1st Constitution Bancorp Letterhead]
Exhibit
10.28
[1st
Constitution Bancorp Letterhead]
November
5, 2009
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1st Constitution
Bancorp
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Cranbury,
New Jersey 08512
Dear ▇▇.
▇▇▇▇▇▇▇:
As you
know, 1st Constitution
Bancorp (the “Company,” as further defined below) has entered into a Letter
Agreement, dated December 23, 2008, including the Securities Purchase Agreement
- Standard Terms incorporated therein (the “Participation Agreement”), with the
United States Department of the Treasury (“Treasury”) that provides for the
Company’s participation in the Treasury’s TARP Capital Purchase Program
(“CPP”).
Pursuant
to EESA as implemented by an interim final rule of the Treasury applicable to
the Company and its subsidiaries as a result of its participation in the CPP,
the Company is required to make changes to its compensation agreements for
highly compensated employees of the Company and its subsidiaries. To
comply with these requirements, and in consideration of the benefits that you
will receive as a result of the Company’s participation in the CPP, you agree as
follows:
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(1)
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No Golden Parachute
Payments. The Company is prohibited from making any
golden parachute payments to you during any “CPP Covered
Period.” A “CPP Covered Period” is any period during which (a)
you are a senior executive officer or a highly compensated employee of the
Company or its subsidiaries, and (b) the Treasury holds the Series B
Preferred Stock acquired from the Company in the
CPP.
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(2)
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Recovery of Bonus and
Incentive Compensation. Any bonus and/or incentive
compensation paid to you during a CPP Covered Period is subject to
recovery or “clawback” by the Company if the payments were based on
statements of earnings, revenues, gains or other criteria that are later
found to be materially inaccurate.
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(3)
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Tax Gross-up
Payments. During the CPP Covered Period, the Company is
prohibited from providing tax gross-ups or reimbursement for the payment
of your taxes to you. For this purpose, providing for such a
gross-up at a future date after the CPP Covered Period is also
prohibited.
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(4)
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Compensation Program
Amendments. Each of the Company’s compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including
but not limited to, golden parachute, severance and employment agreements)
(collectively, “Benefit Plans”) with respect to you is hereby amended
(notwithstanding any contrary language within such Benefit Plans) to the
extent necessary to give effect to provisions (1), (2) and
(3).
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In
addition, the Company is required to review its Benefit Plans to ensure that
they do not encourage senior executive officers to take unnecessary and
excessive risks that threaten the value of the Company. To the extent
any such review requires revisions to any Benefit Plan with respect to you, you
and the Company hereby agree to execute such additional documents as the Company
deems necessary to effect such revisions.
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(5)
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Definitions and
Interpretation. This letter shall be interpreted as
follows:
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“Senior
executive officer” means the Company’s “senior executive officers” as defined in
EESA as implemented by regulations and rules of the Treasury (i.e., the
principal executive officer, the principal financial officer and the next three
most highly compensated employees whose compensation exceeds
$100,000).
“Golden
parachute payment” has the same meaning set forth in EESA as implemented by
regulations and rules of the Treasury from time to time.
“EESA”
means the Emergency Economic Stabilization Act of 2008 as amended by the
American Recovery and Reinvestment Act of 2009 and as the same may be amended
hereafter.
The
“Company” includes 1st
Constitution Bancorp, 1st Constitution
Bank and any other entity required to be treated as a “TARP recipient” pursuant
to rules or regulations of the Treasury from time to time.
Provisions
(1), (2), (3) and (4) of this letter are intended to, and will be interpreted,
administered and construed to comply with EESA as implemented by regulations or
rules of the Treasury and, to the maximum extent consistent with the proceeding,
to permit operation of the Benefit Plans in accordance with their terms before
giving effect to this letter.
This
letter will be governed by the laws of the State of New Jersey, except to the
extent that federal law controls.
The
Company’s Board of Directors appreciates the concessions you are making and
looks forward to your continued leadership.
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Very
truly yours,
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1st
Constitution Bancorp
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title: President
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Intending
to be legally bound, I hereby
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agree
with, acknowledge the sufficiency
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of
consideration for, and accept the
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foregoing
terms.
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Date: November
7, 2009
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