to the Company:
Vista Bancorp, Inc.
305 Roseberry Street
Phillipsburg, New Jersey 08865
Attention: President
If to the Employee:
Marc S. Winkler
305 Roseberry Street
Phillipsburg, New Jersey 08865
76. Non-Defamation. During the course of the Employee's employment by the
Company, or any related entity or successor entities, or at any time
thereafter, the Employee shall not, directly or indirectly, in public or
private, deprecate, impugn or otherwise make any remarks that would tend
to or be construed to tend to defame the Company, or any related entity or
successor entities, or their reputations, nor shall the Employee assist
any other person, firm or company in so doing. The Company also agrees
that it will not, directly or indirectly, in public or private, deprecate,
impugn or otherwise make any remarks that would tend to or be construed to
tend to defame the Employee or the Employee's reputation, nor will the
Company assist any other person, firm or entities in engaging in such
activities.
77. References. After the termination of the Employee's employment with the
Company, or any related entity or successor entities, reference inquiries
from prospective employers shall be handled by only verifying the
Employee's dates of employment, last position held, and levels of
Compensation.
78. New Jersey Law. The Employee and the Company agree that this Agreement and
any interpretation thereof shall be governed by the laws of the State of
New Jersey.
79. Headings. The headings contained in this Agreement are for reference only.
In the event of a conflict between a heading and the context of any
Section, the context of the Section shall control.
WITNESS MARC S. WINKLER
- ------------------------------- ------------------------------------
WITNESS VISTA BANCORP, INC.
- ------------------------------- ------------------------------------
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SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") made as of the 28th day of
July, 1999 (the "Commencement Date") between Vista Bancorp, Inc., a corporation
duly organized under the laws of the State of New Jersey, with offices at 305
Roseberry Street, Phillipsburg, New Jersey 08865 ("Vista" or the Company"), and
William F. Keefe of 305 Roseberry Street, Phillipsburg, New Jersey 08865 (the
"Employee").
WHEREAS, the Employee has been a loyal and long-term employee of Vista or
a related entity for many years; and
WHEREAS, Vista wishes to provide the Employee with the comfort of knowing
that if the Employee loses his or her position with Vista, or any related
entities, as a result of any involuntary termination or upon a "change in
control", the Employee will be entitled to receive a severance benefit; and
WHEREAS, the Employee acknowledges that the Company does not maintain any
severance programs as defined under the Employee Retirement Income Security Act
of 1974 ("ERISA"), and that, prior to the Commencement Date, the Employee is not
entitled to any severance benefits upon a termination of employment.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following words and
phrases shall be defined as follows:
p. "Base Salary" shall mean the base salary which is payable on a
regular basis to the Employee, excluding bonuses and taxable fringe
benefits.
q. "Cause" shall include, but not be limited to, any false statement
that was intentionally or negligently made, contained in any
corporate records; the commission by the Employee of any crime or
fraud against the Company or its property, or any crime involving
moral turpitude or reasonably likely to bring discredit upon the
Company; and any violation of the Company's operating policies.
r. "Change in Control" shall mean: (i) the acquisition of ownership of
stock of the Company, by any person (including, without limitation,
a corporation, trust, partnership, joint venture, limited liability
company (a "Person") or by any group of Persons), whether directly,
indirectly, beneficially or of record, which acquisition, together
with stock held by such person or group, represents more than 50% of
the total voting power of all outstanding stock of the Company
(provided that no Change in Control shall occur under this
subparagraph (i) if the Person acquiring any additional stock
already possessed more than 50% of the
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total fair market voting power of the stock of the Company); (ii)
any merger or consolidation of the Company which the stockholders of
the Company before such merger or consolidation do not, as a result
of the merger or consolidation, own at least 50% of the merger or
consolidation; or (iii) any nomination and election of 50% or more
of all members of the Board of Directors of the Company that occurs
at any 3 consecutive meetings of the shareholders, whose election is
without the recommendation of the Board. "Change in Control" shall
not include the acquisition of the Company's stock by any Company
employee benefit plans or any actions by the members of the Board of
Directors, when acting as the Board of Directors.
s. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
t. "Termination Date" shall mean the last day the Employee performs any
services for Vista, or any related entity or successor entity, and
is paid wages as an employee, exclusive of vacation and severance
payments, and excluding any leave of absence periods.
80. Term. The term of the Agreement shall commence on the Commencement Date,
and shall continue on an uninterrupted basis until terminated with the
mutual consent of the Employee and Vista, or any related entity or
successor entity, or upon the voluntary termination of the Employee's
employment with Vista or any successor entity. Upon the Employee's
Termination Date, no additional services shall be required by the Employee
(unless provided otherwise under any consulting agreement), and any
payments due for the performance of any services, and reimbursement for
any expenses, shall be made within a period of 30 days from the
Termination Date.
81. Condition for Severance Benefits. In order to be entitled to any severance
benefits, the Employee agrees to execute a General Release that shall
fully release and forever discharge the company and the shareholders,
officers, employees and directors of the Company and any and all related
companies, from all claims or demands the Employee may have based on
employment with the Company. These claims shall include, but are not
limited to, claims arising under the Constitution of the United Sates, a
release of any rights or claims the Employee may have under the Age
Discrimination in Employment Act of 1967; Title VII of the Civil Right Act
of 1964; the Civil Rights Act of 1966; the Equal Pay Act; or any other
federal, state or local laws or regulations prohibiting employment
discrimination; the Employee Retirement Income Security Act of 1974;
Executive Orders 11246 and 11141; the Constitution of the State of New
Jersey or any other states in which the Employee resides or works; any New
Jersey or other state laws against discrimination; any claims of breach of
public policy of the State of New Jersey or other state, negligence,
breach of contract, wrongful discharge, constructive discharge, breach of
an implied covenant of good faith and fair dealings; any express or
implied
54
<PAGE>
contracts with the Company or any related companies; any federal or state
common law and any federal, state or local statutes, ordinances and
regulations.
The General Release shall be in a format prepared by the Company, which
shall be consistent with the above provisions and shall comply with the
Older Workers Benefit Protection Act of 1990 ("OWBPA"), including a 21 day
period to review the General Release, and an 7 day revocation period (or
any other periods required under any future laws). Any severance payments
shall be the Employee's exclusive right and remedy against the Company.
82. Severance Benefits. The Employee's employment may be terminated by the
Employee or by the Company or any related entity or successor entity
without "Cause", notice or liability at any time. Upon the occurrence of
any termination of employment, the following severance benefits shall be
provided, depending upon the specific circumstances of any termination:
g. Basic Severance Benefit. If the Company, or any related entity or
successor entity terminates the Employee's employment with the
Company for any reason, without "Cause", the Employee shall be
entitled to a Basic Severance Benefit equal to payment of the
Employee's Base Salary for a period of 12 months.
h. Change in Control Severance Benefit. If the Company, or any related
entity or successor entity terminates the Employee's employment in
anticipation of a reorganization or a "Change in Control", or if the
Company, or any related entity or any successor entity terminates
the Employee's employment following a Change in Control for any
other reasons without "Cause", or if the Employee's employment is
"constructively terminated" as defined in Section 8, the Employee
shall receive a payment equal to the Employee's Base Salary for a
period of 24 months.
All severance benefits shall be paid in accordance with the Company's
normal payroll practices or in a single lump sum payment, within the
discretion of the Company. However, the severance benefit shall not be
paid until after 8 days after receipt of an executed copy of a General
Release by the Company as provided in Section 3 and the return of all
property to the Company, as provided in Section 10. Severance benefits
shall also be reduced to the extent of any advance payments, for any
excess expense reimbursements, and for any amounts owed to the Company by
the Employee (other than normal personal residence, home equity and
similar loans).
In the event of the death of the Employee after the commencement of
entitlement to any severance benefit payable under Section 4, all benefits
shall be paid in a lump sum to the Employee's spouse, or if no spouse
exists, to the Employee's estate.
Notwithstanding any interpretation to the contrary, in no event shall the
Employee be
55
<PAGE>
entitled to both the Basic Severance Benefit and the Change in Control
Severance Benefit.
83. Benefits. Upon the occurrence of any termination of employment by the
Company, or any related entity or successor entity without "Cause", or
upon the occurrence of a "constructive termination" in accordance with
Section 8, the Employee shall be entitled to the following general
benefits.
bb. All salary and wages through the Termination Date shall be paid in
accordance with the Company's normal payroll procedures.
cc. All accrued vacation pay shall be included in the Employee's final
paycheck.
dd. The Employee shall be entitled to elect to receive continuation
health coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") after his Termination Date, which is the date
of the "qualifying event" under COBRA. The Company shall pay the
full cost of any COBRA coverage elected by the Employee, or any
member of the Employee's immediate family for a period of up to 18
months.
ee. All medical, group-term life insurance, long-term disability,
short-term disability, and other welfare benefits shall be
terminated in accordance with the provisions of all plans. The
Employee may be entitled to individual conversion privileges under
the various policies. The Company shall provide such information to
the Employee regarding all individual conversion rights.
ff. The Employee shall be entitled to a distribution of all benefits
under the Company retirement programs, including the Vista Pension
and Section 401(k) Plans, in accordance with the provisions of all
Plan documents. All severance benefits paid in the Plan Year in
which the Termination Date occurs (but not any subsequent Plan
Years) shall be treated as Compensation for purposes of Employee
Salary Reduction Contributions to the Section 401(k) Plan, if
permitted in accordance with the provisions of the Section 401(k)
Plan, unless the Employee directs otherwise. For purposes of all
other Company Contributions, all severance benefits shall be
considered as Compensation to the extent required under the Section
401(k) Plan.
gg. The Employee shall be entitled to exercise any vested Stock Options,
in accordance with the provisions of the 1998 Stock Compensation
Plan, and any individual Option Agreements.
hh. The Employee shall become vested in any unvested Stock Grants under
the ROE Plan.
ii. Any executive benefits shall terminate on the Termination Date.
56
<PAGE>
jj. The Employee shall be entitled to state unemployment benefits, in
accordance with the rules for the State of New Jersey.
Notwithstanding any provision to the contrary, except as provided in this
Agreement, the payment of any severance benefits shall not be treated as
extending any individual's employment for any employee benefit or
employment purposes.
84. Voluntary Termination, Retirement, Death and Disability. The Employee
shall not be entitled to any severance benefits in the event of any
voluntary termination of employment either before, or after, any Change in
Control or other corporate events, unless a "constructive termination"
shall occur, as defined in Section 8. Furthermore, notwithstanding any
provisions to the contrary, no severance benefits shall be payable in the
event the Employee becomes disabled, dies, or otherwise retires in
accordance with the normal policies of the Company.
85. Discharge for Cause. The Company, or any related entity or successor
entity may immediately terminate this Agreement and the Employee's
employment at any time for "Cause". Upon termination of this Agreement for
Cause, the Company shall have no further obligations to the Employee other
than to pay for services performed and reimbursement for expenses payable
as of the date of such termination, and to provide any benefits as legally
required under Section 4. However, the Employee shall have no right to the
payment of any Basic Severance or Change in Control Severance Benefits in
the event of a termination for "Cause".
86. Change in Control.
j. Upon the occurrence of a "Change in Control" of the Company,
including any affiliated or subsidiary companies, followed by the
involuntary termination of the Employee's employment within a period
of 1 year after such Change in Control, other than for "Cause",
retirement, death or disability, the Employee shall be entitled to
receive all severance benefits identified in Sections 4(b) and 5 of
this Agreement, and any other benefits to which the Employee is
entitled under any other Company programs. Upon the occurrence of a
Change in Control and a "Constructive Termination" of the Employee,
the Employee shall also have the right to voluntarily terminate the
Employee's employment at any time for a period of up to 1 year after
such Change in Control, and to receive the severance benefits
identified in Section 4(b) and 5. For purposes of this Agreement, a
"Constructive Termination" shall be deemed to occur as a result of
any reduction in the Employee's Base Salary determined as of the
date of the Change in Control; or the relocation of the Employee's
principal place of employment by more than 70 miles from its
location immediately prior to the Change in Control. Upon the
occurrence of any of these events, the Employee shall provide the
Company with not less than 14 days prior written notice of
resignation given within a reasonable
57
<PAGE>
period of time not to exceed 3 months after the occurrence of the
last event giving rise to said Constructive Termination. If the
Company in good faith disputes that the Employee is entitled to
terminate the Employee's employment due to a Constructive
Termination, it shall so inform the Employee in writing within 14
days of the written notice provided by the Employee. If disputed by
the Company, the parties shall promptly proceed to arbitration in
accordance with Section 21 of this Agreement. Pending resolution of
the dispute by arbitration, the Company shall continue to pay the
Employee's Base Salary and benefits. If it is ultimately determined
that the Employee did not have grounds for voluntarily terminating
the Employee's employment, the Employee shall return to the Company,
without interest, all cash compensation received by the Employee
subsequent to the day the Employee's employment was terminated.
k. Notwithstanding any provision to the contrary, in the event that:
i. The aggregate payments of benefits to be made or afforded to
the Employee under this Agreement (the "Termination Benefits")
would be deemed to include an "excess parachute payment" under
Section 280G of the Code or any successor thereto; and
ii. If such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is $1 less than
an amount equal to the total amount of any payments
permissible under Section 280G of the Code or any successor
thereto.
then the Termination Benefits to be paid to the Employee shall be so
reduced so as to be a Non-Triggering Amount. The allocation of the
reduction required hereby among the Termination Benefits provided by
the preceding paragraphs of this Section 8 shall be determined by
the Employee, with the consent of the Company.
l. Notwithstanding the foregoing provisions, if after the application
of Section 8(b) above, it is determined that the Employee received
an excess parachute payment despite the reduction in the Employee's
Termination Benefits, the excess of such Termination Benefits paid
to the Employee of 2.99 times the Employee's "base amount", as
defined in Section 280G of the Code, shall be treated as a loan to
the Employee and the Employee shall be required to repay such amount
to the Company, or the successor of the Company, within 5 years of
the date of such determination, with interest at the prime rate, as
set forth from time to time in the Wall Street Journal.
87. Trade Secrets, Confidential and/or Proprietary Information. The Employee
shall regard and preserve as confidential: (i) all trade secrets and/or
other proprietary and/or confidential information belonging to the
Company; and (ii) all trade secrets and/or other proprietary
58
<PAGE>
and/or confidential information belonging to a third party which have been
confidentially disclosed to the Company, which trade secrets and/or other
proprietary and/or confidential information described in (i) and (ii)
above (collectively, "Confidential Information") have been or may be
developed or obtained by or disclosed to the Employee by reason of the
Employee's relationship with the Company. The Employee shall not, without
written authority from the Company to do so, use for the Employee's own
benefit or purposes, or the benefit or purpose of any person or entity
other than the Company, nor disclose to others, either during the term of
this Agreement or thereafter, except as required in the course of
performance of services under this Agreement, any Confidential
Information. This provision shall not apply to the Employee's general
expertise and know-how, nor to Confidential Information that has been
voluntarily disclosed to the public by the Company, or otherwise entered
the public domain through lawful means. Confidential information shall
include, but not be limited to, all nonpublic information relating to the
Company's (i) business, research, development and marketing plans,
strategies and forecasts; (ii) business; (iii) products (whether existing,
in development, or being contemplated); (iv) customers' identities,
usages, and requirements; (v) reports; (vi) formulas; (vii)
specifications; (viii) designs, software and other technology; and (ix)
terms of contracts.
88. Return of Documents. Upon the termination of the Employee's employment,
the Employee shall return all media on which any Confidential Information
may be recorded or located, including, without limitation, documents,
program source codes, samples, models, blueprints, photocopies,
photographs, drawings, descriptions, reproductions, cards, tapes, discs
and other storage facilities (collectively "Documentation") made by the
Employee or that come into the Employee's possession by reason of the
Employee's relationship hereunder with the Company are the property of the
Company and shall be returned to the Company. The Employee shall not
deliver, reproduce, or in any way allow any Documentation to be delivered
or used by any third party without the written direction or consent of a
duly authorized representative of the Company.
89. Covenant Not to Compete. The Employee agrees that during the Employee's
association with the Company and for 1 year after the Employee's
Termination Date, the Employee shall not, directly or indirectly, through
any other person, firm, corporation or other entity, compete with the
Company, anywhere within a radius of 30 miles from 305 Roseberry Street,
Phillipsburg, New Jersey 08865, in the performance of banking services,
including the operation of branches for any competing entities within the
30 mile radius; or within 10 miles of any branches of the Company or any
related entity prior to any Change in Control. The Company and the
Employee agree that the Company's business is regional in scope and is
highly competitive. The Employee, therefore acknowledges that the scope of
this Non-Solicitation is reasonable, and applies in the context of any
voluntary or involuntary termination of employment. In the event that any
aspect of this covenant is deemed to be unreasonable by a court, the
Employee shall submit to the reduction of either the time or territory to
such an area or period as the court shall deem reasonable. In the event
the Employee violates this covenant, then the time limitation shall be
extended for a period of time equal to the pendency of such proceedings,
including appeals.
59
<PAGE>
90. No Solicitation of Employees. During the course of employment with the
Company, the Employee shall come into contact and become familiar with the
Company's employees, their knowledge, skills, abilities, salaries,
commissions, draws, benefits, and other matters with respect to such
employees, all of which information is not generally known to the public,
but has been developed, acquired or compiled by the Company at its great
effort and expense. Any solicitation, luring away or hiring of such
employees of the Company shall be highly detrimental to the business of
the Company and may cause serious loss of business and great and
irreparable harm. Consequently, the Employee covenants and agrees that
during the course of employment with the Company and for a period of 1
year after the Employee's Termination Date, whether voluntary or
involuntary, the Employee shall not, directly or indirectly, whether on
behalf of the Employee or others, solicit, lure or hire away any employees
of the Company or assist or aid in any such activity.
91. Waivers. A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach
thereof. All rights, remedies, undertakings or obligations contained in
this Agreement shall be cumulative and none of them shall be in limitation
of any other right, remedy, undertaking or obligation of either party.
92. Severability. If any one or more provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
93. Injunction Relief. Damages may be an inadequate remedy in the event of an
intended, threatened or actual breach by the Employee of any of the
provisions of this Agreement. Any breach by the Employee may cause the
Company great and irreparable injury and damage. To the extent that such
injury and damage can be demonstrated to a court of competent
jurisdiction, the Company shall be entitled, without waiving any
additional rights or remedies otherwise available to the Company at law,
or in equity or by statute, to injunctive and other equitable relief in
the event of an intended, threatened, or actual breach by the Employee of
any said covenants.
94. Liability Coverage. The Company, and any related entity or successor
entities agrees to indemnify the Employee in accordance with the terms of
the Vista Bylaws. The Company also agrees to continue to provide any
existing officers and directors insurance and/or liability policies
covering the Employee through any Termination Date, and shall use its best
efforts to continue to maintain the policies in effect at the time of
termination or comparable policies covering the Employee for the
Employee's period of employment with the Company, and for a period of 3
years after the date of any termination. In no event shall the Employee
receive any lesser officers and directors protection, than is provided to
the current active Board of Directors.
60
<PAGE>
95. Execution of Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
96. Entire Agreement. This Agreement contains the entire agreement between the
Employee and the Company with respect to the transactions contemplated
herein, and supersedes all previous written and oral negotiations,
commitments, and understandings. Its terms shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by
each of the parties hereto and making specific reference to this
Agreement.
97. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Employee, his or her heirs, executors, administrators, and
legal representations, and the Company, it successors and assigns.
98. Amendment. This Agreement may not be altered, changed, amended or
terminated except by written agreement signed by the Employee and the
Company.
99. Arbitration. Any controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration in accordance with the rules of
the American Arbitration Association. The arbitration award shall be final
and binding and judgement upon the award rendered in such arbitration may
be entered in any court having jurisdiction thereof.
100. Right to Withhold. The Company shall have the right to deduct from
payments due to the Employee under this Agreement, any and all Federal,
state or local taxes, if any, required by law to be withheld with respect
to such payments.
101. Written Notices. Any notice, request or other document to be given
hereunder by the Company to the Employee or by the Employee to the Company
shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid and addressed as follows:
61
<PAGE>
If to the Company:
Vista Bancorp, Inc.
305 Roseberry Street
Phillipsburg, New Jersey 08865
Attention: President
If to the Employee:
William F. Keefe
305 Roseberry Street
Phillipsburg, New Jersey 08865
102. Non-Defamation. During the course of the Employee's employment by the
Company, or any related entity or successor entities, or at any time
thereafter, the Employee shall not, directly or indirectly, in public or
private, deprecate, impugn or otherwise make any remarks that would tend
to or be construed to tend to defame the Company, or any related entity or
successor entities, or their reputations, nor shall the Employee assist
any other person, firm or company in so doing. The Company also agrees
that it will not, directly or indirectly, in public or private, deprecate,
impugn or otherwise make any remarks that would tend to or be construed to
tend to defame the Employee or the Employee's reputation, nor will the
Company assist any other person, firm or entities in engaging in such
activities.
103. References. After the termination of the Employee's employment with the
Company, or any related entity or successor entities, reference inquiries
from prospective employers shall be handled by only verifying the
Employee's dates of employment, last position held, and levels of
Compensation.
104. New Jersey Law. The Employee and the Company agree that this Agreement and
any interpretation thereof shall be governed by the laws of the State of
New Jersey.
105. Headings. The headings contained in this Agreement are for reference only.
In the event of a conflict between a heading and the context of any
Section, the context of the Section shall control.
WITNESS WILLIAM F. KEEFE
- ------------------------------- ------------------------------------
WITNESS VISTA BANCORP, INC.
- ------------------------------- ------------------------------------
62
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