-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wa0262df1igq0S3rfOqdGw90p3pldjmVvF/glV1itkQOsqcrvyyh54nrv538Byqc d1NU+gWQ3SSmKeIJ+kNYPg== 0000101320-98-000003.txt : 19980518 0000101320-98-000003.hdr.sgml : 19980518 ACCESSION NUMBER: 0000101320-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUMMIT BANCORP/NJ/ CENTRAL INDEX KEY: 0000101320 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 221903313 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06451 FILM NUMBER: 98623095 BUSINESS ADDRESS: STREET 1: 301 CARNEGIE CENTER STREET 2: P O BOX 2066 CITY: PRINCETON STATE: NJ ZIP: 08543-2066 BUSINESS PHONE: 6099873200 MAIL ADDRESS: STREET 1: PO BOX 2066 CITY: PRINCETON STATE: NJ ZIP: 08543-2066 FORMER COMPANY: FORMER CONFORMED NAME: UJB FINANCIAL CORP /NJ/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: UNITED JERSEY BANKS DATE OF NAME CHANGE: 19890815 10-Q 1 FORM 10-Q 3/31/98 =========================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 --------------------------------------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------- -------------------------- Commission File Number: 1-6451 -------------- SUMMIT BANCORP. ---------------------------------- (Exact name of registrant as specified in its charter) New Jersey 22-1903313 - ---------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 301 Carnegie Center, P.O. Box 2066, Princeton, New Jersey 08543-2066 - ---------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (609) 987-3200 - ---------------------------------------------------------------------------- (Registrant's telephone number, including area code) - ---------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No As of April 30, 1998 there were 177,528,405 shares of common stock, $.80 par value, outstanding. ============================================================================ SUMMIT BANCORP FORM 10-Q INDEX Page No. Part I Financial Information Item 1. Financial Statements Consolidated Balance Sheets - March 31, 1998, December 31, 1997 and March 31, 1997 2 Consolidated Statements of Income - Three Months Ended March 31, 1998 and 1997 3 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1998 and 1997 4 Consolidated Statements of Shareholders' Equity - Three Months Ended March 31, 1998 and 1997 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 20 Part II. Other Information. Item 1. Legal Proceedings 22 Item 2. Changes in Securities and Use of Proceeds 22 Item 3. Defaults Upon Senior Securities 23 Item 4. Submission of Matters to a Vote of Security Holders 23 Item 5. Other Information 24 Item 6. Exhibits and Reports on Form 8-K 24 Signature 25 Exhibit Index 26 Summit Bancorp and Subsidiaries Consolidated Balance Sheets Unaudited (In thousands)
March 31, December 31, March 31, 1998 1997 1997 ------------ ------------ ------------ Assets Cash and due from banks $ 1,242,254 $ 1,173,118 $ 1,034,857 Federal funds sold and securities purchased under agreements to resell 101,096 4,460 243,395 Interest-bearing deposits with banks 6,852 14,072 13,457 Securities: Trading account securities 26,913 35,216 33,806 Securities available for sale 5,375,723 5,074,896 3,366,770 Securities held to maturity 3,898,724 4,157,543 5,196,227 ------------ ------------ ------------ Total securities 9,301,360 9,267,655 8,596,803 ------------ ------------ ------------ Loans (net of unearned discount): Commercial 6,440,091 6,253,740 5,617,522 Commercial mortgage 2,809,233 2,703,793 2,797,531 Residential mortgage 5,770,620 5,671,200 6,025,610 Consumer 4,251,983 4,259,633 3,935,491 ------------ ------------ ------------ Total loans 19,271,927 18,888,366 18,376,154 Less: Allowance for loan losses 301,264 296,494 290,471 ------------ ------------ ------------ Net loans 18,970,663 18,591,872 18,085,683 Premises and equipment 244,406 244,913 242,459 Goodwill and other intangibles 183,897 188,620 184,039 Accrued interest receivable 179,685 175,170 170,609 Due from customers on acceptances 16,511 15,814 17,915 Other assets 307,966 288,478 318,633 ------------ ------------ ------------ Total Assets $ 30,554,690 $ 29,964,172 $ 28,907,850 ============ ============ ============ Liabilities and Shareholders' Equity Deposits: Non-interest bearing demand deposits $ 4,680,917 $ 4,530,690 $ 4,324,714 Interest-bearing deposits: Savings and time deposits 16,681,913 16,914,485 17,166,431 Commercial certificates of deposits $100,000 and over 852,795 884,261 839,437 ------------ ------------ ------------ Total deposits 22,215,625 22,329,436 22,330,582 Other borrowed funds 3,629,944 3,397,953 2,948,117 Accrued expenses and other liabilities 324,949 290,197 301,980 Accrued interest payable 77,702 71,602 75,497 Bank acceptances outstanding 16,511 15,814 17,915 Long-term debt 1,588,592 1,246,750 835,744 ------------ ------------ ------------ Total liabilities 27,853,323 27,351,752 26,509,835 ------------ ------------ ------------ Shareholders' equity: Common stock par value $ .80: Authorized 390,000 shares; issued and outstanding 177,528 at March 31, 1998; 176,590 at December 31, 1997 and 174,906 at March 31, 1997 142,022 141,272 139,925 Surplus 1,010,444 987,281 959,255 Retained earnings 1,531,659 1,467,193 1,314,548 Employee stock ownership plan obligation (3,932) (4,201) (5,008) Accumulated other comprehensive income, net of tax 21,174 20,875 (10,705) ------------ ------------ ------------ Total shareholders' equity 2,701,367 2,612,420 2,398,015 ------------ ------------ ------------ Total Liabilities and Shareholders' Equity$ 30,554,690 $ 29,964,172 $ 28,907,850 ============ ============ ============ See accompanying Notes to Consolidated Financial Statements.
2 Summit Bancorp and Subsidiaries Consolidated Statements of Income Unaudited (In thousands, except per share data)
Three Months Ended March 31, ------------------------ 1998 1997 ----------- ----------- Interest Income Loans $ 380,309 $ 365,230 Securities: Trading account securities 554 373 Securities available for sale 85,022 49,250 Securities held to maturity 62,606 85,035 ----------- ----------- Total securities 148,182 134,658 Federal funds sold and securities purchased under agreements to resell 407 1,253 Deposits with banks 431 173 ----------- ----------- Total interest income 529,329 501,314 ----------- ----------- Interest Expense Savings and time deposits 156,868 157,260 Commercial certificates of deposit $100,000 and over 12,257 11,054 Borrowed funds, including long-term debt 71,046 52,985 ----------- ----------- Total interest expense 240,171 221,299 ----------- ----------- Net interest income 289,158 280,015 Provision for loan losses 15,000 15,510 ----------- ----------- Net interest income after provision for loan losses 274,158 264,505 ----------- ----------- Non-Interest Income Service charges on deposit accounts 30,284 28,233 Service and loan fee income 12,914 11,335 Trust and investment services income 13,444 11,328 Securities gains 1,426 1,431 Other 19,843 17,073 ----------- ----------- Total non-interest income 77,911 69,400 ----------- ----------- Non-Interest Expenses Salaries 76,493 70,559 Pension and other employee benefits 26,618 25,120 Furniture and equipment 20,367 18,259 Occupancy, net 18,500 18,431 Communications 9,532 8,765 Merger-related charges - 26,500 Other 38,534 39,308 ----------- ----------- Total non-interest expenses 190,044 206,942 ----------- ----------- Income before income taxes 162,025 126,963 Federal and state income taxes 49,608 44,481 ----------- ----------- Net Income $ 112,417 $ 82,482 =========== =========== Net Income per Common Share: Basic $ 0.64 $ 0.47 =========== =========== Diluted 0.63 0.47 =========== =========== Average Common Shares Outstanding: Basic 176,933 174,377 =========== =========== Diluted 179,251 176,706 =========== ===========
[FN] See accompanying Notes to Consolidated Financial Statements. 3 Summit Bancorp and Subsidiaries Consolidated Statements of Cash Flows Unaudited (In thousands)
Three Months Ended March 31, -------------------------- Operating activities 1998 1997 ----------- ----------- Net income $ 112,417 $ 82,482 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses and other real estate owned 15,120 15,923 Depreciation, amortization and accretion, net 17,811 25,311 Merger-related charges - 26,500 Gains on sales of securities (1,426) (1,431) Gains on sales of mortgages held for sale (2,315) (1,715) Gains on sales of other real estate owned (1,949) (673) Proceeds from sales of other real estate owned 6,445 5,190 Proceeds from sales of mortgages held for sale 143,703 107,949 Originations of mortgages held for sale (198,210) (81,135) Net decrease (increase) in trading account securities 8,303 (7,371) Net increase in accrued interest receivable and other assets (27,033) (5,465) Net increase in accrued interest payable, accrued expenses and other liabilities 41,307 14,042 ----------- ----------- Net cash provided by operating activities 114,173 179,607 ----------- ----------- Investing activities Purchases of securities held to maturity (266,619) (75,503) Purchases of securities available for sale (952,693) (726,778) Proceeds from maturities of securities held to maturity 510,588 181,264 Proceeds from maturities of securities available for sale 483,576 208,958 Proceeds from sales of securities available for sale 184,266 264,882 Net increase in Federal funds sold, securities purchased under agreements to resell and interest-bearing deposits with banks (89,416) (68,690) Net increase in loans (338,957) (277,807) Purchases of premises and equipment, net (12,214) (2,345) ----------- ----------- Net cash used in investing activities (481,469) (496,019) ----------- ----------- Financing activities Net decrease in deposits (113,811) (149,419) Net increase in short-term borrowings 231,991 16,044 Principal payments on long-term debt (164,487) (26,226) Proceeds from issuance of long-term debt 506,535 154,500 Dividends paid (47,709) (38,952) Proceeds from issuance of common stock under dividend reinvestment and other stock plans 23,913 11,519 ----------- ----------- Net cash provided by (used in) financing activities 436,432 (32,534) ----------- ----------- Increase (decrease) in cash and due from banks 69,136 (348,946) Beginning cash balance of acquired entities - 56,296 Cash and due from banks at beginning of period 1,173,118 1,327,507 ----------- ----------- Cash and due from banks at end of period $ 1,242,254 $ 1,034,857 =========== =========== Supplemental disclosure of cash flow information Cash paid: Interest payments $ 234,071 $ 206,091 Income tax payments 915 17,381 Noncash investing activities: Net transfer of securities from held to maturity to available for sale resulting from acquisitions - 91,787 Net transfer of loans to other real estate owned 1,711 3,719 See accompanying Notes to Consolidated Financial Statements.
4 Summit Bancorp and Subsidiaries Consolidated Statements of Shareholders' Equity Unaudited (In thousands)
Accum. Other Total Common Retained ESOP Comprehensive Shareholders' Stock Surplus Earnings Obligation Income Equity ------------------------------------------------------------------------- Balance, December 31, 1996 $ 134,637 $ 918,411 $1,237,892 $(5,816) $ 5,714 $ 2,290,838 Adjustment for the pooling of a company with a different fiscal year end (158) (4,771) 9,288 539 1,832 6,730 ------------------------------------------------------------------------- Adjusted beginning balance 134,479 913,640 1,247,180 (5,277) 7,546 2,297,568 Balances at beginning of period of immaterial pooled acquisition (6,047 shares) 4,837 34,705 25,562 - (278) 64,826 Comprehensive income: Net income - - 82,482 - - 82,482 Unrealized loss on securities available for sale, net of tax - - - - (17,973) (17,973) --------------- Total comprehensive income 64,509 Cash dividend declared on common stock - - (40,676) - - (40,676) Common stock issued: Dividend reinvestment and other stock plans (155 shares) 124 4,554 - - - 4,678 Exercise of stock options, net (605 shares) 485 6,356 - - - 6,841 ESOP Debt Repayment - - - 269 - 269 ------------------------------------------------------------------------- Balance, March 31, 1997 $ 139,925 $ 959,255 $1,314,548 $(5,008) $ (10,705) $ 2,398,015 ========== =========== =========== ======== =========== =============== Balance, December 31, 1997 $ 141,272 $ 987,281 $1,467,193 $(4,201) $ 20,875 $ 2,612,420 Comprehensive income: Net income - - 112,417 - - 112,417 Unrealized gain on securities available for sale, net of tax - - - - 299 299 --------------- Total comprehensive income 112,716 Cash dividends declared on common stock - - (47,951) - - (47,951) Common stock issued: Dividend reinvestment and other stock plans (328 shares) 262 16,161 - - - 16,423 Exercise of stock options, net (610 shares) 488 7,002 - - - 7,490 ESOP Debt repayment - - - 269 - 269 ------------------------------------------------------------------------- Balance, March 31, 1998 $ 142,022 $ 1,010,444 $1,531,659 $(3,932) $ 21,174 $ 2,701,367 ========== =========== =========== ======== =========== =============== See accompanying Notes to Consolidated Financial Statements.
5 Summit Bancorp and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) 1.) Basis of Presentation The accompanying financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly the consolidated financial position of Summit Bancorp and subsidiaries (the "Company"), the consolidated results of operations, changes in shareholders' equity and changes in cash flows. All significant intercompany accounts and transactions have been eliminated in consolidation. In all material respects, the financial statements presented comply with the current reporting requirements of supervisory authorities. Certain prior period amounts have been reclassified to conform to the financial statement presentation of 1998. For additional information and disclosures required under generally accepted accounting principles, reference is made to the Company's 1997 Annual Report on Form 10-K. Prior period financial statements have been restated to include the accounts and results of operations for all material acquisitions accounted for as pooling-of-interests combinations. On August 20, 1997, the Board of Directors of the Company ("Board") approved a three-for-two common stock split payable on September 24, 1997. All share data has been retroactively adjusted to reflect the common stock split. The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," on January 1, 1998. The Statement defines total comprehensive income as all changes in equity during a period from transactions and other events and circumstances from nonowner sources. Other comprehensive income includes revenues, expenses, gains and losses that, under generally accepted accounting principles are included in comprehensive income but excluded from net income. The Company's other comprehensive income is generally comprised of unrealized gains and losses on securities available for sale. Disclosure of comprehensive income for the 1998 and 1997 periods is presented in the accompanying Consolidated Statements of Shareholders' Equity. 2.) Acquisitions and Restructuring Charges On August 1, 1997, the Company completed the acquisition of Collective Bancorp, Inc. ("Collective"). This acquisition was accounted for as a pooling of interests and all financial information, prior to the acquisition date, has been restated to reflect the combined financial information. Merger-related charges of $56.5 million ($37.1 million after tax) were recorded at the time of the acquisition. On March 1, 1997, the Company completed the acquisition of B.M.J. Financial Corp. ("BMJ"). This acquisition was accounted for as a pooling of interests, and was recorded as an adjustment to shareholders' equity as of January 1, 1997, without restating the 6 consolidated financial statements for 1996 and prior years. Merger-related charges of $26.5 million ($16.7 million after tax) were recorded at the time of the acquisition. On December 12, 1997 the Company acquired Corporate Dynamics, an employee benefits consulting firm, and Philadelphia Benefits Corp., a group health insurance agency, with the issuance of 495,000 shares of common stock. These acquisitions were accounted for as purchases, and Corporate Dynamics' and Philadelphia Benefits Corp.'s results of operations have been included since acquisition date. 3.) Net Income per Common Share The Company calculates net income per common share in accordance with SFAS No. 128, "Earnings per Share." Basic net income per common share is calculated by dividing net income by the weighted average common shares outstanding during the period. Diluted net income per common share is computed similar to that of basic net income per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally stock options, were issued during the reporting period.
(In thousands, except per share data) - -------------------------------------------------------------------------- Three months ended March 31, 1998 1997 - -------------------------------------------------------------------------- Net Income $112,417 $82,482 ========================================================================== Basic weighted-average common shares outstanding 176,933 174,377 Plus: Common stock equivalents 2,318 2,329 - ------------------------------------------------------------------------- Diluted weighted-average common shares outstanding 179,251 176,706 Net income per common share: Basic $0.64 $0.47 Diluted 0.63 0.47 - -------------------------------------------------------------------------
4.) Recent Accounting Pronouncements In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related information." SFAS No. 131 establishes standards and disclosure requirements for the way companies report information about operating segments, including related product information. Operating segments are defined based upon the way management organizes segments for making operations decisions and evaluating performance. Information such as segment net earnings, appropriate revenues and expense items and certain balance sheet items are required to be presented, and such amounts are required to be reconciled to the Company's combined financial information. SFAS No. 131 is effective for financial statements issued for annual periods ending after December 15, 1998, and interim periods beginning in 1999. The Company will adopt SFAS No. 131 as required, at December 31, 1998. 7 In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures About Pensions and Other Postretirement Benefits." This Statement standardizes the disclosure requirements for pension and other postretirement benefits by requiring additional information that will facilitate financial analysis, and eliminating certain disclosures that are considered no longer useful. SFAS No. 132 supersedes the disclosure requirements in SFAS Nos. 87, 88 and 106. This Statement is effective for fiscal years beginning after December 15, 1997. Restatement of disclosure for comparative purposes is required unless the information is not readily available. SFAS No. 132 will be adopted as required, at December 31, 1998. 5.) Subsequent Events On April 15, 1998 the Board approved an 11.1 percent increase in the quarterly cash dividend on the Company's stock from $0.27 to $0.30 per common share. The dividend is payable on August 3, 1998, to shareholders of record July 9, 1998. The Board also authorized the repurchase from time to time of up to five percent of the Company's outstanding common stock. This action is designed to help the Company to continue to effectively manage its capital. The Company commenced purchases under its repurchase program at the end of April 1998. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF - ----------------------------------------------- FINANCIAL CONDITION AND RESULTS OF OPERATIONS. ---------------------------------------------- Summit Bancorp is a bank holding company located in Princeton, New Jersey. The Company owns two bank subsidiaries and several active non-bank subsidiaries. The Company's bank subsidiaries provide a broad range of retail, commercial and private banking services as well as trust and investment services through a line of business approach to individuals, businesses, not-for-profit organizations, government entities and other financial institutions. These services are provided through an extensive branch network, including supermarket branches and private banking facilities, as well as through automated teller machines and personal computers. FINANCIAL CONDITION Total assets at March 31, 1998, were $30.6 billion, an increase of $590.5 million or 2.0 percent from year-end 1997, which can generally be attributed to an increase in the loan portfolio. Securities held to maturity at March 31, 1998, were $3.9 billion and were mainly comprised of $2.8 billion of U.S. Government and Federal agency securities, $175.6 million of state and political subdivision securities and $890.7 million of other securities, predominately corporate collateralized mortgage obligations ("CMOs"). These securities decreased $258.8 million or 6.2 percent from year-end 1997. This decrease primarily resulted from $510.6 million of maturities, including principal repayments on CMOs. This decrease was partially offset by $266.6 million in purchases. At March 31, 1998, the aggregate market value of the held to maturity portfolio was $3.9 billion. The aggregate market value at December 31, 1997, was $4.2 billion. At March 31, 1998, securities available for sale amounted to $5.4 billion and were predominately comprised of U.S. Government and Federal agency securities. These securities increased $300.8 million or 5.9 percent from year-end 1997 primarily as cash flows from securities held to maturity were reinvested in securities available for sale. For the first three months of 1998, $952.7 million of securities available for sale were purchased, partially offset by maturities of $483.6 million and sales of $182.8 million. At March 31,1998, total loans amounted to $19.3 billion and increased $383.6 million or 2.0 percent from year-end 1997. Commercial loans increased $186.4 million or 3.0 percent as compared to December 31,1997. The increase in commercial loans was primarily related to growth in real estate, large corporate and asset based lending. Commercial mortgage loans increased $105.4 million or 3.9 percent, and residential mortgage loans increased $99.4 million or 1.8 percent from December 31, 1997. During the quarter, deposits continued to be impacted by the investors desire for higher-yielding investment alternatives such as mutual funds, annuities and the stock market. Total deposits were $22.2 billion at March 31, 1998, a decrease of $113.8 million 9 or 0.5 percent from December 31, 1997. Demand deposits increased $150.2 million or 3.3 percent from year-end 1997 to $4.7 billion. Savings and time deposits at $16.7 billion decreased $232.6 million or 1.4 percent from December 31, 1997. Commercial certificates of deposit $100,000 and over were $852.8 million, representing a decrease of $31.5 million or 3.6 percent compared to December 31, 1997. Other borrowed funds at March 31, 1998, increased $232.0 million or 6.8 percent from December 31, 1997, to $3.6 billion. The increase in borrowed funds can be attributed to increases in short-term Federal Home Loan Bank advances and Federal funds purchased, partially offset by a decrease in short-term repurchase agreements. Long-term debt at March 31, 1998, increased $341.8 million, or 27.4 percent from December 31, 1997 to $1.6 billion. The increase in long-term debt was principally the result of the increase in long-term repurchase agreements of $425.0 million, partially offset by a $82.4 million decrease in long-term borrowings from the Federal Home Loan Bank. The increases in borrowings were generally used to fund the growth in the loan portfolio and to replace the reduction in deposits. Included in long-term debt at each of the periods presented, is $150.0 million of 8.40 percent pass-through securities. These securities qualify for Tier I Capital. Total shareholders' equity increased $88.9 million or 3.4 percent from December 31, 1997, to $2.7 billion. Included in stockholders' equity at March 31, 1998, was accumulated other comprehensive income, net of tax, amounting to $21.2 million, compared to $20.9 million at year-end 1997. Comprehensive income is comprised principally of unrealized gains on the available for sale portfolio. The Company's capital ratios for March 31, 1998, as compared to select prior periods and regulatory requirements, are shown in the following table. The Company's bank subsidiaries also met the well capitalized requirements for each of the periods presented.
- -------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, Minimum Required Well Selected Capital Ratios: 1998 1997 1997 Capital Capitalized - --------------------------------------------------------------------------------- Equity to assets 8.84% 8.72% 8.30% - - Leverage ratio 8.88 8.76 8.41 3.00% 5.00% Tier I capital 12.63 12.64 12.41 4.00 6.00 Total risk-based capital 14.78 14.83 14.84 8.00 10.00 - ---------------------------------------------------------------------------------
10 Non-Performing Assets Non-performing assets include non-performing loans and other real estate owned ("OREO") and are shown in the following table as of the dates indicated.
- --------------------------------------------------------------------------- Non-Performing Assets (In thousands) Mar. 31, Dec. 31 Mar. 31 1998 1997 1997 - --------------------------------------------------------------------------- Non-performing loans: Commercial and industrial $39,934 $42,644 $ 49,024 Construction and development 3,397 4,453 28,252 Commercial mortgage 32,552 37,993 48,307 - --------------------------------------------------------------------------- Non-performing loans 75,883 85,090 125,583 OREO, net 11,329 14,249 27,596 - --------------------------------------------------------------------------- Non-performing assets $87,212 $99,339 $153,179 Loans, not included above, past due 90 days or more (1) $58,494 $48,609 $74,807 - --------------------------------------------------------------------------- Non-performing loans to total loans 0.39% 0.45% 0.68% Non-performing assets to total loans and OREO 0.45 0.53 0.83 - ---------------------------------------------------------------------------
[FN] (1) Primarily residential mortgage and consumer loans, well secured and in the process of collection. The average balance of non-performing loans for the three months ended March 31, 1998, was $81.4 million. Interest income received on non-performing loans amounted to $0.6 million for the three months ended March 31, 1998. Allowance for Loan Losses A standardized process has been established to assess the adequacy of the allowance for loan losses and to identify the risks inherent in the loan portfolio. This process incorporates credit reviews and gives consideration to areas of exposure such as concentrations of credit, economic and industry conditions, trends in delinquencies and collections, collateral coverage, and the composition of the performing and non-performing loan portfolios. The allowance for loan losses is maintained at a level that management believes to be adequate to absorb anticipated loan losses. The unallocated portion of the allowance for loan losses, in excess of specific and general reserves, was $175.7 million at March 31, 1998, compared to $166.8 million at December 31, 1997. 11 Transactions in the allowance for loan losses for the three months ended March 31, 1998 and 1997 and selected loan loss ratios for the dates indicated are shown in the following tables:
- ------------------------------------------------------------------------- Allowance for Loan Losses (In thousands) 1998 1997 - ------------------------------------------------------------------------- Balance, beginning of period $ 296,494 $ 280,611 Acquisition adjustments, net - 9,994 Provision charged to operating expenses 15,000 15,510 - ------------------------------------------------------------------------- 311,494 306,115 - ------------------------------------------------------------------------- Loans charged off: Commercial and industrial 8,666 8,134 Construction and development 356 724 Commercial mortgage 260 4,276 Residential mortgage 319 1,034 Consumer 9,332 7,490 - ------------------------------------------------------------------------- Total loans charged off 18,933 21,658 - ------------------------------------------------------------------------- Recoveries: Commercial and industrial 4,649 2,626 Construction and development 1,798 183 Commercial mortgage 287 753 Residential mortgage 274 492 Consumer 1,695 1,960 - ------------------------------------------------------------------------- Total recoveries 8,703 6,014 - ------------------------------------------------------------------------- Net charge offs 10,230 15,644 - ------------------------------------------------------------------------- Balance, end of period $ 301,264 $ 290,471 =========================================================================
- ------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 1998 1997 1997 - ------------------------------------------------------------------------- Net charge offs to average loans: Quarter-to-date 0.22% 0.25% 0.35% Year-to-date 0.22 0.29 0.35 Allowance for loan losses to: Total loans 1.56 1.57 1.58 Non-performing loans 397.01 348.45 231.30 Non-performing assets 345.44 298.47 189.63 - -------------------------------------------------------------------------
12 Summit Bancorp and Subsidiaries Consolidated Average Balance Sheets with Resultant Interest and Rates Unaudited (Tax-equivalent basis, dollars in thousands)
Three Months Ended March 31, ---------------------------- 1998 1997 -------------------------------- ----------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ----------------------------- ----------------------------- Assets Interest-earning-assets: Federal funds sold and securities purchased under agreements to resell $ 29,187 $ 407 5.66 % $ 105,100 $ 1,253 4.84 % Interest-bearing deposits with banks 27,065 431 6.46 12,485 173 5.62 Securities: Trading account securities 33,123 582 7.13 32,146 374 4.72 Securities available for sale 5,365,951 85,643 6.38 3,177,151 49,739 6.26 Securities held to maturity 3,969,789 63,911 6.44 5,341,922 86,753 6.50 ----------- --------- ------ ----------- --------- ------ Total securities 9,368,863 150,136 6.41 8,551,219 136,866 6.40 ----------- --------- ------ ----------- --------- ------ Loans: Commercial 6,196,306 128,546 8.41 5,418,387 113,339 8.48 Commercial mortgage 2,769,941 59,136 8.54 2,800,389 60,446 8.63 Residential mortgage 5,722,445 104,786 7.32 6,048,907 112,307 7.43 Consumer 4,268,694 89,067 8.46 3,861,689 80,499 8.45 ----------- --------- ------ ----------- --------- ------ Total loans 18,957,386 381,535 8.16 18,129,372 366,591 8.20 ----------- --------- ------ ----------- --------- ------ Total interest-earning assets 28,382,501 532,509 7.61 26,798,176 504,883 7.64 ----------- --------- ------ ----------- --------- ------ Non-interest earning assets: Cash and due from banks 1,029,500 1,129,914 Allowance for loan losses (302,071) (295,794) Other assets 946,746 904,934 ----------- ----------- Total non-interest earning assets 1,674,175 1,739,054 ----------- ----------- Total Assets $30,056,676 $28,537,230 =========== =========== Liabilities and Shareholders' Equity Interest-bearing liabilities: Savings deposits $ 9,538,374 61,552 2.62 $ 9,638,361 62,090 2.61 Time deposits 7,257,262 95,316 5.33 7,510,008 95,170 5.14 Commercial certificates of deposit $100,000 and over 917,949 12,257 5.42 850,774 11,054 5.27 ----------- --------- ------ ----------- --------- ------ Total interest-bearing deposits 17,713,585 169,125 3.87 17,999,143 168,314 3.79 ----------- --------- ------ ----------- --------- ------ Other borrowed funds 3,485,830 46,788 5.44 3,051,263 41,086 5.46 Long-term debt 1,517,256 24,258 6.40 715,438 11,899 6.65 ----------- --------- ------ ----------- --------- ------ Total interest-bearing liabilities 22,716,671 240,171 4.29 21,765,844 221,299 4.12 ----------- --------- ------ ----------- --------- ------ Non-interest bearing liabilities: Demand deposits 4,292,821 4,040,039 Other liabilities 373,417 333,922 ----------- ----------- Total non-interest bearing liabilities 4,666,238 4,373,961 Shareholders' Equity 2,673,767 2,397,425 ----------- ----------- Total Liabilities and Shareholders' Equity $30,056,676 $28,537,230 =========== =========== --------- --------- Net interest income (tax-equivalent basis) 292,338 3.32 % 283,584 3.52 % --------- ====== --------- ====== Tax-equivalent basis adjustment (based on a Federal income tax rate of 35%) (3,180) (3,569) --------- --------- Net interest income $ 289,158 $ 280,015 ========= ========= Net interest income as as a percent of interest earning assets (tax-equivalent basis) 4.18 % 4.29 % ====== ====== See accompanying Notes to Consolidated Financial Statements.
13 RESULTS OF OPERATIONS First quarter net income for 1998, before merger-related charges, was $112.4 million or $0.64 per basic share, an increase of 13.4 percent over $99.2 million the prior year. Net income per diluted share, before merger-related charges, was $0.63, up 12.5 percent from $0.56 in the first quarter of 1997. For the first quarter of 1998 net income was $112.4 million or $0.64 per basic share compared to net income of $82.5 million or $0.47 per basic share, after merger-related charges, for the first quarter of 1997. The merger-related charge of $26.5 million ($16.7 million after tax) was recorded with the March 31, 1997 B.M.J. Financial Corp. acquisition. Key performance indicators are as follows:
- -------------------------------------------------------------------- (In thousands, except per share) Three months ended March 31, 1998 1997 - -------------------------------------------------------------------- Before merger-related charges Net income $112,417 $99,162 Net income per share: Basic $ 0.64 $ 0.57 Diluted 0.63 0.56 Dividends per share 0.27 0.24 Return on: Average assets 1.52% 1.41% Average common equity 17.05 16.77 Efficiency ratio 51.69 50.70 After merger-related charges Net income $112,417 $82,482 Net income per share: Basic $ 0.64 $ 0.47 Diluted 0.63 0.47 Return on: Average assets 1.52% 1.17% Average common equity 17.05 13.95 - ------------------------------------------------------------------------------------------------------
14 Net Interest Income Interest income on a tax-equivalent basis was $532.5 million for the three months ended March 31, 1998, an increase of $27.6 million, or 5.5 percent, compared to a year ago. Interest-earning assets averaged $28.4 billion, an increase of $1.6 billion, or 5.9 percent compared to the prior year period. The increase in interest-earning assets contributed $33.4 million to the increase in tax-equivalent interest income, partially offset by a decline of $5.8 million due to the reduction in the yield on interest-earning assets. While the average balance of interest-earning assets increased over the period, the rate earned on the overall balance decreased 3 basis points from 7.64 percent in 1997 to 7.61 percent in 1998. The decrease was generally the result of maturing assets being reinvested in a lower rate environment. The rate/volume table below presents an analysis of the impact on interest income and expense resulting from changes in average volumes and rates over the periods. Changes that are not due to volume or rate variances have been allocated proportionally to both, based on their relative absolute values.
- ---------------------------------------------------------------------------- Rate/Volume Table Amount of Increase(Decrease) Three months ended March 31, 1998 versus 1997 Due to change in: (Tax-equivalent basis, in millions) Volume Rate Total - ----------------------------------------------------------------------------- Interest Income Loans: Commercial $ 21.6 $ (6.3) $ 15.3 Commercial mortgage (0.7) (0.6) (1.3) Residential mortgage (6.0) (1.5) (7.5) Consumer 8.5 0.1 8.6 - ---------------------------------------------------------------------------- Total loans 23.4 (8.3) 15.1 Securities held to maturity (22.1) (0.8) (22.9) Securities available for sale 34.9 1.0 35.9 Other interest-earning assets (2.8) 2.3 (0.5) - ---------------------------------------------------------------------------- Total interest income 33.4 (5.8) 27.6 - ---------------------------------------------------------------------------- Interest Expense Deposits: Savings deposits (1.8) 1.3 (0.5) Time deposits (13.5) 13.7 0.2 Commercial certificates of deposits > $100 M 0.9 0.3 1.2 - ---------------------------------------------------------------------------- Total deposits (14.4) 15.3 0.9 Other interest-bearing liabilities 17.5 0.5 18.0 - ---------------------------------------------------------------------------- Total interest expense 3.1 15.8 18.9 - --------------------------------------------------------------------------- Net interest income $ 30.3 $ (21.6) $ 8.7 =============================================================================
Interest expense increased $18.9 million, or 8.5 percent, for the three months ended March 31, 1998, compared to the same period in 1997. The increase in the rate paid for interest-bearing liabilities contributed $15.8 million to the increase in interest expense. The 15 increase in the rate paid on interest-bearing liabilities was largely attributable to the increase in the average rate paid on time deposits, from 5.14 percent in the 1997 period to 5.33 percent in 1998 as a result of a change in mix. The remaining $3.1 million increase in interest expense was attributable to an increase in interest-bearing liabilities. Interest-bearing liabilities averaged $22.7 billion, an increase of $950.8 million, or 4.4 percent, from the prior year period. Net interest income on a tax-equivalent basis was $292.3 million for the three months ended March 31, 1998, an increase of $8.7 million, or 3.1 percent, compared to the same period in 1997. The net interest spread percentage on a tax-equivalent basis (the difference between the rate earned on average interest-earning assets and the rate paid on average interest bearing liabilities) was 3.32 percent for the quarter ended March 31, 1998, compared to 3.52 percent for the prior year period. Net interest margin (net interest income on a tax-equivalent basis as a percentage of average interest-earning assets) was 4.18 percent during the first quarter of 1998 compared to 4.29 percent during the same period in 1997. The decline in net interest spread and net interest margin can primarily be attributed to an increase in short-term funding costs, including time deposits, reflecting higher market rates. Non-Interest Income Non-interest income categories for the three months ended March 31, 1998, and 1997, are shown in the following table:
(In millions) ---------------------------------------------------------------------- 1998 1997 Increase(Decrease) Amount Percent ------------------------------------------------------------------------------ Service charges on deposit accounts $30.3 $28.2 $2.1 7.3% Service and loan fee income 12.9 11.3 1.6 13.9 Trust and investment services income 13.4 11.4 2.0 18.7 Other 19.9 17.1 2.8 16.2 -------------------------------------------------------------------------- Total non-interest operating income 76.5 68.0 8.5 12.5 Securities gains 1.4 1.4 - - ------------------------------------------------------------------------- Total non-interest income $77.9 $69.4 $8.5 12.3% ---------------------------------------------------------------------------
The increase in income from service charges on deposits in the first quarter of 1998 was primarily the result of the increase in rate and a change in the method used to assess charges for nonsufficient funds. The increase in service and loan fee income for the first quarter of 1998 was primarily due to increased originations and sales of mortgage loans. 16 The increase in trust and investment services fees for the first quarter of 1998 was generally due to increases in asset management advisory fees and fees from sales of proprietary and third party mutual funds. The increase in other non-interest income was largely attributable to increased insurance fees generated by Corporate Dynamics and Philadelphia Benefits Corp., the recently acquired insurance subsidiaries, discussed in the accompanying Notes to Consolidated Financial Statements. Non-Interest Expenses Non-interest expense categories for the three months ended March 31, 1998, and 1997, are shown in the following table:
(In millions) - ------------------------------------------------------------------------- 1998 1997 Increase(Decrease) Amount Percent - ------------------------------------------------------------------------- Salaries $ 76.5 $ 70.6 $ 5.9 8.4% Pension and other employee benefits 26.6 25.1 1.5 6.0 Furniture and equipment 20.4 18.3 2.1 11.5 Occupancy, net 18.5 18.4 0.1 0.4 Communications 9.5 8.8 0.7 8.8 Other 38.5 39.2 (0.7) (2.0) - ------------------------------------------------------------------------- Total non-interest operating expenses 190.0 180.4 9.6 5.3 Merger-related charges - 26.5 (26.5) (100.0) - ------------------------------------------------------------------------- Total non-interest expenses $190.0 $206.9 $(16.9) (8.2)% =========================================================================
Non-interest expenses for the first three months of 1997 included merger-related restructuring charges of $26.5 million. Excluding these merger-related charges, non-interest expenses increased $9.6 million, or 5.3 percent for the first three months of 1998 when compared to the prior year period. Salaries expense for the first quarter of 1998 was $76.5 million, which increased $5.9 million, or 8.4 percent from the prior year period. Salaries expense for the first quarter of 1998 reflect a higher employee base and increased incentive compensation linked to sales efforts. For the first quarter of 1998, pension and other employee benefits increased $1.5 million, or 6.0 percent, as compared to the first quarter of 1997. The increase in benefits is commensurate with the increase in salaries expense. Furniture and equipment expenses rose $2.1 million, or 11.5 percent, in the first quarter of 1998 when compared with the first quarter of 1997. This is primarily due to the increases in the rental and leasing expenses associated with computer equipment. Other expenses, which did not vary materially from period to period, were largely comprised of legal and professional fees of $6.5 million, advertising and public relations expenses of $5.9 million and amortization of goodwill and intangibles of $4.7 million. 17 Federal and state income taxes for the first quarter of 1998 were $49.6 million, representing an increase of $5.1 million, or 11.5 percent from the comparable period last year. While the provision for income tax increased in 1998 from 1997, the effective tax rate decreased from 35.0 percent in 1997 to 30.6 percent in 1998. The decrease in the effective tax rate was the result of the implementation of business strategies, including the realignment of corporate entities. The lower effective tax rate is expected to continue throughout the remainder of the year. LIQUIDITY Liquidity is the ability to meet the borrowing needs and deposit withdrawal requirements of customers and support asset growth. Principal sources of liquidity are deposit generation, access to purchased funds, maturities and repayments of loans and investment securities and interest and fee income. The consolidated statements of cash flows present the change in cash and due from banks from operating, investing and financing activities. During the first three months of 1998, net cash provided by operating activities totaled $114.2 million. Contributing to net cash provided by operating activities were the results of operations, plus noncash expenses, and proceeds from the sales of mortgages held for sale. Partially offsetting the contributions to operating cash were funds used to originate mortgage loans held for sale and noncash revenues. Net cash used in investing activities totaled $481.5. For the three months ended March 31, 1998, net cash used in transactions involving the investment portfolios totaled $40.9 million, while the growth in the loan portfolio used $339.0 million. Scheduled maturities and anticipated principal repayments of the held to maturity portfolio will approximate $1.2 billion throughout the balance of 1998. In addition, the securities available for sale portfolio is another source of liquidity. These sources can also be used to meet the funding needs during periods of loan growth. Net cash provided by financing activities totaled $436.4 million. During the first three months of 1998, borrowings increased $574.0 million. This increase was partially offset by the decrease in total deposits of $113.8 million and the payment of dividends on the Company's common stock. Liquidity is also available through additional lines of credit and the ability to incur additional debt. The banking subsidiaries have established lines of credit with the Federal Reserve Bank and the Federal Home Loan Bank of New York and other correspondent banks which further support and enhance liquidity. Liquidity is also important at the Parent Company in order to provide funds for operations and to pay dividends to shareholders. Parent Company cash requirements are met 18 primarily through management fees and dividends from its subsidiaries, the issuance of short and long-term debt and the exercise of stock options. The amount of dividends that can be assessed to the bank subsidiaries is subject to certain regulatory restrictions. 19 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT - ------------------------------------------------------- MARKET RISK. ------------ Due to the nature of the Company's business, market risk is primarily interest rate risk. Interest rate risk is the impact that changes in interest rates have on future earnings. The principal objective in managing interest rate risk is to maximize net interest income within the acceptable levels of risk that have been previously established by policy. This risk can be reduced by various strategies, including the administration of liability costs, the reinvestment of asset maturities and the use of off-balance sheet financial instruments. The Company has limited or no market risks associated with foreign currencies, commodities or other marketable instruments. Interest rate risk is monitored through the use of simulation modeling techniques which apply alternative interest rate scenarios to periodic forecasts of future business activity and estimate the related impact on net interest income. The use of simulation modeling assists management in its continuing efforts to achieve earnings growth in varying interest rate environments. Key assumptions in the model include anticipated prepayments on mortgage-related instruments, contractual cash flow and maturities of all financial instruments including derivatives, anticipated future business activity, deposit sensitivity and changes in market conditions. Selected core deposit rates are held constant based on the results of analysis of historical rate movements. These assumptions are inherently uncertain, and as a result, these models cannot precisely estimate the impact that higher or lower rate environments will have on net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes, changes in market conditions as well as changes in management's strategies. Based on the results of the interest simulation model as of March 31, 1998, if interest rates increase or decrease 100 basis points from current rates in an immediate and parallel shock over a twelve month period, the Company would expect an increase of $15.0 million in net interest income and a decrease of $13.0 million in net interest income, respectively. The results of the interest simulation model as of March 31, 1998, do not represent a material change from the amounts previously reported as of December 31, 1997. Interest rate risk management efforts also involve the use of certain derivative financial instruments for the purpose of stabilizing net interest income in a changing interest rate environment. At March 31, 1998, the derivative financial instruments portfolio consisted primarily of interest rate swaps, caps and floors with notional values of $428.0 million, $450.0 million and $430.0 million, respectively. These derivatives resulted in a net interest income reduction of $0.5 million for the first three months of 1998. The cost to terminate these contracts at March 31, 1998, would have been $0.2 million. 20 LOOKING AHEAD This report contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader to understand anticipated future financial performance. These forward-looking statements involve certain risks, uncertainties, estimates and assumptions made by management. Factors that may cause actual results to differ from those results expressed or implied include, but are not limited to, the interest rate environment and the overall economy, the ability of customers to repay their obligations, the adequacy of the allowance for loan losses, the progress of integrating acquired financial institutions, competition and technological changes. Although management has taken certain steps to mitigate the negative effect of the above mentioned items, significant unfavorable changes could severely impact the assumptions used and have an adverse affect on profitability. 21 PART II. OTHER INFORMATION - ---------------------------- ITEM 1. LEGAL PROCEEDINGS. - -------------------------- Management does not believe that the ultimate disposition of the litigation discussed below will have a material adverse effect on the financial position and results of operation of the Company and its subsidiaries, taken as a whole. 1. Annette Loatman on behalf of herself and all others similarly situated v. United Jersey Bank, U.S. District Court for the District of New Jersey, Civil Action No. 95CV05258 (JBS), filed on October 4, 1995, Robert M. Gundle, III, on behalf of himself and all others similarly situated v. Summit Bank, successor in interest to United Jersey Bank, U.S. District Court for the District of New Jersey, Civil Action No. 96-4477 (JBS), filed on October 14, 1996, and Annette Loatman, on behalf of herself and all others similarly situated v. United Jersey Bank, Superior Court of New Jersey, Camden County, Docket No. L-3527-96 ("the State Action"), filed April 24, 1996, dismissed without prejudice pending the outcome of the federal actions on December 9, 1996, and reinstated October 15, 1997 with Robert M. Gundle, III as an additional named plaintiff. Reported on Form 10-K for the period ended December 31, 1997. On March 20, 1998, the Superior Court of New Jersey granted the plaintiffs' motion for class certification. On April 6, 1998, the Bank filed a motion for leave to appeal from the order granting class certification. 2. Daniel Iverson, Lawrence Cohen and Terri Cohen, on behalf of themselves and all others similarly situated v. Collective Bank, a federally chartered savings bank organized under the laws of the United States of America (improperly named as Collective Bancorp, Inc., a Delaware corporation), on behalf of itself and all others similarly situated. Superior Court of New Jersey, Atlantic County, Docket No. ATL-L-2578-95, filed on July 26, 1995. Reported on Form 10-K for the period ended December 31, 1997. On March 16, 1998, the Bank filed its appellate brief and appendix. Oral argument of the appeal is scheduled for May 19, 1998. 3. Noel Hassett, on behalf of himself and all others similarly situated v. Summit Bank. Superior Court of New Jersey, Essex County, Docket No. ESX-L-11224-97, filed on October 3, 1997. Reported on Form 10-K for the period ended December 31, 1997. The parties have agreed that all proceedings in this matter will be stayed until completion of the appeals in the Iverson matter. ITEM 2. CHANGES IN SECURITIES. - ------------------------------ Not applicable. 22 ITEM 3. DEFAULTS UPON SENIOR SECURITIES. - ---------------------------------------- Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY - --------------------------------------------------- HOLDERS. -------- The annual meeting of the shareholders of Summit Bancorp. was held April 17, 1998. The following is a brief description of each matter voted on at the meeting. PROPOSAL 1 - ELECTION OF DIRECTORS - ---------------------------------- The following directors were nominated for election to the Board of Directors as Class II Directors for a three year term: John G. Collins, Anne Evans Estabrook, George L. Miles, Jr., Raymond Silverstein and Orin Smith. Thomas H. Hamilton and William R. Miller were nominated for election as Class I and Class III Directors, respectively, for a two year and one year term, respectively. PROPOSAL 2 - INDEPENDENT ACCOUNTANTS - ------------------------------------ Shareholders were presented with a proposal to ratify the selection of KPMG Peat Marwick LLP, independent certified public accountants, to audit the consolidated financial statements of Summit Bancorp. and its subsidiaries for the year ending December 31, 1998. The results of the voting at the annual meeting were as follows:
- ------------------------------------------------------------------------- SHARES - ------------------------------------------------------------------------- PROPOSAL FOR WITHHELD - ------------------------------------------------------------------------- 1 - Election of Directors John G. Collins 151,473,119 1,567,389 Anne Evans Estabrook 151,481,719 1,558,789 Thomas H. Hamilton 151,440,419 1,600,089 George L. Miles, Jr. 151,346,630 1,693,878 William R. Miller 151,276,176 1,764,332 Raymond Silverstein 151,231,233 1,809,275 Orin Smith 151,455,062 1,585,446 - -------------------------------------------------------------------------- FOR AGAINST ABSTAIN - -------------------------------------------------------------------------- 2-Independent Accountants 151,651,157 754,886 634,465 - --------------------------------------------------------------------------
23 ITEM 5. OTHER INFORMATION. - -------------------------- Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. - ----------------------------------------- (a) Exhibits -------- Exhibit No. Description ----------- ----------- *(10) C (vi) Amendment dated April 17, 1998, to Summit Bancorp. 1993 Incentive Stock and Option Plan. *(10) D (iii) Compensation Committee Consent dated February 18, 1998, (incorporated by reference to Exhibit (10) C (v) on Form 10-K for the year-ended December 31, 1997) *(10) D (iv) Amendment dated April 17, 1998, to UJB Financial Corp. 1990 Stock Option Plan (incorporated by reference to Exhibit (10)C(vi) on Form 10-Q for the quarter ended March 31, 1998). *(10) EE (i) Form of Termination Agreement between Summit Bancorp. and each of T. Joseph Semrod, John Collins, John R. Howell, John R. Haggerty, Larry L. Betsinger, Alfred M. D'Augusta, John R. Feeney, William J. Healy, Dorinda Jenkins- Glover, Sabry J. Mackoul, Joseph A. Micali, Jr., Richard F. Ober, Jr., Dennis Porterfield, Alan N. Posencheg, Edmund C. Weiss, William J. Wolverton. *(10) FF (i) Summit Bancorp. Executive Severance Plan, as amended through October 15, 1997. *(10) LL (v) Compensation Committee Consent dated February 18, 1998, (incorporated by reference to Exhibit (10) C (v) on Form 10-K for the year- ended December 31, 1997) *(10) LL (vi) Amendment dated April 17, 1998, to United Jersey Banks 1987 Stock Option Plan (incorporated by reference to Exhibit (10)C(vi) on Form 10-Q for the quarter ended March 31, 1998). (27) Summit Bancorp. financial data schedule - March 31, 1998 * Management contract or compensatory plan or arrangement. (b) Reports on Form 8-K None. 24 SIGNATURE ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SUMMIT BANCORP. -------------- Registrant DATE: May 14, 1998 BY: /s/ WILLIAM J. HEALY ------------------- William J. Healy Executive Vice President and Comptroller (Duly Authorized Officer and Chief Accounting Officer) 25 EXHIBIT INDEX Exhibit No. Description ----------- ----------- *(10) C (vi) Amendment dated April 17, 1998, to Summit Bancorp. 1993 Incentive Stock and Option Plan. *(10) D (iii) Compensation Committee Consent dated February 18, 1998, (incorporated by reference to Exhibit (10) C (v) on Form 10-K for the year-ended December 31, 1997) *(10) D (iv) Amendment dated April 17, 1998, to UJB Financial Corp. 1990 Stock Option Plan (incorporated by reference to Exhibit (10)C(vi) on Form 10-Q for the quarter ended March 31 1998). *(10) EE (i) Form of Termination Agreement between Summit Bancorp. and each of T. Joseph Semrod, John Collins, John R. Howell, John R. Haggerty, Larry L. Betsinger, Alfred M. D'Augusta, John R. Feeney, William J. Healy, Dorinda Jenkins- Glover, Sabry J. Mackoul, Joseph A. Micali, Jr., Richard F. Ober, Jr., Dennis Porterfield, Alan N. Posencheg, Edmund C. Weiss, William J. Wolverton. *(10) FF (i) Summit Bancorp. Executive Severance Plan, as amended through October 15, 1997. *(10) LL (v) Compensation Committee Consent dated February 18, 1998, (incorporated by reference to Exhibit (10) C (v) on Form 10-K for the year- ended December 31, 1997) *(10) LL (vi) Amendment dated April 17, 1998, to United Jersey Banks 1987 Stock Option Plan (incorporated by reference to Exhibit (10)C(vi) on Form 10-Q for the quarter ended March 31, 1998). (27 Summit Bancorp. financial data schedule - March 31, 1998 * Management contract or compensatory plan or arrangement. 26 EX-10 2 EXHIBIT (10)C(VI) Exhibit (10)C(vi) SUMMIT BANCORP. BOARD OF DIRECTORS MEETING April 17, 1998 STOCK PLAN AMENDMENTS WHEREAS, the Corporation's 1987 Stock Option Plan (the "1987 Plan"), 1990 Stock Option Plan (the "1990 Plan") and 1993 Incentive Stock and Option Plan (the "1993 Plan" and together with the 1987 Plan and 1990 Plan, the "Stock Plans") contain substantially similar definitions for "change in control". WHEREAS, the Corporation has entered into Termination Agreements effective as of October 15, 1997 with certain executive officers of the Corporation (the "Termination Agreements) which contain a definition for "change in control" that differs from those contained in the Stock Plans. WHEREAS, the Board has determined that the definitions for "change in control" contained in the Stock Plans should be revised to conform to the definition for "change in control" contained in the Termination Agreements. WHEREAS, for the purposes of administrative efficiency the Board has determined that the amendment provisions contained in the 1987 Plan and 1990 Plan should be revised to conform to those contained in the 1993 Plan. NOW THEREFORE BE IT, RESOLVED, that the definitions for "change in control" set forth in the second paragraph of Article XIII of the 1987 Plan following the first sentence thereof, the second paragraph of Article XIII of the 1990 Plan following the first sentence thereof and Section 7 of the 1993 Plan are each amended in their entirety to read as follows: For all purposes under the Plan, a "change in control" of the Company shall be deemed to occur (i) upon a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A or Item 1(a) of Form 8-K promulgated under the Exchange Act; or (ii) if any "person" (including as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, but excluding the Company and its subsidiaries or an employee benefit plan of the Company (or any fiduciary thereof) or a corporation controlled by the Company's shareholders in substantially the same character and proportions as their ownership of stock of the Company, or an underwriter temporarily holding securities pursuant to an offering of such securities) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company's outstanding securities then entitled to vote for the election of directors; or (iii) if during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors cease for any reason to constitute at least a majority thereof (excluding, for purposes of this calculation, any director who dies during such period); or (iv) if the Company shall meet the delisting criteria of the New York Stock Exchange or any successor exchange in respect of the number of publicly-held shares or the number of shareholders holding one hundred (100) shares or more; or (v) if the Board of Directors shall approve the sale of all or substantially all of the assets of the Company; or (vi) if the Board of Directors shall approve any merger, consolidation, issuance of securities or purchase of assets, the result of which would be the occurrence of any event described in clause (i), (ii), (iii) or (iv) above or that the shareholders of the Company receive or retain stock having less than 65% combined voting power of the Company resulting from such transaction in substantially the same proportions as their prior ownership of the Company FURTHER RESOLVED, that the second sentence of Article XIX of the 1987 Plan and the second sentence of Article XIX of the 1990 Plan are each hereby amended to provide in their entity as follows: "The Board of Directors or the Committee, as the case may be, shall be authorized to amend (i) the Plan and (ii) the Options granted thereunder to permit the Incentive Options granted thereunder to qualify as incentive stock options within the meaning of Section 422A of the Code." EX-10 3 EXHIBIT (10)EE(I) Exhibit (10) EE (i) TERMINATION AGREEMENT THIS AGREEMENT dated and entered into effective and as of the 15th day of October, 1997, by and between Summit Bancorp., a New Jersey corporation (the "Company"), and ______________________________, residing at ______________________________, _____________, __________ ___________ (the "Executive"). W I T N E S S E T H: WHEREAS, should the Company receive a proposal from a third person, whether solicited by the Company or unsolicited, concerning a possible business combination with or the acquisition of a substantial share of the equity or voting securities of, the Company, the Board of Directors of the Company (the "Board") has deemed it imperative that it and the Company be able to rely on the Executive to continue to serve in the Executive's position, and that the Board and the Company be able to receive and rely upon the Executive's 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 that such a proposal might otherwise create; and WHEREAS, the Company desires to enhance executive morale and its ability to retain existing management; and WHEREAS, the Company desires to reward the Executive for the Executive's valuable, dedicated service to the Company or one or more of its subsidiary corporations (each, a "Subsidiary") should the Executive's service be terminated under circumstances hereinafter described; and WHEREAS, the Board therefore considers it in the best interests of the Company and its shareholders for the Company to enter into Termination Agreements, in form similar to this Agreement, with certain key executive officers of the Company and one or more of its Subsidiaries; and WHEREAS, the Executive is presently the duly elected and acting [insert title of executive] of [insert Company or name of Subsidiary] and is a key executive with whom the Company has been authorized by the Board to enter into this Agreement; NOW, THEREFORE, to assure the Company of the Executive's continued dedication and the availability of the Executive's advice and counsel in the event of any such proposal, to induce the Executive to remain in the employ of the Company or a Subsidiary, and to reward the Executive for the Executive's valuable, dedicated service to the Company or a Subsidiary should the Executive's service be terminated under circumstances hereinafter described, and for other good and valuable consideration, the receipt and adequacy whereof each party acknowledges, the Company and the Executive agree as follows: 1. OPERATION, EFFECTIVE DATE, AND TERM OF AGREEMENT. (a) This Agreement is effective and binding on both parties as of the date hereof. Notwithstanding its present effectiveness, the provisions of paragraphs 3 and 4 of this Agreement shall become operative only when, as and if there has been a "Change in Control" of the Company. For purposes of this Agreement, a "Change in Control" of the Company shall be deemed to occur (i) upon a Change in Control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A or Item 1a of Form 8-K promulgated under the Securities Exchange Act of 1934 ("Exchange Act"); or (ii) if any "person" (including as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, but excluding the Company and its Subsidiaries or an employee benefit plan of the Company (or any fiduciary thereof) or a corporation controlled by the Company's shareholders in substantially the same character and proportions as their ownership of stock of the Company, or an underwriter temporarily holding securities pursuant to an offering of such securities) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company's outstanding securities then entitled to vote for the election of directors; or (iii) if during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof (excluding, for purposes of this calculation, any director who dies during such period); or (iv) if the Company shall meet the delisting criteria of the New York Stock Exchange or any successor exchange in respect of the number of publicly-held shares or the number of shareholders holding one hundred (100) shares or more; or (v) if the Board shall approve the sale of all or substantially all of the assets of the Company; or (vi) if the Board shall approve any merger, consolidation, issuance of securities or purchase of assets, the result of which would be the occurrence of any event described in clause (i), (ii), (iii) or (iv) above or that the shareholders of the Company receive or retain stock having less than 65% combined voting power of the company resulting from such transaction in substantially the same proportions as their prior ownership of the Company. (b) The Company shall be obligated to make the payments referred to in paragraphs 3 and 4 hereof following, and the provisions of paragraph 2 hereof shall apply to, a Change in Control of the Company only if such Change in Control shall have occurred prior to, or as a result of efforts designed to attain such and known to the parties hereto to have commenced prior to, the earliest to occur of the Executive's death, Disability (as hereinafter defined), Normal Retirement Date (as hereinafter defined) or the fifth anniversary of the date hereof; provided, however, that commencing on the fifth anniversary of the date hereof and each annual anniversary of such day thereafter (such day and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), the term of this Agreement shall automatically be extended for one additional year unless at the Renewal Date the Executive is no longer employed by the Company or a Subsidiary or has reached the Executive's Normal Retirement Date or at least twelve (12) months prior to the next Renewal Date (and prior to a Change in Control of the Company), the Company shall have given notice to the Executive that it does not wish to extend the term of this Agreement; provided, further, however, if a Change in Control of the Company shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of not less than thirty-six (36) months beyond the month in which each such Change in Control of the Company occurred, and thereafter solely to the extent necessary for the Executive to enforce the obligations of the Company or Subsidiary employing Executive incurred prior thereto. 2. EMPLOYMENT OF EXECUTIVE. Nothing herein shall affect any right which the Executive or the Company or a Subsidiary may otherwise have to terminate the Executive's employment by the Company or a Subsidiary at any time in any lawful manner, subject always to the Company's providing to the Executive the payments and benefits specified in paragraphs 3 and 4 of this Agreement to the extent hereinbelow provided. In the event any person commences a tender or exchange offer, circulates a proxy statement to the Company's shareholders or takes other steps designed to effect a Change in Control of the Company as defined in paragraph 1 of this Agreement, the Executive agrees that before the Executive's Normal Retirement Date the Executive will not voluntarily leave the employ of the Company or a Subsidiary, and will continue to perform the Executive's regular duties and to render the services specified in the recitals of this Agreement, until such person has abandoned or terminated that person's efforts to effect a Change in Control or until a Change in Control has occurred. Should the Executive voluntarily terminate the Executive's employment before any such effort to effect a Change in Control of the Company has commenced, or after any such effort has been abandoned or terminated without effecting a Change in Control and no other such effort is then being undertaken by any other person, this Agreement shall lapse and be of no further force or effect. 3. TERMINATION FOLLOWING CHANGE IN CONTROL. (a) If any of the events described in paragraph 1 hereof constituting a Change in Control of the Company shall have occurred, the Executive shall be entitled to the benefits provided in paragraph 4 hereof upon the subsequent termination of the Executive's employment within the applicable period set forth in paragraph 4 hereof following such Change in Control unless such termination is (i) due to the Executive's death after the Window Period referred to below or Retirement (as hereinafter defined)(other than Early Retirement during the Window Period, as hereinafter defined); or (ii) by the Company or a Subsidiary by reason of the Executive's Disability or for Cause (as hereinafter defined); or (iii) by the Executive other than for Good Reason (as hereinafter defined). (b) If following a Change in Control the Executive's employment is terminated by reason of the Executive's death after the Window Period, Retirement (other than Early Retirement during the Window Period) or Disability, the Executive shall be entitled to death, retirement or disability benefits, as the case may be, from the Company no less favorable than those benefits to which the Executive would have been entitled had the death, Retirement or termination for Disability occurred during the six (6) month period prior to the Change in Control. If prior to any such termination for Disability, the Executive fails to perform the Executive's duties as a result of incapacity due to physical or mental illness, the Executive shall continue to receive the Executive's Base Salary (as hereinafter defined), less any benefits as may be available to the Executive under the Company's or Subsidiary's disability plans, until the Executive's employment is terminated for Disability. (c) If the Executive's employment shall be terminated by the Company or a Subsidiary for Cause or by the Executive other than for Good Reason, the Company shall pay (subject to any applicable payroll or other taxes required to be withheld) to the Executive the Executive's Base Salary through the Date of Termination (as hereinafter defined), and the Company or a Subsidiary shall have no further obligations to the Executive under this Agreement. This paragraph 3(c) shall not apply to a termination of the Executive's employment by the Company or a Subsidiary by reason of Death, Retirement or Disability. (d) For purposes of this Agreement: (i) "Disability" shall mean the Executive's incapacity to perform the Executive's duties with the Company or Subsidiary on a full-time basis for one hundred eighty (180) consecutive days due to physical or mental illness such that the Executive shall have become qualified to receive benefits under the Company's or a Subsidiary's long-term disability plans applicable to the Executive. Any question as to the existence of Disability upon which the Executive and the Company or Subsidiary cannot agree shall be determined by a qualified independent physician selected by the Company or Subsidiary employing the Executive or its insurers and acceptable to the Executive or an adult member of the Executive's immediate family, which acceptance shall not be unreasonably withheld. The Executive shall be obligated to submit to such medical examinations as may be necessary to determine whether Disability exists. (ii) "Retirement" shall mean that the Executive shall have reached the normal retirement date provided in the Company's or Subsidiary's defined benefit retirement plans applicable to such Executive (the "Normal Retirement Date") or that the Executive shall have taken early retirement (as defined in such retirement plans) and shall no longer be employed by the Company or a Subsidiary ("Early Retirement"). (iii) "Cause" shall mean: (A) the willful commission by the Executive of an illegal act or other act of willful misconduct that causes or will probably cause substantial economic damage to the Company or a Subsidiary or substantial injury to the business reputation of the Company or a Subsidiary; (B) the commission by the Executive of an act of fraud in the performance of such Executive's duties on behalf of the Company or a Subsidiary; (C) the continuing willful failure of the Executive to perform the duties of such Executive to the Company or a Subsidiary (other than any such failure resulting from the Executive's incapacity due to physical or mental illness) after written notice thereof (specifying the particulars thereof in reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to the Executive by the Compensation Committee of the Board; or (D) the final order of a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Executive's employment with the Company or a Subsidiary. (iv) "Good Reason" shall mean, excluding for this purpose an isolated, insubstantial and inadvertent action or failure to act, which is not in bad faith and which is remedied by the Company or applicable Subsidiary promptly after receipt of notice thereof given by the Executive: (A) Without the Executive's express written consent, the assignment by the Company or a Subsidiary to the Executive of duties which (i) are materially different or require travel significantly more time consuming or extensive than the Executive's duties or business travel obligations immediately prior to the Change in Control, or (ii) result, without the Executive's express written consent, in either a significant reduction in the Executive's authority and responsibility as a senior executive of the Company or Subsidiary employing the Executive when compared to the highest level of authority and responsibility assigned to the Executive at any time during the six (6) month period prior to the Change in Control, or, (iii) the removal of the Executive from, or any failure to reappoint or reelect the Executive to, the highest title held since the date six (6) months before the Change in Control, except in connection with a termination of the Executive's employment by the Company or a Subsidiary for Cause (including during the pendency of any Dispute), during any period of incapacity due to physical or mental illness, or by reason of the Executive's death, Disability or Retirement; (B) A reduction by the Company or a Subsidiary of the Executive's Base Salary, or the failure to grant increases in the Executive's Base Salary on a basis at least substantially comparable to those granted to other executives of the Company or a Subsidiary of comparable title, salary grade and performance ratings made in good faith; (C) Requiring the Executive to be based anywhere other than an executive office of the Company or a Subsidiary located in New Jersey or Pennsylvania within twenty-five (25) geographic (not road) miles of the location of the Executive's office prior to the Change in Control, except for required travel on the Company's or a Subsidiary's business to an extent substantially consistent with the Executive's present business travel obligations, without the Executive's express written consent, or in the event of any relocation of the Executive with the Executive's express written consent, the failure by the Company or a Subsidiary to pay (or reimburse the Executive for) all reasonable moving expenses by the Executive relating to a change of principal residence in connection with such relocation and to indemnify the Executive against any loss realized in the sale of the Executive's principal residence in connection with any such change of residence, all to the effect that the Executive shall incur no loss on an after tax basis; (D) The failure by the Company or a Subsidiary to continue to provide the Executive with substantially the same welfare benefits and perquisites, including participation on a comparable basis in the Company's or a Subsidiary's retirement plans, Incentive Bonus Plan (cash bonus plan), Savings Incentive Plan, Incentive Stock and Option Plans, Executive Severance Plan and other plans in which executives of the Company or a Subsidiary of comparable title and salary grade participate, as were provided to the Executive in the twelve (12) months immediately prior to such Change in Control of the Company, or with a package of welfare benefits and perquisites, that, though one or more of such benefits or perquisites may vary from those set forth above, is substantially comparable in all material respects to such welfare benefits and perquisites, taken as a whole; (E) The failure of the Company to obtain the express written assumption of and agreement to perform this Agreement by any successor as contemplated in subparagraph 6(c) hereof; (F) A termination of employment by the Executive for any reason other than Disability or Retirement on or after Executive's Normal Retirement Date during the thirty (30) day period immediately following the first anniversary of a Change in Control of the Company defined in subparagraphs 1(a)(i), (ii) (iii) or (iv) or the consummation of a transaction described in subparagraphs 1(a)(v) or (vi) (such thirty (30) day period being referred to herein as the "Window Period"). (G) The giving by the Company or applicable Subsidiary of a notice that participation by the Executive in the Company's Executive Severance Plan or that the Executive's Termination Agreement would not be renewed; (H) The filing by the Company of a petition for bankruptcy or similar insolvency of the Company or the filing by any other party of such a petition which is not dismissed within sixty (60) days; or (I) Any failure by the Company or applicable Subsidiary to comply with any provision of this Agreement with respect to Executive. (v) "Dispute" shall mean (A) in the case of termination of employment of the Executive with the Company or a Subsidiary by the Company or a Subsidiary for Disability or Cause, that the Executive challenges the existence of Disability or Cause and (B) in the case of termination of employment of an Executive with the Company or a Subsidiary by the Executive for Good Reason, that the Company or a Subsidiary challenges the existence of Good Reason. (vi) "Base Salary" shall mean the amount determined by multiplying the Executive's highest semi-monthly or other periodic rate of base pay paid to the Executive at any time during the period commencing twelve (12) months prior to the Change of Control and ending on the date of Notice of Termination by the number of pay periods per year. The following items are not part of base pay, as used herein: reimbursed expenses, any amount paid on account of overtime or holiday work, payments on account of insurance premiums or other contributions made to other welfare or benefit plans, and any year-end or other bonuses, commissions and gifts. (vii) "Bonus Amount" means the highest annual cash incentive bonus earned by the Executive from the Company or a Subsidiary during the last three (3) completed fiscal years of the Company immediately preceding the Executive's Date of Termination (annualized in the event the Executive was not employed by the Company or a Subsidiary for the whole of any such fiscal year). For purposes of this subparagraph (d), no act, or failure to act, on the Executive's part shall be considered "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's action or omission was in the best interests of the Company or a Subsidiary. (e) Any purported termination of employment by the Company or a Subsidiary or by the Executive shall be communicated by written Notice of Termination to the other party. For purposes of this Agreement, a "Notice of Termination" shall mean a notice given by the Executive or the Company or a Subsidiary, as the case may be, which shall indicate the specific provision of this Agreement applicable to such termination and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for determination of any payments under this Agreement. The Executive shall not be entitled to give a Notice of Termination that the Executive is terminating the Executive's employment with the Company or a Subsidiary for Good Reason more than six (6) months following the occurrence of the event alleged to constitute Good Reason. (f) For purposes of this Agreement, except as provided below, the "Date of Termination" shall mean the date specified in a Notice of Termination, which shall be not more than ninety (90) days after such Notice of Termination is given. The Date of Termination of a proposed Termination for Disability shall be at least thirty (30) days after the giving of the Notice of Termination. If within thirty (30) days after any Notice of Termination is given, the party who receives such Notice of Termination notifies the other party that a Dispute exists, the Date of Termination shall be the date on which the Dispute is finally determined, either by mutual written agreement of the parties, or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected); provided that the Date of Termination shall be extended by a notice of Dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such Dispute with reasonable diligence and provided further that pending the resolution of any such Dispute, the Company or a Subsidiary shall continue to pay the Executive the same Base Salary and to provide the Executive with the same or substantially comparable employee benefits and perquisites, including participation in the Company's or a Subsidiary's retirement plans, Savings Incentive Plan, Incentive Bonus Plan, Incentive Stock and Option Plans and Executive Severance Plan that the Executive was paid and provided at any time during the period commencing twelve (12) months prior to the Change of Control and ending on the date of Notice of Termination Should it ultimately be determined that a challenged termination by the Company or a Subsidiary by reason of the Executive's Disability or for Cause was justified, or that a challenged termination by the Executive for Good Reason was not justified, then the Executive shall promptly pay the Company or a Subsidiary (as the case may be) an amount equal to all sums paid by the Company or a Subsidiary to the Executive from the date of termination specified in the Notice of Termination until final resolution of the Dispute pursuant hereto, with interest at the base rate charged from time to time by Summit Bank, New Jersey, all options, rights and restricted stock granted to the Executive during such period shall be canceled or returned to the Company or Subsidiary, and, to the extent permitted by law, no service as an employee shall be credited to the Executive for such period for pension purposes. The Executive shall not be obligated to pay to the Company or a Subsidiary the cost of providing the Executive with employee benefits and perquisites for such period (which cost for purposes of health plans means the applicable premium under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended) unless the final judgment, order or decree of a court resolving the Dispute determines that the Executive acted in bad faith in giving a notice of Dispute. Should it ultimately be determined that a challenged termination by the Company or a Subsidiary by reason of the Executive's Disability or for Cause was not justified, or that a challenged termination by the Executive for Good Reason was justified, then the Executive shall be entitled to retain all sums paid to the Executive pending resolution of the Dispute and shall be entitled to receive, in addition, the payments and other benefits provided for in paragraph 4 hereof. 4. PAYMENTS AND BENEFITS UPON TERMINATION. If within three (3) years after a Change in Control of the Company, there occurs a termination of employment of the Executive with the Company or a Subsidiary, other than a termination of employment which is (i) due to the Executive's death after the Window Period or Retirement other than Early Retirement during the Window Period; or (ii) by the Company or a Subsidiary by reason of the Executive's Disability or for Cause; or (iii) by the Executive other than for Good Reason, then, and expressly on the condition that the Company or Subsidiary employing the Executive receive on the Date of Termination a Release, Covenant Not to Sue, Non-Disclosure and Non-Solicitation Agreement executed by the Executive (or the Executive's legal representative, in the event of the death or Disability of the Executive), in the form set forth in Exhibit A to this Agreement (the "Release Agreement"), and that such Release Agreement be effective: (a) The Company or a Subsidiary will pay to the Executive as compensation for services rendered, promptly following the effective date of the Release Agreement, a lump sum cash amount (subject to any applicable payroll or other taxes required to be withheld computed at the rate for supplemental payments) equal to (X) the sum of (i) three (3) times the Executive's Base Salary, plus (ii) three (3) times the Executive's Bonus Amount, less (Y) the aggregate lump sum cash severance amount in respect of base salary and bonus pursuant to subparagraphs 5(a)(i) and (v) of the Company's Executive Severance Plan (or any successor provision) payable to the Executive upon termination of employment, delivery by the Executive of the Release, Covenant Not to Sue, Non-Disclosure and Non-Solicitation Agreement referred to therein, and the expiration of all periods during which the Executive may revoke any release of claims in such agreement. (b) The Executive will be entitled to receive "Special Retirement Benefits" as provided herein, so that the total retirement benefits the Executive receives from the Company will approximate the total retirement benefits the Executive would have received under all defined benefit retirement plans (which may include non-qualified, supplemental and excess benefits retirement plans but shall not include severance plans) and other employment contracts of the Company and its Subsidiaries in which the Executive participates were the Executive fully vested under such retirement plans and entitled to all benefits payable under such other employment contracts and had the Executive continued in the employ of the Company or a Subsidiary for one hundred twenty (120) months following the Date of Termination or until the Executive's Normal Retirement Date, if earlier (provided that such additional period shall be inclusive of and shall not be in addition to any period of service credited under any severance plan of the Company or a Subsidiary). The benefits specified in this subparagraph will include all ancillary benefits, such as early retirement and survivor rights. The amount payable to the Executive or the Executive's beneficiaries under this subparagraph shall equal the excess of (1) the retirement benefits that would be paid to the Executive or the Executive's beneficiaries, under all retirement plans and other employment contracts of the Company and its Subsidiaries in which the Executive participates if (A) the Executive were fully vested under such plans and entitled to all benefits payable under such other employment contracts, (B) the one hundred twenty (120) month period (or the period until the Executive's Normal Retirement Date, if less) following the Date of Termination were added to the Executive's credited service under such plans and contracts, (C) the terms of such plans and the policies and procedures by which such plans were administered were those most favorable to the Executive which were in effect at any time during the period commencing twelve (12) months prior to the Change of Control and ending on the date of Notice of Termination, and (D) the Executive's highest average annual base salary as defined under such retirement plans and other employment contracts and any cash bonus which under the terms of such plan or contract is used to calculate benefits thereunder were calculated as if the Executive had been employed by the Company or a Subsidiary for a one hundred and twenty (120) month period (or the period until the Executive's Normal Retirement Date, if earlier) following the Date of Termination and had the Executive's salary and cash bonus during such period been equal to the Executive's Base Salary and Bonus Amount; over (2) the retirement benefits that are payable to the Executive or the Executive's beneficiaries under all retirement plans and other employment contracts of the Company and its Subsidiary in which the Executive participates. These Special Retirement Benefits are provided on an unfunded basis, are not intended to meet the qualification requirements of Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"), and shall be payable solely from the general assets of the Company. These Special Retirement Benefits shall be payable at the times and in the manner provided in the applicable retirement plans and other employment contracts to which they relate, or at the election of the Executive they shall be paid in a lump sum actuarial equivalent utilizing the actuarial assumptions of the defined benefit pension plan applicable to the Executive. (c)(i) As used herein, "Welfare Plans" shall mean the medical, dental, vision, life, dependent life, personal accident, employee banking services, and educational matching gift plans of the Company or a Subsidiary in which the Executive was participating at the Date of Termination, and shall not include disability, tuition reimbursement, medical and dependent care spending plans, and business travel accident plans. The Executive will remain an active participant in all Welfare Plans with the Executive's Base Salary used as the basis for determining the level of benefits, for a period of thirty- six (36) months after the Date of Termination or until the Participant's Normal Retirement Date, if earlier; provided, however, that if employee contributions are generally required by any such plan the Executive pays to the Company or Subsidiary an amount equal to the required contribution, if any, which such plans provide are to be made by employees of status and seniority comparable to the status and seniority of the Executive at the Date of Termination, which amounts shall be paid by the Executive at the time or times required by such plans for employee contributions, and further provided, that the benefits provided shall be reduced by any benefits provided under post-retirement benefit programs (such as retiree life insurance) of the Company or a Subsidiary. In the event applicable law or the terms of any such Welfare Plan do not permit continued participation by the Executive, then the Company or a Subsidiary will arrange to provide the Executive with benefits substantially similar to and no less favorable than the benefits the Executive was entitled to receive under such Welfare Plan at any time during the period commencing twelve (12) months prior to the Change of Control and ending on the date of Notice of Termination for a period terminating thirty-six (36) months after the Date of Termination; provided, however, that if employee contributions are generally required by any such plan the Executive pays to the Company or Subsidiary an amount equal to the required contribution, if any, which such plans provide are to be made by employees of status and seniority comparable to the status and seniority of the Executive at the Date of Termination, which amounts shall be paid by the Executive at the time or times required by such plans for employee contributions. (ii) In lieu of continued participation in the Company or a Subsidiary's disability plans, in the event that the Executive becomes disabled during the period of participation in Welfare Plans provided for herein, as determined by approval for disability benefits under the federal Social Security program, the Company or Subsidiary shall make direct payments to the Executive commencing upon termination of participation in the Welfare Plans hereunder and under any Severance Plan and during the continuation of such disability, as determined under the federal Social Security program of the amounts and for the periods the Executive would have received benefits under the Company or Subsidiary's long-term disability plan (after taking into account any offsets to income under such plan) as if the Executive had qualified for long-term disability payments under the Company or Subsidiary's long-term disability plan immediately prior to the Date of Termination. (iii) The continuation of welfare benefits provided by this subparagraph 4(c) shall be inclusive of any period of welfare benefits continuation provided by any severance plan or other contract of the Company or a Subsidiary, it being the intention of the parties that the Executive shall receive continuation of welfare benefits for the longest period provided by any severance plan or contract and this Agreement, not the sum of the periods provided in various severance plans and contracts and this Agreement. (iv) If any benefits provided hereunder are provided outside of a Welfare Plan and would have been tax- exempt or tax-favored to the Executive if provided under a Welfare Plan, the Company or Subsidiary shall make additional payments to the Executive in reimbursement of taxes in order to put the Executive in the same after tax position as if the benefits had been provided under a Welfare Plan. (v) In the event the Executive becomes employed with another employer and becomes eligible to receive welfare benefits under plans provided by such employer, the welfare benefits provided hereunder shall be secondary to those provided under such other plans. (vi) After the Date of Termination the Executive may also participate in those post-retirement benefit programs under which the Executive meets the qualifications, which qualifications may include contributions by the Executive and appropriate elections at the Date of Termination. 5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. (a) In the event that any payment or benefit received or to be received by the Executive pursuant to the terms of this Agreement (the "Contract Payments") or of any other plan, arrangement or agreement of the Company (or any affiliate) ("Other Payments" and, together with the Contract Payments, the "Payments") would, in the opinion of independent tax counsel selected by the Company and reasonably acceptable to the Executive ("Tax Counsel"), be subject to the excise tax (the "Excise Tax") imposed by section 4999 of the Code (in whole or in part), as determined as provided below, then, unless subparagraph 5(e) below is applicable, the Company shall pay to the Executive, at the time specified in subparagraph 5(b) hereof, an additional amount (the "Offset Payment") such that the net amount retained by the Executive, after deduction of the Excise Tax on the Payments and any federal, state and local income tax and Excise Tax upon the payment provided for by this subparagraph 5(a), and any interest, penalties or additions to tax payable by the Executive with respect thereto, shall be equal to the total present value of the Contract Payments and Other Payments at the time such Payments are to be made. For purposes of determining whether any of the Payments will be subject to the Excise Tax and the amounts of such Excise Tax, (1) the total amount of the Payments shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, except to the extent that, in the opinion of Tax Counsel, a Payment (in whole or in part) does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code, or such "excess parachute payments" (in whole or in part) are not subject to the Excise Tax, (2) the amount of the Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Payments or (B) the amount of "excess parachute payments" within the meaning of section 280G(b)(1) of the Code (after applying clause (1) hereof), and (3) the value of any noncash benefits or any deferred payment or benefit shall be determined by Tax Counsel in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Offset Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rates of federal income taxation applicable to individuals in the calendar year in which the Offset Payment is to be made and state and local income taxes at the highest marginal rates of taxation applicable to individuals as are in effect in the state and locality of the Executive's residence in the calendar year in which the Offset Payment is to be made, net of the maximum reduction in federal income taxes that can be obtained from deduction of such state and local taxes, taking into account any limitations applicable to individuals subject to federal income tax at the highest marginal rates. (b) The Offset Payments provided for in subparagraph 5(a) hereof shall be made upon the earlier of (i) the payment to the Executive of any Contract Payment or Other Payment or (ii) the imposition upon the Executive or payment by the Executive of any Excise Tax. (c) If it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding or the opinion of Tax Counsel that the Excise Tax is less than the amount taken into account under subparagraph 5(a) hereof, the Executive shall repay to the Company within five days of the Executive's receipt of notice of such final determination or opinion the portion of the Offset Payment attributable to such reduction (plus the portion of the Offset Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Offset Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax or a federal, state and local income tax deduction) plus any interest received by the Executive from the taxing authorities on the amount of such repayment. If it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding or the opinion of Tax Counsel that the Excise Tax exceeds the amount taken into account hereunder (including by reason of any payment the existence or amount of which cannot be determined at the time of the Offset Payment), the Company shall make an additional Offset Payment in respect of such excess within five days of the Company's receipt of notice of such final determination or opinion. (d) In the event of any change in, or further interpretation of, sections 280G or 4999 of the Code and the regulations promulgated thereunder subsequent to a Change in Control, the Executive shall be entitled, by written notice to the Company, to request an opinion of Tax Counsel regarding the application of such change to any of the foregoing, and the Company shall use its best efforts to cause such opinion to be rendered as promptly as practicable. All fees and expenses of Tax Counsel incurred in connection with this Agreement shall be borne by the Company. (e) If in the opinion of Tax Counsel the Company would not be required to make an Offset Payment if the Payments to the Executive that would be treated as "parachute payments" under Section 280G of the Code were reduced by up to $50,000, then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the "Safe Harbor Cap") and no Offset Payment shall be required to be made to the Executive. The reduction of the amounts payable under this Agreement, if applicable, shall be made by reducing first the payments under paragraph 4(a) above, unless an alternative method of reduction is elected by the Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder by an amount not exceeding $50,000 would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. 6. GENERAL. (a) The Company or a Subsidiary shall pay promptly as incurred the Executive's reasonable attorney's fees and expenses incurred in good faith by the Executive as a result of any dispute (regardless of the outcome thereof) with the Company or a Subsidiary or any other party regarding the validity or enforceability of, or liability under, any provision of this Agreement or the act of any party thereunder or any guarantee of performance thereof and pay prejudgment interest on any delayed payment to the Executive calculated at the Summit Bank, New Jersey base rate of interest in effect from time to time from the date that payment should have been made under this Agreement; provided, however, that the Executive shall not have been found by the court to have acted in bad faith. Any finding of bad faith must be final with the time to appeal therefrom having expired and no appeal having been perfected. (b) The Company's obligation to pay the Executive (or the Executive's dependents, beneficiaries or estate) the compensation and to make the arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which the Company may have against the Executive or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Except as expressly provided herein, the Company waives all rights which it may now have or may hereafter have conferred upon it, by statute or otherwise, to terminate, cancel or rescind this Agreement in whole or in part. Except as provided in paragraphs 3(f) and 5(c) herein, each and every payment made hereunder by the Company shall be final and the Company will not seek to recover for any reason all or any part of such payment from the Executive or any person entitled thereto. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. (c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by written agreement to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this paragraph 6 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (d) This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to the Executive hereunder if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive's devisee, legatee or other designee or, if there be no such designee, to the Executive's estate. The obligations of the Executive hereunder shall not be assignable by the Executive. (e) The Executive's rights under this Agreement shall be non-transferable except by will or by the laws of descent and distribution and except insofar as applicable law may otherwise require. Subject to the foregoing, no right, benefit or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process, or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall, to the full extent permitted by law, be null, void and of no effect. 7. NOTICE. For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, or if delivered personally or by courier, receipt requested, or by facsimile transmission, receipt acknowledged, addressed as follows: If to the Executive: If to the Company: Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 Attention: Secretary to the Board or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 8. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No assurances or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the law of the State of New Jersey. 9. FINANCING. All amounts due and benefits provided under this Agreement shall constitute general obligations of the Company or Subsidiary employing the Executive in accordance with the terms of this Agreement. The Executive shall have only an unsecured right to payment thereof out of the general assets of the Company or such Subsidiary. Notwithstanding the foregoing, the Company or such Subsidiary may, by agreement with one or more trustees to be selected by the Company or such Subsidiary, create a trust on such terms as the Company or such Subsidiary shall determine to make payments to the Executive in accordance with the terms of this Agreement. 10. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 11. SUPERSEDEAS. While this Agreement is in addition to and not in lieu of any other plan providing for payments to or benefits for the Executive or any agreement now existing or which hereafter may be entered into between the Company and the Executive, this Agreement supersedes all prior agreements and understandings of the parties hereto with respect to the Company's severance obligations to the Executive and any other similar payments to the Executive due upon termination of employment other than those agreements and understandings contained in the Company's Executive Severance Plan or specifically provided for in any employment contract between the Company and the Executive. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above. SUMMIT BANCORP. EXECUTIVE By: Name: Title: EXHIBIT A RELEASE, COVENANT NOT TO SUE, NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT This RELEASE, COVENANT NOT TO SUE, NON-DISCLOSURE AND NON- SOLICITATION AGREEMENT (the "AGREEMENT") dated as of_________ among (1) ______________("Executive"), and (2) Summit Bancorp. and all parent and subsidiary corporations, partnerships and other entities and affiliates controlled by, controlling or under common control with Summit Bancorp. (together with any predecessor and successor entities hereinafter being collectively referred to as "SUB") sets forth the agreements of the parties hereto with regard to the matters set forth herein: 1. Background. Executive is an Executive of SUB and a party to a Participation Agreement last amended October 15, 1997 pursuant to which Executive participates in SUB's Executive Severance Plan and a Termination Agreement last amended October 15, 1997 (the Plan and these Agreements together being collectively referred to as the "Contracts"). Any capitalized terms used but not defined herein shall have the meaning set forth in the applicable Contract. a. A Change of Control [has/has NOT] occurred [on (date)]. If a Change of Control has NOT occurred, Executive is not entitled to any benefits under the Termination Agreement. b. Executive's employment with SUB will or has terminated on ______________, which shall be the Date of Termination for purposes of the Contracts, notwithstanding any failure to adhere to the provisions for giving a Notice of Termination and the method of determining the Date of Termination set forth in the Contracts, any such failures being hereby waived by the parties. c. This termination shall constitute a termination "[for cause/ disability /retirement /other than for cause /by mutual agreement]" for purposes of any stock options and restricted stock which Executive holds, and the Termination Date shall be the termination date for the purposes of such options. Attached hereto as Appendix A is a list of all outstanding SUB options held by Executive on the date hereof. 2. Payment. Executive shall receive within two business days following the EFFECTIVE DATE (as defined in paragraph 7 hereof) $_____________, the gross amount due to Executive under the Contracts, which shall be paid to Executive as $_________________ by check or deposit in Executive's bank account, with the balance withheld in respect of federal, state and local taxes and benefits contributions, which Executive acknowledges represents all amounts currently due Executive under the Contracts. Executive acknowledges and agrees that Executive is not entitled to any severance payments under any other severance program of SUB, the Contracts being intended to substitute for any such other severance program. SUB continues to be obligated to provide certain welfare and pension benefits and perquisites, as more fully set forth in the Contracts. 3. Restrictive Covenants. In consideration of the payments to Executive as specified in paragraph 2 above, Executive agrees as follows: a. Non-Solicitation of SUB Customers. For a period of two (2) years from the date hereof, Executive will not actively solicit or induce any person, corporation, or other entity that is a customer of SUB to become a customer of any other person, firm, corporation, or other entity which directly or indirectly competes with SUB, or approach any such person, firm, corporation, or other entity for such purpose or authorize or knowingly approve the taking of such actions by other persons, without the prior written consent of SUB. This shall not be deemed to prohibit (i) responding to requests for service initiated by customers of SUB, (ii) solicitation of the public at large through television, radio, newspapers, magazines, newsletters or Internet home pages, or (iii) resolicitation by the competitor of persons, firms, corporations or other entities who were customers of both SUB and the competitor on the date hereof for those services provided to the customer by the competitor on the date hereof. b. Non-Solicitation of SUB Employees. For a period of five (5) years from the date hereof, Executive will not solicit or induce any person who is an employee of SUB or was such at any time within three months prior to the date hereof to become employed by any other person, firm or corporation or approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by other persons, without the prior written consent of SUB. c. Non-Disclosure of Proprietary Information. Executive acknowledges that during the course of Executive's employment with SUB Executive received, obtained or became aware of or had access to proprietary information, lists and records of customers and trade secrets which are the property of SUB and which are not known by competitors or generally by the public ("Proprietary Information") and recognizes such Proprietary Information to be valuable and unique assets of SUB. For purposes of this subparagraph: (i) Proprietary Information is deemed to include, without limitation, (A) marketing materials, marketing manuals, policy manuals, procedure manuals, policy and procedure manuals, operating manuals and procedures and product documentation, (B) all information about pricing, products, procedures, practices, business methods, systems, plans, strategies or personnel of SUB, (C) circumstances surrounding the relationships with, knowledge of, or information about the customers, clients, and accounts of SUB, including but not limited to the identity of current active customers or prospects who have been contacted by SUB, the expiration dates and other terms of loans or deposit or other banking relationships, details or special product provisions or special combinations of products, or special prices, and (D) all other information about SUB which has not been disclosed in documents filed with the U.S. Securities and Exchange Commission or otherwise publicly disseminated by SUB, whether or not that information is recorded and notwithstanding the method of recordation, if any; and (ii) Proprietary Information is deemed to exclude all information legally in the public domain. Executive agrees to hold the Proprietary Information in the strictest confidence and agrees not to use or disclose any Proprietary Information, directly or indirectly, at any time for any purpose, without the prior written consent of SUB or to use for Executive's benefit or the benefit of any person, firm, corporation or other entity (other than SUB), any Proprietary Information, and to use Executive's best efforts to prevent such prohibited use or disclosure by any other persons. Executive has returned all Proprietary Information in Executive's possession or control to SUB. d. Cooperation, No Detrimental Actions. Executive will cooperate with SUB in enforcing its claims against customers and former customers of SUB, including appearing as a witness for SUB in court or administrative proceedings, subject to reasonable reimbursement for Executive's time and expenses. Executive will not take actions or make disparaging statements which are detrimental to SUB or the RELEASEES, as defined in paragraph 5 below. e. Remedies. Executive hereby acknowledges that Executive's duties and responsibilities under this paragraph 3 are unique and extraordinary and that irreparable injury may result to SUB in the event of a breach of the terms and conditions of this paragraph 3, which may be difficult to ascertain, and that the award of damages would not be adequate relief to SUB and the RELEASEES. Executive therefore agrees that in the event of Executive's breach of any of the terms or conditions of this paragraph 3, SUB shall have the right, without posting any bond or other security, to preliminary and permanent injunctive relief as well as damages and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies in law or equity to which SUB may be entitled against Executive. The covenants of Executive in paragraphs 3a, 3b, 3c and 3d of this Agreement shall each be construed as an agreement independent of any other provision in this AGREEMENT, and the existence of any claim or cause of action of Executive against SUB, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by SUB of paragraphs 3a, 3b, 3c and 3d. f. Enforcement. If at the time of the enforcement of subparagraphs 3a, 3b, 3c, 3d or 3e above a court shall hold that the period or scope of the provisions thereof are unreasonable under the circumstances then existing, the parties hereby agree that the maximum period or scope under the circumstances shall be substituted for the period or scope stated in those subparagraphs. 4. Short-Swing Securities Profits. Executive acknowledges that Executive will remain subject to the short-swing liability provisions of Section 16 of the federal Securities Exchange Act of 1934 for six months following termination of employment. 5. Release. In consideration of the payments to Executive as specified in paragraph 2 above, Executive grants SUB a RELEASE of only all claims, both known and unknown, that Executive may have that relate to the termination of Executive's employment (hereafter a "WRONGFUL TERMINATION CLAIM"). The Executive and SUB agree that a WRONGFUL TERMINATION CLAIM, specifically and without limitation, does not include claims: a. for indemnification as a corporate agent of SUB against claims by third parties; b. under employee benefit plans, including supplemental employee retirement plans, maintained by SUB or any of the predecessor organizations thereof, including but not limited to rights under any workers compensation program, Section 502(a) of the Employee Retirement Income Security Act, as amended, 29 U.S.C. Par. 1001 et seq., and under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"); c. arising out of enforcement of the Contracts or this Agreement by Executive; or d. constituting cross-claims against SUB as a result of claims brought by unaffiliated third parties against Executive based on Executive's service as an executive of SUB. The statutes which could form the basis for a WRONGFUL TERMINATION CLAIM include, but are not limited to, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Par. 1971 et seq.; the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Par. 621 et seq.; Section 510 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Par. 1001 et seq.; the Americans With Disabilities Act, as amended, 42 U.S.C. Par.12101 et seq.; the Older Workers Benefit Protection Act, as amended, 29 U.S.C. Par.621 et seq.; the Civil Rights Act of 1866, as amended, 42 U.S.C. Par.1981 et seq.; the New Jersey Law Against Discrimination, as amended, N.J.S.A. 10:5- 1 et seq.; the New Jersey Conscientious Employee Protection Act, as amended, N.J.S.A. 34:19-1 et seq.; the New York Human Rights Law, Executive Law Par.290 et seq.; the Pennsylvania Human Relations Act, as amended, 43 P.S. Par.951 et seq.; and the Pennsylvania Whistleblower Law, as amended, 43 P.S. Par.1421 et seq. The common law (non-statutory) theories under which a WRONGFUL TERMINATION CLAIM could be made include, but are not limited to, breach of an express employment contract, breach of a contract implied from a personnel handbook or manual, or commission of a civil wrong (known as a "tort") resulting in Executive's termination, or for alleged violation of the public policy of the United States or any state. Granting a RELEASE of any WRONGFUL TERMINATION CLAIM pursuant to this AGREEMENT means that on behalf of Executive and all who succeed to Executive's rights and responsibilities, Executive releases and gives up only any and all WRONGFUL TERMINATION CLAIMS that Executive may have against SUB, and any of its subsidiaries, affiliates or divisions, and all of their directors, officers, representatives, shareholders, agents, employees, and all who succeed to their rights and responsibilities (collectively referred to as "RELEASEES"). With respect to any charges filed concerning events or actions relating to a WRONGFUL TERMINATION CLAIM that occurred on or before the date of this AGREEMENT or Executive's Termination Date (whichever is later), Executive waives and releases any right that Executive may have to recover in any lawsuit or proceeding brought by Executive or by an administrative agency on Executive's behalf against the RELEASEES. 6. Covenant Not to Sue. Executive covenants not to sue the RELEASEES over any WRONGFUL TERMINATION CLAIM. Such a covenant not to sue the RELEASEES means that Executive represents that Executive has not through the date of execution of this Agreement filed a WRONGFUL TERMINATION CLAIM, charge or lawsuit with any court or government agency against the RELEASEES, and that Executive will not file such a lawsuit subsequent to execution of this Agreement. Executive also waives any right to become, and promises not to become, a member of any class in a case in which WRONGFUL TERMINATION CLAIMS are asserted against any of the RELEASEES. 7. Review Period. Executive acknowledges that Executive has up to 21 days to review this AGREEMENT, and was advised to review it with an attorney of Executive's choice. Executive also acknowledges that Executive was further advised that Executive has seven days after Executive signs this AGREEMENT to revoke it by notifying SUB in writing, of such revocation as set forth under Notices below. This AGREEMENT shall become effective on the tenth (10th) day following its execution by Executive (the "EFFECTIVE DATE"), unless revoked in accordance with the preceding sentence. 8. Revocation of Authority. Executive agrees and acknowledges that as of the Termination Date Executive shall no longer be empowered to bind SUB in any agreement, whether verbal or written, and that Executive shall have no authority to execute any documents, deeds, leases, or other contracts on behalf of SUB. To the extent not effected by termination of Executive under the Contracts, Executive resigns from all offices and positions with SUB. 9. Successors and Assigns. All rights and duties of SUB under this Agreement shall be binding on and inure to the benefit of SUB, its successors and assigns. All rights of Executive hereunder shall be binding upon and inure to the benefit of Executive's personal or legal representatives. 10. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally with receipt acknowledged or sent by registered or certified mail, postage prepaid or by reputable national overnight delivery service, to the addresses shown below, unless changed by notices given as herein provided, except that notice of change of address only shall be effective upon actual receipt: If to SUB, to: Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 Attention: Executive Vice President of Human Resources With a copy to: Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 Attention: General Counsel If to the Executive, to: With a copy to: 11. Covenant Not to Challenge Enforceability. Both Executive and SUB understand that this AGREEMENT is final and binding when executed by both parties, subject to paragraph 7 above, and both agree not to thereafter challenge its enforceability. 12. Applicable Law. This AGREEMENT shall be deemed to have been made within the State of New Jersey, and it shall be interpreted, construed, and enforced in accordance with the law of the State of New Jersey, and before the Courts of the State of New Jersey. 13. Amendments, Modifications, Waivers. This AGREEMENT cannot be amended or modified except by a written document signed by both SUB and Executive and no provision can be waived except by a written document signed by the waiving party. 14. By signing this AGREEMENT, Executive acknowledges: a. EXECUTIVE HAS READ THIS AGREEMENT COMPLETELY. b. EXECUTIVE HAS HAD AN OPPORTUNITY TO CONSIDER THE TERMS OF THIS AGREEMENT. c. EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF EXECUTIVE'S CHOOSING PRIOR TO EXECUTING THIS AGREEMENT. d. EXECUTIVE KNOWS THAT EXECUTIVE MAY BE GIVING UP IMPORTANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT. e. EXECUTIVE UNDERSTANDS AND MEANS EVERYTHING THAT EXECUTIVE HAS SAID IN THIS AGREEMENT, AND EXECUTIVE AGREES TO ALL ITS TERMS. f. EXECUTIVE IS NOT RELYING ON SUB OR ANY REPRESENTATIVE OF SUB TO EXPLAIN THIS AGREEMENT AND RELEASE TO EXECUTIVE. EXECUTIVE HAS HAD AN OPPORTUNITY TO CONSULT AN ATTORNEY OR OTHER ADVISOR TO EXPLAIN THIS AGREEMENT AND ITS CONSEQUENCES TO EXECUTIVE BEFORE EXECUTIVE SIGNED IT, AND EXECUTIVE HAS AVAILED HIMSELF OR HERSELF OF THIS OPPORTUNITY TO WHATEVER EXTENT EXECUTIVE DESIRED. g. EXECUTIVE HAS SIGNED THIS AGREEMENT VOLUNTARILY AND ENTIRELY OF EXECUTIVE'S OWN FREE WILL, WITHOUT ANY PRESSURE FROM SUB OR ANY REPRESENTATIVE OF SUB, OR ANYONE ELSE. IN WITNESS WHEREOF, and intending to be legally bound hereby, this Agreement has been executed as of the day and year first above written. ATTEST: SUMMIT BANCORP. __________________________________ By: ____________________________________ Secretary Executive Vice President ____________________________________ EXECUTIVE ____________________________________ (Social Security Number) STATE OF NEW JERSEY: COUNTY OF _______________________: I certify that on this _______ day of ____________, _______ personally came before me _______________(Executive), who, being duly sworn, acknowledged under oath to my satisfaction that such person is named in and personally executed the foregoing Receipt and Release as such person's voluntary act and deed, for the purposes set forth therein. IN WITNESS WHEREOF, I have set my hand this ____ day of _____________, ______. By:___________________________________ Notary Public of the State of New Jersey My Commission expires __________________ EX-10 4 Exhibit (10) FF (i) SUMMIT BANCORP. EXECUTIVE SEVERANCE PLAN (as Amended through October 15, 1997) 1. PURPOSES The purposes of the Summit Bancorp. Executive Severance Plan (the "Plan") are (a) to enhance executive morale, (b) to enhance the ability of Summit Bancorp. (formerly known as UJB Financial Corp. and United Jersey Banks) (the "Company") to retain existing management and, if needed, to attract new executives, (c) to reward eligible executives for their valuable, dedicated service to the Company or one or more of its subsidiary corporations (each, a "Subsidiary") with reasonable compensation in the event of their termination of employment with the Company or a Subsidiary, and (d) by providing generally applicable terms of severance, to avoid the legal expense and reduce management time associated with terminations. 2. EFFECTIVE DATE This amendment and restatement of the Plan is effective as of October 15, 1997 and will determine the eligibility for benefits of all executives who are selected to participate in the Plan (the "Participants") and who are terminated on or after such date. 3. ADMINISTRATION The Plan shall be administered by the Compensation Committee (the "Committee") of the Board of Directors of the Company (the "Board"), consisting of three or more directors having full authority to act in the matter, all of whom are Disinterested Persons. For purposes of this section, a Disinterested Person shall mean a person who, at the time action is taken, and within the one (1) year period prior thereto, is not, and has not been, an employee of the Company. The Committee shall have the power to interpret and construe the Plan and other powers and duties as set forth in the Plan, and any such interpretation and construction of any provisions of this Plan shall be final. The Committee shall report any actions taken to the Board at the next meeting of the Board following such Committee action. 4. PARTICIPATION The Committee shall from time to time select the Participants from among those key executives who are determined by the Committee to be rewarded for their valuable, dedicated service to the Company or a Subsidiary. The Company shall provide each Participant with a letter (a "Participation Letter") evidencing the Participant's participation in the Plan and setting forth the payments and benefits to which the Participant may become entitled and containing such other terms, provisions and conditions not inconsistent with the Plan, including but not limited to provisions for the extension or renewal of such agreement, as shall be determined by the Committee. Without limiting the foregoing, it is an express condition to a Participant's entitlement to the payments of amounts and the provision of benefits provided for by paragraph 5(a) hereof that the Company receive on the Date of Termination (as hereinafter defined) a Release, Covenant Not to Sue, Non-Disclosure and Non- Solicitation Agreement executed by the Participant, or the Participant's legal representative, in the event of the death or Disability of the Participant, in the form set forth in Exhibit A to this Plan ("Release Agreement"), and that such Release Agreement be effective. The Participation Letter shall clearly set forth this requirement and provide that a Participant's participation is also conditioned on the Participant's acknowledgment of the terms of the Participation Letter by delivery to the Company of a counterpart thereof signed by the Participant to evidence such acknowledgment. Any purported termination of employment by the Company or a Subsidiary or by the Participant shall be communicated by written Notice of Termination to the other party. For purposes of this Plan, a "Notice of Termination" shall mean a notice given by a Participant or the Company or a Subsidiary, as the case may be, which shall indicate the specific provision of this Plan applicable to such termination and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for determination of any payments under this Plan. A Participant shall not be entitled to give a Notice of Termination that the Participant is terminating the Participant's employment with the Company or a Subsidiary for Good Reason (as hereinafter defined) more than six (6) months following the occurrence of the event alleged to constitute Good Reason. A Participant shall cease to be a Participant in the Plan upon the earliest to occur of the Date of Termination (as hereinafter defined), the Participant's Retirement (as hereinafter defined) and the date set forth in the Participation Letter as provided therein. For purposes of this Plan, except as provided below, the "Date of Termination" shall mean the date specified in a Notice of Termination, which shall be not more than ninety (90) days after such Notice of Termination is given. The Date of Termination of a proposed Termination for Disability (as hereafter defined), shall be at least thirty (30) days after the giving of the Notice of Termination. If, within thirty (30) days after any Notice of Termination is given, the party who receives such Notice of Termination notifies the other party that a Dispute (as hereinafter defined) exists, the Date of Termination shall be the date on which the Dispute is finally determined, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected); provided that the Date of Termination shall be extended by a notice of Dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such Dispute with reasonable diligence and provided further that pending the resolution of any such Dispute, the Company or a Subsidiary shall continue to pay the Participant the same Base Salary (as hereinafter defined) and to provide the Participant with the same or substantially comparable employee benefits and perquisites, including participation in the Company's or a Subsidiary's retirement plans and Savings Incentive Plan (but excluding the Incentive Bonus Plan (cash bonus plan), Incentive Stock and Option Plans, and other plans not available to employees generally), that the Participant was paid and provided in the twelve (12) months immediately prior to the giving of the Notice of Termination. For purposes of this Plan, a Dispute shall mean (i) in the case of termination of employment of a Participant with the Company or a Subsidiary by the Company or a Subsidiary for Disability or Cause (as hereinafter defined), that the Participant challenges the existence of Disability or Cause and (ii) in the case of termination of employment of a Participant with the Company or a Subsidiary by the Participant for Good Reason, that the Company or such Subsidiary challenges the existence of Good Reason. Should it ultimately be determined that a challenged termination by the Company or a Subsidiary by reason of the Participant's Disability or for Cause was justified, or that a challenged termination by the Participant for Good Reason was not justified, then (1) the Participant shall promptly pay to the Company or a Subsidiary (as the case may be) an amount equal to all sums paid by the Company or a Subsidiary to the Participant from the date of termination specified in the Notice of Termination until final resolution of the Dispute pursuant hereto, with interest at the base rate charged from time to time by Summit Bank, New Jersey, and (2) to the extent permitted by law, no service as an employee shall be credited to the Participant for such period for pension purposes. The Participant shall not be obligated to repay to the Company or a Subsidiary the cost of providing the Participant with employee benefits and perquisites for such period (which cost for purposes of health plans means the applicable premium under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended) unless the final judgment, order or decree of a court resolving the Dispute determines that the Participant acted in bad faith in giving a notice of Dispute. Should it be ultimately determined that a challenged termination by the Company or a Subsidiary by reason of the Participant's Disability or for Cause was not justified, or that a challenged termination by the Participant for Good Reason was justified, then the Participant shall be entitled to retain all sums paid to the Participant pending resolution of the Dispute and shall be entitled to receive,in addition, the payments and other benefits provided for in paragraph 5 hereof. 5. PAYMENTS AND BENEFITS UPON TERMINATION OF EMPLOYMENT (a) In the event of a termination of employment of a Participant with the Company or a Subsidiary, other than a termination of employment which is (i) due to the Participant's death or Retirement; or (ii) by the Company or a Subsidiary by reason of the Participant's Disability or for Cause; or (iii) by the Participant other than for Good Reason, the Participant shall be entitled, subject to compliance with paragraph 7 hereof, as compensation for services rendered (subject to any applicable payroll or other taxes required to be withheld), until the expiration of the applicable period set forth below; to: (i) receive, promptly following the effective date of the Release Agreement, a lump sum cash amount equal to two (2) times the Participant's Base Salary; (ii) receive, promptly following the effective date of the Release Agreement, but only if the Participant participates in the Savings Investment Plan (i.e., a 401(k) plan) immediately preceding the Date of Termination, a lump sum cash amount equal to the aggregate amount of matching contributions that the Company or a Subsidiary would have been required to contribute under such plan for the account of the Participant, assuming the Participant had contributed the maximum amount allowable by law to such plan during a period of twenty-four (24) months after the Date of Termination. (iii)(A) remain an active participant in all Welfare Plans (as used herein, "Welfare Plans" shall mean the medical, dental, vision, life, dependent life, personal accident, employee banking services, and educational matching gift plans of the Company or a Subsidiary in which the Participant was participating at the Date of Termination, and shall not include disability, tuition reimbursement, medical and dependent care spending plans, and business travel accident plans) with the Participant's Base Salary used as the basis for determining the level of benefits, for a period of twenty-four (24) months after the Date of Termination or until the Participant's Normal Retirement Date (as hereinafter defined), if earlier; provided, however, that if employee contributions are generally required by any such plan the Participant pays to the Company or Subsidiary an amount equal to the required contribution, if any, which such plans provide are to be made by employees of status and seniority comparable to the status and seniority of the Participant at the Date of Termination, which amounts shall be paid by the Participant at the time or times required by such plans for employee contributions, and further provided, that the benefits provided shall be reduced by any benefits provided under post-retirement benefit programs (such as retiree life insurance) of the Company or a Subsidiary. In the event applicable law or the terms of any such Welfare Plan do not permit continued participation by the Participant, then the Company or a Subsidiary will arrange to provide the Participant with benefits substantially similar to and no less favorable than the benefits the Participant was entitled to receive under such Welfare Plan immediately prior to the giving of the Notice of Termination for a period terminating twenty-four (24) months after the Date of Termination; provided, however, that if employee contributions are generally required by any such plan the Participant pays to the Company or Subsidiary an amount equal to the required contribution, if any, which such plans provide are to be made by employees of status and seniority comparable to the status and seniority of the Participant at the Date of Termination, which amounts shall be paid by the Participant at the time or times required by such plans for employee contributions. (B) In lieu of continued participation in the Company or a Subsidiary's disability plans, in the event that the Participant becomes disabled during the period of participation in Welfare Plans provided for herein, as determined by approval for disability benefits under the federal Social Security program, the Company or Subsidiary shall make direct payments to the Participant commencing upon termination of participation in the Welfare Plans hereunder and under any Termination Agreement and during the continuation of such disability, as determined under the federal Social Security program of the amounts and for the periods the Participant would have received benefits under the Company or Subsidiary's long- term disability plan (after taking into account any offsets to income under such plan) as if the Participant had qualified for long-term disability payments under the Company or Subsidiary's long- term disability plan immediately prior to the Date of Termination. (C) If any benefits provided hereunder are provided outside of a Welfare Plan and would have been tax-exempt or tax-favored to the Participant if provided under a Welfare Plan, the Company or Subsidiary shall make additional payments to the Participant in reimbursement of taxes in order to put the Participant in the same after tax position as if the benefits had been provided under a Welfare Plan. (D) In the event the Participant becomes employed with another employer and becomes eligible to receive welfare benefits under plans provided by such employer, the welfare benefits provided hereunder shall be secondary to those provided under such other plans. (E) After the Date of Termination the Participant may also participate in those post-retirement benefit programs under which the Participant meets the qualifications, which qualifications may include contributions by the Participant and appropriate elections at the Date of Termination; (iv) receive, promptly following the effective date of the Release Agreement, any awards previously made to the Participant under the Company's Incentive Bonus Plan or comparable plan, or any successor plan, for any year of employment prior to the year which includes the Date of Termination, payment of which had not been made prior to the Date of Termination, and any accrued vacation or other paid time off; (v) receive, promptly following the effective date of the Release Agreement, a lump sum cash amount equal to two (2) times the Participant's Bonus Amount (as hereinafter defined); (vi) receive "Special Retirement Benefits" as provided herein, so that the total retirement benefits the Participant receives from the Company will approximate the total retirement benefits the Participant would have received under all defined benefit retirement plans (which may include non-qualified, supplemental and excess benefits retirement plans but shall not include severance plans) and other employment contracts of the Company and its Subsidiaries in which the Participant participates were the Participant fully vested under such retirement plans and entitled to all benefits payable under such other employment contracts and had the Participant continued in the employ of the Company or a Subsidiary for twenty-four (24) months following the Date of Termination or until the Participant's Normal Retirement Date, if earlier. The benefits specified in this subparagraph will include all ancillary benefits, such as early retirement and survivor rights. The amount payable to the Participant or the Participant's beneficiaries under this subparagraph shall equal the excess of (1) the retirement benefits that would be paid to the Participant or the Participant's beneficiaries, under all retirement plans and other employment contracts of the Company and its Subsidiaries in which the Participant participates if (A) the Participant were fully vested under such plans and entitled to all benefits payable under such other employment contracts, (B) the twenty-four (24) month period (or the period until the Participant's Normal Retirement Date, if less) following the Date of Termination were added to the Participant's credited service under such plans and contracts, (C) the terms of such plans and the policies and procedures by which such plans were administered were those most favorable to the Participant which were in effect at any time during the period commencing twelve (12) months prior to the Change of Control and ending on the date of Notice of Termination, and (D) the Participant's highest average annual base salary as defined under such retirement plans and other employment contracts and any cash bonus which under the terms of such plan or contract is used to calculate benefits thereunder were calculated as if the Participant had been employed by the Company or a Subsidiary for a twenty-four (24) month period (or the period until the Participant's Normal Retirement Date, if earlier) following the Date of Termination and had the Participant's salary and cash bonus during such period been equal to the Participant's Base Salary and Bonus Amount; over (2) the retirement benefits that are payable to the Participant or the Participant's beneficiaries under all retirement plans and other employment contracts of the Company and its Subsidiary in which the Participant participates. These Special Retirement Benefits are provided on an unfunded basis, are not intended to meet the qualification requirements of Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"), and shall be payable solely from the general assets of the Company. These Special Retirement Benefits shall be payable at the times and in the manner provided in the applicable retirement plans and other employment contracts to which they relate, or at the election of the Participant they shall be paid in a lump sum actuarial equivalent utilizing the actuarial assumptions of the defined benefit pension plan applicable to the Participant; (vii) continued provision of perquisites, such as tax preparation services, use of any automobile and club memberships provided by the Company or a Subsidiary, in all cases for a period of twelve (12) months following the Date of Termination, provided that any personal expenses incurred by the Participant in connection with such club memberships shall be paid by the Participant. Club dues shall not be considered a personal expense. The Participant may elect to have any or all of such club memberships transferred to the Participant during or upon the expiration of such twelve (12) month period, and the Company or such Subsidiary shall assign and transfer to the Participant without charge the rights to any amounts which would be recoverable upon the termination of all such club memberships which the Participant has elected to be transferred to the Participant, such as a bond or shares; and (viii) senior executive level outplacement services, at least comparable to what is being provided to senior executives on the date hereof, for a period of up to two years. Notwithstanding the foregoing, if the Participant's Date of Termination is within two (2) years of the normal retirement date provided in the Company's or Subsidiary's defined benefit retirement plan applicable to the Participant ( the "Normal Retirement Date"), the sums provided for in subparagraphs 5(a)(i), (ii), and (v) shall be multiplied by a fraction ("Adjustment Fraction"), the numerator of which is equal to the number of full months from the Date of Termination to the Normal Retirement Date, and the denominator of which is equal to 24. (b) In the event of termination of employment of a Participant with the Company or a Subsidiary due to the Participant's death, Retirement or Disability, the Participant shall be entitled to a cash bonus for the portion of the fiscal year in which death, Retirement or Disability occurs equal to a pro rata (determined by dividing the number of days elapsed in such fiscal year to such Death, Retirement or Disability by 365 or 366, as applicable) portion of the Bonus Amount, and such death, retirement or disability benefits, as the case may be, as are provided in the Company's or a Subsidiary's plans covering such Participant on such events and the Company or a Subsidiary shall have no further obligation to the Participant under this Plan. (c) In the event of termination of employment of a Participant with the Company or a Subsidiary by the Company or a Subsidiary for Cause or by the Participant other than for Good Reason, the Participant shall be entitled (subject to any applicable payroll or other taxes required to be withheld), to receive the Participant's Base Salary through the Date of Termination and the Company or a Subsidiary shall have no further obligation to the Participant under this Plan. This paragraph 5(c) shall not apply to a termination of employment by reason of Death, Retirement or Disability. 6. DEFINITIONS For purposes of the Plan: (a) Base Salary shall mean the amount determined by multiplying the Participant's highest semi-monthly or other periodic rate of base pay paid to the Participant during the twelve-month period immediately prior to the giving of the Notice of Termination by the number of pay periods per year. The following items are not part of base pay, as used herein: reimbursed expenses, any amount paid on account of overtime or holiday work, payments on account of insurance premiums or other contributions made to other welfare or benefit plans, and any year-end or other bonuses, commissions and gifts. (b) Bonus Amount means the highest annual cash incentive bonus earned by the Participant from the Company or a Subsidiary during the last three (3) completed fiscal years of the Company immediately preceding the Participant's Date of Termination (annualized in the event the Participant was not employed by the Company or a Subsidiary for the whole of any such fiscal year). (c) Cause shall mean: (i) the willful commission by the Participant of an illegal act or other act of willful misconduct that causes or will probably cause substantial economic damage to the Company or a Subsidiary or substantial injury to the business reputation of the Company or a Subsidiary; (ii) the commission by the Participant of an act of fraud in the performance of such Participant's duties on behalf of the Company or a Subsidiary; (iii) the continuing willful failure of the Participant to perform the duties of such Participant to the Company or a Subsidiary (other than any such failure resulting from the Participant's incapacity due to physical or mental illness) after written notice thereof (specifying the particulars thereof in reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to the Participant by the Committee; or (iv) the final order of a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Participant's employment with the Company or a Subsidiary. No act, or failure to act, on the Participant's part shall be considered "willful" unless done or omitted to be done by the Participant not in good faith and without reasonable belief that the Participant's action or omission was in the best interests of the Company or a Subsidiary. (d) Good Reason shall mean, excluding for this purpose an isolated insubstantial and inadvertent action or failure to act, which is not in bad faith and which is remedied by the Company or applicable Subsidiary promptly after receipt of notice thereof given by the Participant: (i) Without the Participant's express written consent, the assignment by the Company or a Subsidiary to the Participant of duties which are inconsistent with the Participant's then title and salary grade or a significant reduction in the Participant's authority and responsibility as a senior executive or the removal of the Participant from, or any failure to reappoint or reelect the Participant to, the title of Executive Vice President or above, except in connection with a termination of the Participant's employment by the Company or a Subsidiary for Cause (including during the pendency of any Dispute), during any period of incapacity due to physical or mental illness, or by reason of the Participant's death, Disability or Retirement; (ii) A reduction by the Company or a Subsidiary of the Participant's Base Salary, or the failure to grant increases in the Participant's Base Salary on a basis at least substantially comparable to those granted to other executives of the Company or a Subsidiary of comparable title, salary grade and performance ratings made in good faith; (iii) Requiring the Participant to be based anywhere other than an executive office of the Company or a Subsidiary located in New Jersey or Pennsylvania within sixty (60) geographic (not road) miles of 301 Carnegie Center, West Windsor Township, New Jersey, except for required travel on the Company's or a Subsidiary's business to an extent substantially consistent with the Participant's present business travel obligations, without the Participant's express written consent; or in the event of any relocation of the Participant with the Participant's express written consent, the failure by the Company or a Subsidiary to pay (or reimburse the Participant for) all reasonable moving expenses by the Participant relating to a change of principal residence in connection with such relocation and to indemnify the Participant against any loss realized in the sale of the Participant's principal residence in connection with any such change of residence, all to the effect that the Participant shall incur no loss on an after tax basis; (iv) The failure by the Company or a Subsidiary to continue to provide the Participant with substantially the same welfare benefits and perquisites, including participation on a comparable basis in the Company's or a Subsidiary's retirement plans, Incentive Bonus Plan (cash bonus plan), Savings Incentive Plan, Incentive Stock and Option Plans, and other plans in which executives of the Company or a Subsidiary of comparable title and salary grade participate, as are presently provided to the Participant, or with a package of welfare benefits and perquisites, that, though one or more of such benefits or perquisites may vary from those set forth above, is substantially comparable in all material respects to such welfare benefits and perquisites, taken as a whole; provided, however, that a reduction, amendment or elimination of any benefit, perquisite or plan shall not be Good Reason if applicable to all executives of comparable title, salary grade and performance ratings made in good faith; (v) The giving by the Company or applicable Subsidiary of a notice that participation by the Participant in the Company's Executive Severance Plan or the Participant's Termination Agreement would not be renewed; (vi) The filing by the Company of a petition for bankruptcy or similar insolvency of the Company or the filing by any other party of such a petition which is not dismissed within sixty (60) days; or (vii) Any failure by the Company or applicable Subsidiary to comply with any of the provisions of this Plan with respect to the Participant. (e) Disability shall mean the Participant's incapacity to perform Participant's duties with the Company or Subsidiary on a full-time basis for one hundred eighty (180) consecutive days due to physical or mental illness such that the Participant shall have become qualified to receive benefits under the Company's or a Subsidiary's long-term disability plans applicable to the Participant. Any question as to the existence of Disability upon which Participant and the Company or Subsidiary cannot agree shall be determined by a qualified independent physician selected by the Company or Subsidiary employing the Participant or its insurers and acceptable to the Participant or an adult member of the Participant's immediate family, which acceptance shall not be unreasonably withheld. Participant shall be obligated to submit to such medical examinations as may be necessary to determine whether Disability exists. (f) Retirement shall mean that the Participant shall have reached the Participant's Normal Retirement Date or that the Participant shall have taken early retirement (as defined in the Company's or Subsidiary's defined benefit retirement plan applicable to the Participant) and shall no longer be employed by the Company or a Subsidiary. 7. RELEASE OF CLAIMS BY PARTICIPANT The payment of all amounts and provision of all benefits provided for by paragraph 5(a) shall be conditioned on the execution by the Participant and delivery to the Company or applicable Subsidiary of a Release Agreement and the effectiveness of such Release Agreement not later than twenty-one (21) calendar days after the Date of Termination. 8. FINANCING All amounts due and benefits provided under the Plan shall constitute general obligations of the Company or Subsidiary employing the Participant in accordance with the terms of the Plan. A Participant shall have only an unsecured right to payment thereof out of the general assets of the Company or such Subsidiary. Notwithstanding the foregoing, the Company or such Subsidiary may, by agreement with one or more trustees to be selected by the Company or such Subsidiary, create a trust on such terms as the Company or such Subsidiary shall determine to make payments to Participants in accordance with the terms of the Plan. 9. TERMINATION AND AMENDMENT OF THE PLAN The Board shall have the power at any time, in its discretion, to amend, in whole or in part, or terminate the Plan, except that no amendment or termination shall impair or abridge the obligations of the Company or a Subsidiary or the rights of the Participants under any Participation Letters previously delivered pursuant to the Plan. Any amendment or termination of the Plan shall be adopted by the Board, by resolution of the Board at a regular meeting of the Board or special meeting called for such purpose or by unanimous written consent. 10. BENEFIT OF PLAN The Plan shall be binding upon and shall inure to the benefit of the Participant, the Participant's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, and the Company, its Subsidiaries and their respective Successors. The term "Successor" shall mean any person, firm, corporation or other business entity that, at any time, whether by merger, acquisition or otherwise, acquires all or substantially all of the stock, assets or business of the Company or a Subsidiary, as the case may be. If the Participant should die while any amounts would still be payable to the Participant hereunder if the Participant had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Participant's devisee, legatee or other designee or, if there be no such designee, to the Participant's estate. 11. NON-ASSIGNABILITY Each Participant's rights under this Plan shall be non- transferable except by will or by the laws of descent and distribution and except insofar as applicable law may otherwise require. Subject to the foregoing, no right, benefit or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process, or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall, to the full extent permitted by law, be null, void and of no effect. 12. EFFECT OF OTHER PLANS Except as provided in paragraph 5, (a) nothing in the Plan shall affect the level of benefits provided to or received by any Participant (or the Participant's estate or beneficiaries) as part of any employee benefit plan of the Company or a Subsidiary and (b) the Plan shall not be construed to affect in any way a Participant's rights and obligations under any other plan maintained by the Company or a Subsidiary on behalf of employees or any other contract between the Company or a Subsidiary and the Participant. The Participant shall not be required to mitigate the amount of any payment under the Plan by seeking employment or otherwise, and there shall be no right of setoff or counterclaim, in respect of any claim, debt or obligation, against any payments to the Participant, the Participant's dependents, beneficiaries or estate provided for in the Plan. 13. TERMINATION OF EMPLOYMENT Nothing in the Plan shall be deemed to entitle a Participant to continued employment with the Company or a Subsidiary, and the rights of the Company or a Subsidiary to terminate the employment of a Participant in any lawful manner shall continue as fully as though this Plan were not in effect. 14. SEVERABILITY In the event that any provision or portion of the Plan shall be determined to be invalid or unenforceable for any reason, the remaining provisions and portions of the Plan shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. 15. LEGAL COSTS The Company or a Subsidiary shall pay promptly as incurred the Participant's reasonable attorney's fees and expenses incurred in good faith by the Participant as a result of any dispute (regardless of the outcome thereof) with the Company or a Subsidiary or any other party regarding the validity or enforceability of, or liability under, any provision of this Plan or the act of any party thereunder or any guarantee of performance thereof and pay prejudgment interest on any delayed payment to the Participant calculated at the Summit Bank, New Jersey base rate of interest in effect from time to time from the date that payment should have been made under the Plan; provided, however, that the Participant shall not have been found by the court to have acted in bad faith. Any finding of bad faith must be final with the time to appeal therefrom having expired and no appeal having been perfected. 16. GOVERNING LAW All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of New Jersey. 17. OTHER IMPORTANT INFORMATION 1. Plan Sponsor: Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 Telephone No.: 609-987-3200 EIN: 22-1903313 (Plan I.D. #506) 2. Plan Administrator and Agent for Service of Legal Process: Compensation Committee The Compensation Committee is appointed by the Board of Directors of Summit Bancorp. Agent for Service of Legal Process: General Counsel Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 3. Type of Plan - Executive Severance Plan 4. Type of Administration - Employer administered 5. Plan Trustee: Not Applicable 6. Plan Year The Plan year is January 1-December 31 7. ERISA Rights As a Participant in the Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan Participants shall be entitled to: Examine, without charge, at the Plan Administrator's office and at other locations, all Plan documents, including insurance contracts and copies of all documents filed by the Plan with the U.S. Department of Labor, such as annual reports and plan descriptions. Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. The Administrator may make a reasonable charge for the copies. In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your Plan, called "fiduciaries", have a legal duty to do so prudently and in the interest of you and the other Plan Participants and beneficiaries. No one, including your employer or any other person, may discriminate against you in any way to prevent you from obtaining a severance benefit or exercising your rights under ERISA. If your claim for a severance benefit is denied in whole or part you must receive a written explanation of the reason for the denial. You have the right to have the Plan Administrator review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights: For instance, if you request materials from the Plan Administrator and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $100 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest area office of the U.S. Labor-Management Services Administration, Department of Labor. EXHIBIT A RELEASE, COVENANT NOT TO SUE, NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT This RELEASE, COVENANT NOT TO SUE, NON-DISCLOSURE AND NON- SOLICITATION AGREEMENT (the "AGREEMENT") dated as of_________ among (1) ______________("Executive"), and (2) Summit Bancorp. and all parent and subsidiary corporations, partnerships and other entities and affiliates controlled by, controlling or under common control with Summit Bancorp. (together with any predecessor and successor entities hereinafter being collectively referred to as "SUB") sets forth the agreements of the parties hereto with regard to the matters set forth herein: 1. Background. Executive is an Executive of SUB and a party to a Participation Agreement last amended October 15, 1997 pursuant to which Executive participates in SUB's Executive Severance Plan and a Termination Agreement last amended October 15, 1997 (the Plan and these Agreements together being collectively referred to as the "Contracts"). Any capitalized terms used but not defined herein shall have the meaning set forth in the applicable Contract. a. A Change of Control [has/has NOT] occurred [on (date)]. If a Change of Control has NOT occurred, Executive is not entitled to any benefits under the Termination Agreement. b. Executive's employment with SUB will or has terminated on ______________, which shall be the Date of Termination for purposes of the Contracts, notwithstanding any failure to adhere to the provisions for giving a Notice of Termination and the method of determining the Date of Termination set forth in the Contracts, any such failures being hereby waived by the parties. c. This termination shall constitute a termination "[for cause/ disability /retirement /other than for cause /by mutual agreement]" for purposes of any stock options and restricted stock which Executive holds, and the Termination Date shall be the termination date for the purposes of such options. Attached hereto as Appendix A is a list of all outstanding SUB options held by Executive on the date hereof. 2. Payment. Executive shall receive within two business days following the EFFECTIVE DATE (as defined in paragraph 7 hereof) $_____________, the gross amount due to Executive under the Contracts, which shall be paid to Executive as $_________________ by check or deposit in Executive's bank account, with the balance withheld in respect of federal, state and local taxes and benefits contributions, which Executive acknowledges represents all amounts currently due Executive under the Contracts. Executive acknowledges and agrees that Executive is not entitled to any severance payments under any other severance program of SUB, the Contracts being intended to substitute for any such other severance program. SUB continues to be obligated to provide certain welfare and pension benefits and perquisites, as more fully set forth in the Contracts. 3. Restrictive Covenants. In consideration of the payments to Executive as specified in paragraph 2 above, Executive agrees as follows: a. Non-Solicitation of SUB Customers. For a period of two (2) years from the date hereof, Executive will not actively solicit or induce any person, corporation, or other entity that is a customer of SUB to become a customer of any other person, firm, corporation, or other entity which directly or indirectly competes with SUB, or approach any such person, firm, corporation, or other entity for such purpose or authorize or knowingly approve the taking of such actions by other persons, without the prior written consent of SUB. This shall not be deemed to prohibit (i) responding to requests for service initiated by customers of SUB, (ii) solicitation of the public at large through television, radio, newspapers, magazines, newsletters or Internet home pages, or (iii) resolicitation by the competitor of persons, firms, corporations or other entities who were customers of both SUB and the competitor on the date hereof for those services provided to the customer by the competitor on the date hereof. b. Non-Solicitation of SUB Employees. For a period of five (5) years from the date hereof, Executive will not solicit or induce any person who is an employee of SUB or was such at any time within three months prior to the date hereof to become employed by any other person, firm or corporation or approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by other persons, without the prior written consent of SUB. c. Non-Disclosure of Proprietary Information. Executive acknowledges that during the course of Executive's employment with SUB Executive received, obtained or became aware of or had access to proprietary information, lists and records of customers and trade secrets which are the property of SUB and which are not known by competitors or generally by the public ("Proprietary Information") and recognizes such Proprietary Information to be valuable and unique assets of SUB. For purposes of this subparagraph: (i) Proprietary Information is deemed to include, without limitation, (A) marketing materials, marketing manuals, policy manuals, procedure manuals, policy and procedure manuals, operating manuals and procedures and product documentation, (B) all information about pricing, products, procedures, practices, business methods, systems, plans, strategies or personnel of SUB, (C) circumstances surrounding the relationships with, knowledge of, or information about the customers, clients, and accounts of SUB, including but not limited to the identity of current active customers or prospects who have been contacted by SUB, the expiration dates and other terms of loans or deposit or other banking relationships, details or special product provisions or special combinations of products, or special prices, and (D) all other information about SUB which has not been disclosed in documents filed with the U.S. Securities and Exchange Commission or otherwise publicly disseminated by SUB, whether or not that information is recorded and notwithstanding the method of recordation, if any; and (ii) Proprietary Information is deemed to exclude all information legally in the public domain. Executive agrees to hold the Proprietary Information in the strictest confidence and agrees not to use or disclose any Proprietary Information, directly or indirectly, at any time for any purpose, without the prior written consent of SUB or to use for Executive's benefit or the benefit of any person, firm, corporation or other entity (other than SUB), any Proprietary Information, and to use Executive's best efforts to prevent such prohibited use or disclosure by any other persons. Executive has returned all Proprietary Information in Executive's possession or control to SUB. d. Cooperation, No Detrimental Actions. Executive will cooperate with SUB in enforcing its claims against customers and former customers of SUB, including appearing as a witness for SUB in court or administrative proceedings, subject to reasonable reimbursement for Executive's time and expenses. Executive will not take actions or make disparaging statements which are detrimental to SUB or the RELEASEES, as defined in paragraph 5 below. e. Remedies. Executive hereby acknowledges that Executive's duties and responsibilities under this paragraph 3 are unique and extraordinary and that irreparable injury may result to SUB in the event of a breach of the terms and conditions of this paragraph 3, which may be difficult to ascertain, and that the award of damages would not be adequate relief to SUB and the RELEASEES. Executive therefore agrees that in the event of Executive's breach of any of the terms or conditions of this paragraph 3, SUB shall have the right, without posting any bond or other security, to preliminary and permanent injunctive relief as well as damages and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies in law or equity to which SUB may be entitled against Executive. The covenants of Executive in paragraphs 3a, 3b, 3c and 3d of this Agreement shall each be construed as an agreement independent of any other provision in this AGREEMENT, and the existence of any claim or cause of action of Executive against SUB, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by SUB of paragraphs 3a, 3b, 3c and 3d. f. Enforcement. If at the time of the enforcement of subparagraphs 3a, 3b, 3c, 3d or 3e above a court shall hold that the period or scope of the provisions thereof are unreasonable under the circumstances then existing, the parties hereby agree that the maximum period or scope under the circumstances shall be substituted for the period or scope stated in those subparagraphs. 4. Short-Swing Securities Profits. Executive acknowledges that Executive will remain subject to the short-swing liability provisions of Section 16 of the federal Securities Exchange Act of 1934 for six months following termination of employment. 5. Release. In consideration of the payments to Executive as specified in paragraph 2 above, Executive grants SUB a RELEASE of only all claims, both known and unknown, that Executive may have that relate to the termination of Executive's employment (hereafter a "WRONGFUL TERMINATION CLAIM"). The Executive and SUB agree that a WRONGFUL TERMINATION CLAIM, specifically and without limitation, does not include claims: a. for indemnification as a corporate agent of SUB against claims by third parties; b. under employee benefit plans, including supplemental employee retirement plans, maintained by SUB or any of the predecessor organizations thereof, including but not limited to rights under any workers compensation program, Section 502(a) of the Employee Retirement Income Security Act, as amended, 29 U.S.C. Par. 1001 et seq., and under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"); c. arising out of enforcement of the Contracts or this Agreement by Executive; or d. constituting cross-claims against SUB as a result of claims brought by unaffiliated third parties against Executive based on Executive's service as an executive of SUB. The statutes which could form the basis for a WRONGFUL TERMINATION CLAIM include, but are not limited to, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Par. 1971 et seq.; the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Par. 621 et seq.; Section 510 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Par. 1001 et seq.; the Americans With Disabilities Act, as amended, 42 U.S.C. Par. 12101 et seq.; the Older Workers Benefit Protection Act, as amended, 29 U.S.C. Par. 621 et seq.; the Civil Rights Act of 1866, as amended, 42 U.S.C. Par. 1981 et seq.; the New Jersey Law Against Discrimination, as amended, N.J.S.A. 10:5- 1 et seq.; the New Jersey Conscientious Employee Protection Act, as amended, N.J.S.A. 34:19-1 et seq.; the New York Human Rights Law, Executive Law Par. 290 et seq.; the Pennsylvania Human Relations Act, as amended, 43 P.S. Par. 951 et seq.; and the Pennsylvania Whistleblower Law, as amended, 43 P.S. Par. 1421 et seq. The common law (non-statutory) theories under which a WRONGFUL TERMINATION CLAIM could be made include, but are not limited to, breach of an express employment contract, breach of a contract implied from a personnel handbook or manual, or commission of a civil wrong (known as a "tort") resulting in Executive's termination, or for alleged violation of the public policy of the United States or any state. Granting a RELEASE of any WRONGFUL TERMINATION CLAIM pursuant to this AGREEMENT means that on behalf of Executive and all who succeed to Executive's rights and responsibilities, Executive releases and gives up only any and all WRONGFUL TERMINATION CLAIMS that Executive may have against SUB, and any of its subsidiaries, affiliates or divisions, and all of their directors, officers, representatives, shareholders, agents, employees, and all who succeed to their rights and responsibilities (collectively referred to as "RELEASEES"). With respect to any charges filed concerning events or actions relating to a WRONGFUL TERMINATION CLAIM that occurred on or before the date of this AGREEMENT or Executive's Termination Date (whichever is later), Executive waives and releases any right that Executive may have to recover in any lawsuit or proceeding brought by Executive or by an administrative agency on Executive's behalf against the RELEASEES. 6. Covenant Not to Sue. Executive covenants not to sue the RELEASEES over any WRONGFUL TERMINATION CLAIM. Such a covenant not to sue the RELEASEES means that Executive represents that Executive has not through the date of execution of this Agreement filed a WRONGFUL TERMINATION CLAIM, charge or lawsuit with any court or government agency against the RELEASEES, and that Executive will not file such a lawsuit subsequent to execution of this Agreement. Executive also waives any right to become, and promises not to become, a member of any class in a case in which WRONGFUL TERMINATION CLAIMS are asserted against any of the RELEASEES. 7. Review Period. Executive acknowledges that Executive has up to 21 days to review this AGREEMENT, and was advised to review it with an attorney of Executive's choice. Executive also acknowledges that Executive was further advised that Executive has seven days after Executive signs this AGREEMENT to revoke it by notifying SUB in writing, of such revocation as set forth under Notices below. This AGREEMENT shall become effective on the tenth (10th) day following its execution by Executive (the "EFFECTIVE DATE"), unless revoked in accordance with the preceding sentence. 8. Revocation of Authority. Executive agrees and acknowledges that as of the Termination Date Executive shall no longer be empowered to bind SUB in any agreement, whether verbal or written, and that Executive shall have no authority to execute any documents, deeds, leases, or other contracts on behalf of SUB. To the extent not effected by termination of Executive under the Contracts, Executive resigns from all offices and positions with SUB. 9. Successors and Assigns. All rights and duties of SUB under this Agreement shall be binding on and inure to the benefit of SUB, its successors and assigns. All rights of Executive hereunder shall be binding upon and inure to the benefit of Executive's personal or legal representatives. 10. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally with receipt acknowledged or sent by registered or certified mail, postage prepaid or by reputable national overnight delivery service, to the addresses shown below, unless changed by notices given as herein provided, except that notice of change of address only shall be effective upon actual receipt: If to SUB, to: Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 Attention: Executive Vice President of Human Resources With a copy to: Summit Bancorp. 301 Carnegie Center P.O. Box 2066 Princeton, New Jersey 08543-2066 Attention: General Counsel If to the Executive, to: With a copy to: 11. Covenant Not to Challenge Enforceability. Both Executive and SUB understand that this AGREEMENT is final and binding when executed by both parties, subject to paragraph 7 above, and both agree not to thereafter challenge its enforceability. 12. Applicable Law. This AGREEMENT shall be deemed to have been made within the State of New Jersey, and it shall be interpreted, construed, and enforced in accordance with the law of the State of New Jersey, and before the Courts of the State of New Jersey. 13. Amendments, Modifications, Waivers. This AGREEMENT cannot be amended or modified except by a written document signed by both SUB and Executive and no provision can be waived except by a written document signed by the waiving party. 14. By signing this AGREEMENT, Executive acknowledges: a. EXECUTIVE HAS READ THIS AGREEMENT COMPLETELY. b. EXECUTIVE HAS HAD AN OPPORTUNITY TO CONSIDER THE TERMS OF THIS AGREEMENT. c. EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF EXECUTIVE'S CHOOSING PRIOR TO EXECUTING THIS AGREEMENT. d. EXECUTIVE KNOWS THAT EXECUTIVE MAY BE GIVING UP IMPORTANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT. e. EXECUTIVE UNDERSTANDS AND MEANS EVERYTHING THAT EXECUTIVE HAS SAID IN THIS AGREEMENT, AND EXECUTIVE AGREES TO ALL ITS TERMS. f. EXECUTIVE IS NOT RELYING ON SUB OR ANY REPRESENTATIVE OF SUB TO EXPLAIN THIS AGREEMENT AND RELEASE TO EXECUTIVE. EXECUTIVE HAS HAD AN OPPORTUNITY TO CONSULT AN ATTORNEY OR OTHER ADVISOR TO EXPLAIN THIS AGREEMENT AND ITS CONSEQUENCES TO EXECUTIVE BEFORE EXECUTIVE SIGNED IT, AND EXECUTIVE HAS AVAILED HIMSELF OR HERSELF OF THIS OPPORTUNITY TO WHATEVER EXTENT EXECUTIVE DESIRED. g. EXECUTIVE HAS SIGNED THIS AGREEMENT VOLUNTARILY AND ENTIRELY OF EXECUTIVE'S OWN FREE WILL, WITHOUT ANY PRESSURE FROM SUB OR ANY REPRESENTATIVE OF SUB, OR ANYONE ELSE. IN WITNESS WHEREOF, and intending to be legally bound hereby, this Agreement has been executed as of the day and year first above written. ATTEST: SUMMIT BANCORP. __________________________________ By: ____________________________________ Secretary Executive Vice President ____________________________________ EXECUTIVE ____________________________________ (Social Security Number) STATE OF NEW JERSEY: COUNTY OF _______________________: I certify that on this _______ day of ____________, _______ personally came before me _______________(Executive), who, being duly sworn, acknowledged under oath to my satisfaction that such person is named in and personally executed the foregoing Receipt and Release as such person's voluntary act and deed, for the purposes set forth therein. IN WITNESS WHEREOF, I have set my hand this ____ day of _____________, ______. By:___________________________________ Notary Public of the State of New Jersey My Commission expires __________________ EX-27 5
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH 31, 1998 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 3-MOS DEC-31-1998 MAR-31-1998 1,242,254 6,852 101,096 26,913 5,375,723 3,989,724 3,904,610 19,271,927 301,264 30,554,690 22,215,625 3,629,944 324,949 1,588,592 0 0 142,022 2,559,345 30,554,690 380,309 148,182 838 529,329 169,125 240,171 289,158 15,000 1,426 190,044 162,025 112,417 0 0 112,417 0.64 0.63 4.18 75,883 58,494 0 5,886 296,494 18,933 8,703 301,264 125,607 0 175,657
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