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Exhibit
10.2
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN AGREEMENT
FOR THOMAS J.
SHARA
THIS AGREEMENT is made
effective as of April 2, 2008 (the “Effective
Date”), by and among Lakeland Bancorp, Inc., a New Jersey
corporation (the “Corporation”), Lakeland Bank, a New
Jersey state chartered bank (the “Bank” and,
collectively with the Corporation, the “Company”), and
Thomas J. Shara (the “Executive”), intending to be
legally bound hereby.
INTRODUCTION
The purpose of this Agreement
is to provide specified benefits to Thomas J. Shara, President and
Chief Executive Officer of the Corporation, in consideration of his
anticipated future contributions to the continued growth,
development and future business success of the Company.
AGREEMENT
Article 1
Definitions
1.1 Definitions .
Whenever used in this Agreement, the following words and phrases
shall have the meanings specified:
1.1.1
“Beneficiary” means the person designated in
writing by the Executive, pursuant to such forms provided by the
Company and as described herein, to serve as his beneficiary under
this Agreement in the event of his death.
1.1.2
“Board” means the Board of Directors of the
Corporation.
1.1.3 Termination for
“Cause” shall have the meaning set forth in the
Employment Agreement.
1.1.4 “Change in
Control” means a “Change in Control Event” as
defined in the Employment Agreement; provided ,
however , that no event or occurrence shall constitute a
Change in Control unless it also constitutes a “change in the
ownership of the Corporation,” a “change in the
effective control of the Corporation,” or a “change in
the ownership of a substantial portion of the Corporation’s
assets” (within the meaning of Section 409A(a)(2)(A)(v)
of the Code).
1.1.4
“Code” means the Internal Revenue Code of 1986,
as amended.
1.1.5
“Disability” shall have the meaning set forth in
the Employment Agreement.
1.1.6 “Early
Termination” means Termination of Employment before
Normal Retirement Age for reasons other than death, Termination for
Cause or following a Change in Control.
1.1.7 “Employment
Agreement” means that certain Employment Agreement, by
and among the Executive, the Corporation and the Bank, dated as of
the date hereof.
1.1.8 “Exchange
Act” means the Securities and Exchange Act of 1934, as
amended.
1.1.9 “Good
Reason” shall have the meaning set forth in the
Employment Agreement.
1.1.10 “Normal
Retirement Age” means the Executive’s 65
th
birthday.
1.1.11 “ Normal
Retirement Date ” means the later of the Normal
Retirement Age or Termination of Employment.
1.1.12 “ Plan
Year ” means the calendar year.
1.1.13 “Specified
Employee” means a key employee (as defined in
Section 416(i) of the Code without regard to paragraph 5
thereof) of the Corporation if any stock of the Corporation is
publicly traded on an established securities market or otherwise,
as determined by the plan administrator based on the twelve
(12) month period ending each December 31 (the
“identification period”). If the Executive is
determined to be a Specified Employee for an identification period,
the Executive shall be treated as a Specified Employee for purposes
of this Agreement during the twelve (12) month period that
begins on the first day of the fourth month following the close of
the identification period.
1.1.14 “Termination
of Employment” means the termination of the
Executive’s employment with the Company for reasons other
than death; provided , however , that a Termination
of Employment will not have occurred unless and until the
Executive ceases to provide services as an employee of the Company
at an annual rate that is less than twenty percent (20%) of
the services rendered by the Executive to the Company, on average,
during the immediately preceding three (3) full calendar years
of employment (or, if employed less than three (3) years, such
lesser period) and the annual remuneration for such services is
less than twenty percent (20%) of the average annual
remuneration earned during the final three (3) full calendar
years of employment (or, if less, such lesser period). The
Executive shall not be considered to have a Termination of
Employment if the Executive continues to provide services to the
Company in a capacity other than as an employee of the Company at
an annual rate that is fifty percent (50%) or more of the
services rendered by the Executive to the Company, on average,
during the immediately preceding three (3) full calendar years
of employment (of if employed less than three (3) years, such
lesser period) and the annual remuneration for such services is
fifty percent (50%) or more of the average annual remuneration
earned by the Executive from the Company during the final three
(3) full calendar years of employment (or if less, such lesser
period). The Executive’s employment relationship will be
treated as continuing intact
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while the Executive is on
military leave, sick leave or other bona fide leave of absence if
the period of such leave of absence does not exceed six
(6) months, or if longer, so long as the Executive’s
right to re-employment with the Company is provided either by
statute or by contract. If the period of leave exceeds six
(6) months and there is no right to re-employment, a
Termination of Employment will be deemed to have occurred as of the
first date immediately following such six (6) month
period.
Article 2
Living
Benefits
2.1 Normal Retirement
Benefit . The Company shall pay to the Executive the benefit
described in this Section 2.1 in lieu of any other benefit
under this Agreement (other than the death benefit under Sections
3.2 or 3.3) upon Termination of Employment on or after the Normal
Retirement Age for a reason other than due to the Executive’s
death.
2.1.1 Amount of
Benefit . The annual Normal Retirement Benefit under this
Section 2.1 is $150,000.00 (one hundred fifty thousand
dollars).
2.1.2 Payment of
Benefit . The Company shall pay the annual benefit to the
Executive in equal monthly installments of $12,500 each, payable on
or about the first day of the month following the Executive’s
Normal Retirement Date and continuing for the 179 consecutive
months that follow.
2.2 Early Termination
Benefit . If, prior to a Change in Control, the Executive
resigns his employment with the Company for Good Reason, the
Executive’s employment with the Company terminates due to
Disability, or the Executive’s employment with the Company is
terminated by the Company other than as a result of a Termination
for Cause, the Company shall, in lieu of any other benefit under
this Agreement (other than the death benefit under Sections 3.2 or
3.3), pay to the Executive the Normal Retirement Benefit set forth
in Section 2.1.1 in equal monthly installments of $12,500
each, payable on or about the first day of the month commencing
with the month following the Executive’s Normal Retirement
Age and continuing for the 179 consecutive months that
follow.
2.3 Change in Control
Benefit. If Executive is employed by the Company at the time of
a Change in Control, the Company shall, in lieu of any other
benefit under this Agreement (other than the death benefit under
Sections 3.2 or 3.3), pay to the Executive the Normal Retirement
Benefit set forth in Section 2.1.1 in equal monthly
installments of $12,500 each, payable on or about the first day of
the month commencing with the month following the Executive’s
Normal Retirement Age and continuing for the 179 consecutive months
that follow.
2.4 Restriction on Timing
of Distributions. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a
Specified Employee at Termination of Employment, if necessary to
comply with the restriction in Section 409A(a)(2)(B) of the
Code, any payment that would otherwise be due to the Executive
hereunder within six months after such Termination of Employment
shall nonetheless be delayed until the first business day of the
seventh month following Employee’s Termination of Employment
and the first such payment shall include the cumulative amount of
any payments that would have been paid prior to such date if not
for such restriction.
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Article 3
Death
Benefits
3.1 Death During Active
Service . If the Executive’s employment with the Company
terminates due to death, the Company shall, in lieu of the Living
Benefits of Article 2, pay to the Executive’s Beneficiary the
Normal Retirement Benefit set forth in Section 2.1.1 in 180
equal monthly installments of $12,500 each, payable on or about the
first day of each month commencing within 60 days of receipt by the
Company of the Executive’s death certificate.
3.2 Death During Benefit
Period . If the Executive dies after the benefit payments have
commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the
Executive’s Beneficiary at the same time and in the same
amounts they would have been paid to the Executive had the
Executive survived.
3.3 Death Following
Termination of Employment But Before Benefits Commence. If the
Executive is entitled to benefits under this Agreement, but dies
prior to receiving said benefits, the Company shall pay to the
Executive’s Beneficiary the same benefits, in the same
manner, they would have been paid to the Executive had the
Executive survived; however, said benefit payments will commence
within 60 days of receipt by the Company of the Executive’s
death certificate.
Article 4
Beneficiaries
4.1 Beneficiary
Designations . The Executive shall designate a Beneficiary
hereunder by filing a written designation with the Company. The
Executive may revoke or modify the designation at any time by
filing a new designation. However, designations will only be
effective if signed by the Executive and accepted by the Company
during the Executive’s lifetime. The Executive’s
designation shall be deemed automatically revoked if the
Beneficiary predeceases the Executive, or if the Executive names a
spouse as Beneficiary and the marriage is subsequently dissolved.
If the Executive dies without a valid beneficiary designation, the
Beneficiary shall be the Executive’s estate.
4.2 Facility of
Payment . If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the
disposition of his or her property, the Company may pay such
benefit to the guardian, legal representative or person having the
care or custody of such minor, incapacitated person or incapable
person. The Company may require proof of incapacity, minority or
guardianship, as it may deem appropriate prior to distribution of
the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.
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Article 5
General
Limitations
5.1 Excess Parachute
Payment. The amounts payable pursuant to this Agreement shall
be subject to the provisions of Section 5(c)(3) of the
Employment Agreement.
5.2 No Benefits
Payable . Notwithstanding any provision of this Agreement to
the contrary, the Company shall not pay any benefit under this
Agreement if (i) the Company terminates the Executive’s
employment as a result of a Termination for Cause, or (ii) the
Executive resigns his employment with the Company other than for
Good Reason prior to the earlier of Normal Retirement Age or a
Change in Control.
5.3 Removal.
Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement if the
Executive is subject to a final removal or prohibition order issued
by an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act
(“FDIA”).
5.4 Competition after
Termination of Employment . The Executive shall forfeit his
right to any furth
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