Center Bancorp, Inc. Executive Waiver Agreement
Center Bancorp,
Inc.
January
9, 2009
Dear
___________:
Center
Bancorp, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”), with the United States Department of
Treasury (“Treasury”) that provides for the Company’s participation in the
Treasury’s TARP Capital Purchase Program (the “CPP”). If the Company does not
participate or ceases at any time to participate in the CPP, this letter shall
be of no further force and effect.
For the
Company to participate in the CPP and as a condition to the closing of the
investment contemplated by the Participation Agreement, the Company is required
to establish specified standards for incentive compensation to its senior
executive officers and to make changes to its compensation arrangements. 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:
(1) No Golden Parachute
Payments. The Company is prohibiting any golden parachute
payment to you during any "CPP Covered Period". A "CPP Covered
Period" is any period during which (A) you are a senior executive officer and
(B) Treasury holds an equity or debt position acquired from the Company in the
CPP.
(2) Recover of Bonus and
Incentive Compensation. Any bonus and incentive compensation
paid to you during the CPP Covered Period is subject to recovery or "clawback"
by the Company if the payments were based on materially inaccurate financial
statements or any other materially inaccurate performance metric
criteria.
(3) Compensation Program
Amendments. Each of the Company's compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden
parachute, severance and employment agreements) (collectively, "Benefit Plans")
with respect to you is hereby amended to the extent necessary to give effect to
provisions (1) and (2). For reference, certain affected Benefit Plans
are set forth in Appendix A to this letter. 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 agree to negotiate
such changes promptly and in good faith.
(4) Definitions and
Interpretation. This letter shall be interpreted as
follows:
"Senior
executive officer" means the Company's "senior executive officers" as defined in
subsection 111(b)(3) of EESA.
"Golden
parachute payment" is used with same meaning as in subsection 111(b)(2)(C) of
EESA.
"EESA"
means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation issued that has been issued and in effect as of the
"Closing Date" as defined in the Participation Agreement.
The term
"Company" includes any entities treated as a single employer with the Company
under 31 C.F.R.§ 30.1(b) (as in effect on the Closing Date). You are
also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term "employer" in that waiver will be deemed
to mean the Company as used in this letter.
The term
"CPP Covered Period" shall be limited by, and interpreted in a manner consistent
with, 31 C.F.R. § 30.11 (as in effect on the Closing Date).
Provisions
(1) and (2) of this letter are intended to, and will be interpreted,
administered and construed to, comply with Section 111 of EESA and, to the
maximum extent consistent with the preceding, to permit operation of the Benefit
Plans in accordance with their terms before giving effect to this
letter.
(5) Miscellaneous. To the
extent not subject to federal law, this letter will be governed by and construed
in accordance with the laws of New Jersey. This letter may be executed in two or
more counterparts, each of which will be deemed to be an original. A signature
transmitted by facsimile will be deemed an original signature.
The Board
of Directors of the Company appreciates the concessions you are making and looks
forward to your continued leadership during these financially difficult
times.
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Yours
sincerely,
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CENTER
BANCORP, INC.
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By:
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| Name | |||
| Title | |||
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Intending
to be legally bound, I agree with and accept the foregoing terms on the
date set forth below.
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Date:
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January 9, 2009 |
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Appendix A to Executive
Waiver Agreement
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