Exhibit 10.3
June 12, 2009
Mr. Ronald E.
Schwarz
250 Oak Ridge Road
Oak Ridge, NJ 07438
Dear Mr. Schwarz,
Lakeland Bancorp, Inc. (the
“Company”) previously entered into a Securities
Purchase Agreement (the “Participation Agreement”),
with the United States Department of Treasury
(“Treasury”) in connection with the Company’s
participation in the Treasury’s TARP Capital Purchase Program
(the “CPP”). If the Company ceases at any time to
participate in the CPP, this letter shall be of no further force
and effect.
In connection with the
Company’s participation in the CPP and as a condition of the
Participation Agreement, the Company has established 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)
Recovery 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
