FORM OF
CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement” ) is made on and as of this 27th day
of November, 2007, by and between Parke Bancorp, Inc.
(“Company”), a corporation organized under the laws of
the state of New Jersey which serves as a bank holding Company,
with its principal office at 601 Delsea Drive, Sewell, New Jersey
08080, Parke Bank (“Bank”), a banking corporation
organized under the laws of the state of New Jersey, with its
principal office at 601 Delsea Drive, Sewell, New Jersey 08080, and
[Elizabeth Milavsky, Robert Kuehl, Paul Palmieri, and David
Middlebrook] (the “Executive”).
WHEREAS , the Executive
is, as of the date of this Agreement, employed by the Company and
the Bank, a wholly owned subsidiary of the Company, as Senior Vice
President (“Officer Position”); and
WHEREAS , the Board of
Directors of the Bank believes that the Executive has worked, and
will continue to work, diligently in his position in pursuing the
business objectives of the Bank to the direct benefit of the
Company and its shareholders;
WHEREAS , the Board
believes that, if the Company receives any proposal from a
third-party concerning a possible business combination with, or the
acquisition of equity securities of, the Company, it is imperative
that the Company and its Board be able to rely upon the Executive
to continue in his position with the Company and the Bank, and that
the Board be able to receive and rely upon his advice, if they
request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such
a proposal; and
WHEREAS , to achieve
that goal, and to retain the Executive’s services as an
executive employee of the Company and the Bank prior to and through
the occurrence of a Change in Control, as defined in this
Agreement, the Company, the Bank and the Executive have, with the
full support and concurrence of the Board of Directors of each of
the Company and the Bank, agreed to enter into this Agreement to
provide to the Executive certain benefits in the event that he is
terminated as an executive employee of the Company or the Bank in
conjunction with or after a Change in Control of the Company or the
Bank.
NOW THEREFORE , in
order to assure the Company and the Bank that they will have the
continued dedication of the Executive and the availability of his
ongoing advice and counsel notwithstanding the possibility, threat
or occurrence of a change in the control or ownership of the
Company or the Bank, and to induce the Executive to remain in the
employ of the Company and the Bank, the Company, the Bank and the
Executive, each intending to be legally bound hereby, agree as
follows:
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a.
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Cause . For purposes of this Agreement,
“Cause”, with respect to the termination by the
Employer of the Executive’s employment shall mean
(i) the willful and continued failure by the Executive to
perform his duties for the Employer under this Agreement after at
least one warning in writing from the Board of Directors of the
Employer identifying specifically any such failure; (ii) willful
misconduct of any type by the Executive, including, but not limited
to, the disclosure or improper use of confidential information
under Section 11 of this Agreement, which causes material injury to
the Company or any of its subsidiaries or affiliates, as specified
in a written notice to the Executive from the Board of Directors of
the Employer; or (iii) the Executive’s conviction of a
crime (other than a traffic violation), habitual drunkenness, drug
abuse, or excessive absenteeism, after a warning (with respect to
drunkenness or absenteeism only) in writing from the Board of
Directors of the Employer to refrain from such behavior. No act or
failure to act on the part of the Executive shall be considered to
have been willful for purposes of clause (i) or (ii) of this
Section 1(a) unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the action or
omission was in the best interest of the Company or any of its
subsidiaries or affiliates.
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b.
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Change in Control
. “Change in
Control” shall mean the occurrence of any of the following
events:
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i.
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The Company acquires actual knowledge that any
person, as such term is used in Sections 13(d) and 14(d)(2) of the
Securities and Exchange Act of 1934 (the “Exchange
Act”), other than an affiliate of the Company or an employee
benefit plan established or maintained by the Company or any of its
affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities
of COMPANY representing more than 19.9% of the combined voting
power of the Company’s then outstanding securities (a
“Control Person”); provided that no person shall be
considered a Control Person for purposes of this paragraph (i) if
such person acquires in excess of 19.9% of the combined voting
power of the Company’s then outstanding voting securities in
violation of law and, by order of a court of competent
jurisdiction, settlement or otherwise, subsequently disposes or is
required to dispose of all Company securities acquired in violation
of law.
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ii.
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Upon the first purchase of COMPANY’s common
stock pursuant to a tender or exchange offer (other than a tender
or exchange offer
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made by COMPANY or an employee benefit plan
established or maintained by COMPANY or any of its
affiliates).
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iii.
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Upon the approval by (a) COMPANY’s
shareholders or, (b) if and only if the Bank is the Employer of the
Executive for purposes of this Agreement, COMPANY as the sole
holder of all of the issued and outstanding common stock of the
Bank, of (A) a merger, combination, or consolidation of the COMPANY
or the Bank with or into another entity (other than a merger or
consolidation within the COMPANY corporate group, or a merger or
consolidation, the definitive agreement for which provides that at
least two-thirds of the directors of the surviving or resulting
entity immediately after the transaction are Continuing Directors
(as hereinafter defined) (a “Non-Control
Transaction”)), (B) a sale or disposition of all or
substantially all of the COMPANY’s or the Bank’s assets
or (C) a plan of liquidation or dissolution of the COMPANY or the
Bank (other than a plan of liquidation or dissolution of the Bank
under which the business of the Bank would continue to be operated
by COMPANY or a member of the COMPANY’s corporate
group).
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iv.
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If during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
board of directors of the COMPANY or the Bank, as the case may be,
(the “Continuing Directors”) cease for any reason to
constitute at least two-thirds thereof or, following a Non-Control
Transaction, two-thirds of the board of directors of the surviving
or resulting entity; provided that any individual whose election or
nomination for election as a member of the board of directors of
the COMPANY or the Bank, as the case may be, (or, following a
Non-Control Transaction, the board of directors of the surviving or
resulting entity) was approved by a vote of at least two-thirds of
the Continuing Directors then in office shall be considered a
Continuing Director.
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v.
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Upon a sale of (A) common stock of the COMPANY if
after such sale any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act) other than an employee benefit
plan established or maintained by the COMPANY or an affiliate of
the COMPANY, owns a majority of the COMPANY’s common stock or
(B) all or substantially all of the COMPANY’s assets (other
than in the ordinary course of business).
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vi.
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If and only if the Bank is the Employer of the
Executive, upon a sale of (A) common stock of the Bank if after
such sale any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) other than the COMPANY, an employee
benefit plan established or maintained by the COMPANY, or
any
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subsidiary or affiliate of the COMPANY, owns a
majority of the Bank’s common stock or (B) all or
substantially all of the Bank’s assets (other than in the
ordinary course of business).
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c.
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Contract Period . “Contract Period” shall
mean the period commencing on the day immediately preceding a
Change in Control and ending on the earlier of (i) the second
anniversary of the Change in Control, or (ii) the death of the
Executive.
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d.
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Employer . “Employer” shall mean
the Company and/or the Bank, whichever entity that shall employ the
Executive from time to time.
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e.
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Good Reason .
When used with reference to a voluntary termination by the
Executive of his employment with the Employer, “Good
Reason” shall mean any of the following, if taken without the
Executive’s express written consent:
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(1)
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a material diminution in the Executive’s base
compensation during the C ontract Period;
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(2)
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a material diminution in the
Executive’s authority, duties, or responsibilities during
the Contact
Period.
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(3)
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a material diminution
in the authority, duties, or responsibilities of the supervisor to
whom the Executive is required to report during the
Contract Period, including a requirement that
the Executive report to a corporate officer or employee instead
of reporting directly to the board of
directors of the Company;
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(4)
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a material diminution
in the budget over which the Executive retains
authority;
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(5)
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Any transfer by the
Employer during the Contract Period of the Executive to another
geographic location outside of New Jersey or a work
location more than 25 miles from
his office location immediately prior to a Change in
Control, except for required travel
on the Employer’s business to an extent
substantially consistent with the
Executive’s business travel obligations
immediately prior to such Change in
Control; or
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(6)
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any other action or
inaction that constitutes a material breach by the Employer of the
agreement under which the Executive provides
services.
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2.
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Employment . The Employer hereby agrees to
employ the Executive, and the Executive hereby accepts employment,
during the Contract Period upon the terms and conditions set forth
herein. The Company and the Bank may, in the exercise of their sole
discretion, transfer the Executive’s employment relationship
from the Bank to the Company, or from the Company to the Bank, in
which case the transferee employer shall be the Employer for all
purposes of this Agreement. The
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transfer of the Executive’s employment
relationship between the Bank and the Company shall not be deemed
to be either an actual or constructive termination of the Executive
or “Good Reason” for any purpose of this Agreement, and
the Executive’s employment shall be deemed to have continued
without interruption for all purposes of this Agreement.
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3.
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Job Position . During the Contract Period, the
Executive shall be employed in the Officer Position with the
Company and the Bank, or such other corporate or divisional profit
center as shall then be the principal successor to the business,
assets and properties of the Bank, with a comparable position title
and comparable professional job duties, responsibilities and
required experience and skill level as were in effect before the
Change in Control. The Executive shall devote his full time
professional effort and attention to the business of the Employer,
and shall not, during the Contract Period, be engaged in any other
business activity without the written consent of the
Employer.
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4.
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Cash Compensation
. The Employer shall
pay to the Executive compensation for his services during the
Contract Period as follows:
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a.
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Base Compensation
. The base compensation
shall be equal to not less than such annual compensation, including
both salary and bonus, as was paid to or accrued by, or for the
benefit of, the Executive in the twelve (12) months immediately
prior to the Change in Control. The annual salary portion of base
compensation shall be payable in installments in accordance with
the Employer’s usual payroll method. The bonus shall be
payable at the time and in the manner as to which the Employer paid
such bonuses prior to the Change in Control. Any increase in the
Executive’s annual compensation pursuant to paragraph 4(b)
below, or otherwise, shall automatically and permanently increase
the base compensation.
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b.
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Annual Increase . During the Contract Period, the
Board of Directors of the Employer shall review not less than
annually, the Executive’s compensation and shall award him or
her additional compensation to reflect the Executive’s
performance, the performance of the Employer and the Company
corporate group, and competitive compensation levels, all as
determined in the discretion of the Board of Directors of the
Employer.
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Additional compensation may take any form including
but not limited to increases in annual salary, incentive bonuses
and/or bonuses not tied to performance.
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5.
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Expenses and Fringe Benefits
. During the Contract
Period, the Executive shall be entitled to reimbursement for all
business expenses incurred by him with respect to the business of
the Employer in the same manner and to the same extent as such
expenses were previously reimbursed to him immediately prior to the
Change in Control. If prior to the Change in Control, the Executive
was entitled to the use of an automobile, he shall continue to be
entitled to the same use of an
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automobile at least comparable to the automobile
provided to him prior to the Change in Control, and he shall be
entitled to vacations and sick days, in accordance with the
practices and procedures of the Employer, as such existed
immediately prior to the Change in Control. During the Contract
Period, the Executive also shall be entitled to hospital, health,
medical and life insurance, and any other material benefits
enjoyed, from time to time, by executive officers of the Employer,
all upon terms as favorable as those enjoyed by other executive
officers of the Employer. Notwithstanding anything in this section
to the contrary, if the Employer adopts any change in the expenses
allowed to, or fringe benefits provided for, executive officers of
the Employer, and such policy is uniformly applied to all executive
officers of the Employer, and any successor or acquirer of the
Employer, if any, inclu
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