Severamce Plan and Summary Plan Description




	





HUDSON UNITED BANCORP

SEVERANCE PLAN AND SUMMARY PLAN DESCRIPTION 















	





HUDSON UNITED BANCORP 

SEVERANCE PLAN AND SUMMARY PLAN DESCRIPTION 



INTRODUCTION 



        
        Hudson
United Bancorp (the “Company”) located at 1000 MacArthur Boulevard, Mahwah, New
Jersey 07430, Employer Identification Number: 22-2405746, hereby adopts the Hudson United
Bancorp Severance Plan (the “Plan”) effective December 1, 2004 for its eligible
employees. This document should be referred to in case a question arises under the Plan.
This document is intended to serve as the Plan document as well as the summary plan
description. If after reading the Plan you have any questions, please ask the Plan
Administrator identified on the last page. 



1.     Purpose
of the Plan  










	  	
The
Company established a severance plan known as the Hudson United Bancorp Severance Plan as
set forth in this document. The Plan was adopted by the Company to provide Severance Pay
to Employees whose employment with the Company terminates under the conditions provided
for by this Plan. The Plan is an unfunded employee welfare benefit plan. 






	  	
The
Company expects that our attention to providing differentiated service to our customers
will result in growth and full employment and that reductions in staff through layoffs
will not be necessary. However, if economic or business conditions create an unusual
situation that makes it necessary to cut back our work force, the need for each job will
be reviewed carefully. Also, each employee’s record will be reviewed. The needs of
the Company and employee qualifications, along with past performance of each employee,
will be the criteria upon which such decisions are made. 






	  	
There
shall be no duplication of Severance Pay under the Plan. This Plan supersedes all oral and
written severance policies or plans of the Company; provided, however severance benefits
provided under any individual Change in Control Agreements or individual employment
agreements shall be superseded only if agreed to by the individual, and, if not so agreed,
this Plan shall not apply to such individuals. 





	



     2.    
          Definitions. 














	  	
The
following terms when used herein shall have the following meanings unless a different
meaning is plainly required by the context: 






          	a.	 	
               “Plan Administrator” shall mean the named fiduciary appointed by the
               Committee. 


               



          	b.	 	
               “Base Salary” shall mean the amount the Participant is entitled to
               receive as wages or salary on an annualized basis, excluding all bonus,
               overtime, shift differential, or incentive compensation, payable by the Company
               as consideration for the Participant’s services, as determined on the date
               immediately preceding Termination. 


               











          	c.	 	
               “Committee” shall mean the Compensation Committee of the Board of
               Directors of the Hudson United Bancorp. 


               



          	d.	 	
               “Company” shall mean Hudson United Bancorp. 


               



          	e.	 	
               “Effective Date” shall mean December 1, 2004. 


               



          	f.	 	
               “Employee” for purposes of the Plan shall mean any full or part time
               employee of the Company on the Company’s payroll, excluding any individual
               who is paid by a third party and later reclassified as a common law employee of
               the Company, or any individual who the Company treats as an independent
               contractor even if such individual is later reclassified as a common law
               employee. 


               



          	g.	 	
               “Participant” shall mean an Employee who satisfies the eligibility
               requirements under Section 3a. of the Plan. 


               



          	h.	 	
               “Plan Year” shall mean the calendar year. 


               



          	i.	 	
               “Plan” shall mean this Hudson United Bancorp Severance Plan as amended
               from time to time. 


               



          	j.	 	
               “Severance Pay” shall mean any lump sum payment made to a Participant
               solely on account of eligibility to receive such payment under this Plan. 


               



          	k.	 	
               “Termination” shall mean the date an Employee ceases to actively
               perform services for the Company. 


               



          	l.	 	
               “Years of Service” shall mean the period of service with the Company
               commencing on the Participant’s most recent employment date and ending on
               the Participant’s date of Termination. Years of Service with a predecessor
               employer shall be taken into account only if so specified in the acquisition
               agreement with such predecessor employer. A completed Year of Service shall mean
               a 365 day period, ending on the anniversary of the employment date. 


               


	



3.     Severance
Pay —Eligibility  











	a. 	 	Eligibility 






	  	
Each
Employee of the Company on the Effective Date will automatically become a Participant in
this Plan. Each other Employee of the Company will become a Participant in the Plan
coincident with his or her date of hire. 





	



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	b. 	 	Terminations
Which Give Rise to Severance Pay 






	  	A
Participant is entitled to receive Severance Pay if the Company permanently terminates the
Participant’s employment due to (i) retrenchment; (ii) conversion of a full time
position to a part-time position (and the Participant refuses to accept said position); or
(iii) a reduction in force. In addition to the foregoing, a Participant may be entitled to
Severance Pay due to any other condition which the Company considers to be sufficient to
entitle an Employee to Severance Pay. 






	c. 	 	Terminations
Which Do Not Give Rise to Severance Pay 






	  	Notwithstanding
the foregoing, you are not entitled to receive Severance Pay if your employment is
terminated on account of death, disability, retirement, voluntary termination or gross
misconduct as determined by the Plan Administrator in his discretion. Gross misconduct is
generally defined as lying, stealing, disclosing confidential information, falsifying time
or expense reports, insubordination, violation of Company policies or procedures, gross
dereliction of duty or other conduct contrary to the Company’s interests. The Plan
Administrator, in his discretion, can deny Severance Pay for any other reason. 






	  	The
provisions of this Plan shall not be applicable in the event that an Employee’s
employment is terminated in connection with a sale of assets by the Company, or of any
subsidiary of the Company, provided that such Employee is offered substantially similar
employment at substantially the same salary by the purchaser of the assets and the assets
being sold are substantially those connected with the Employee’s employment. 






	d. 	 	Receipt
of Severance Pay 






	  	
Severance
Pay shall be payable as soon as practicable following the 7th day after the
Participant submits a signed and notarized General Release and Agreement to the Plan
Administrator. The receipt of any Severance Pay hereunder is conditioned on a written
release of all claims against the Company in the form provided by the Plan Administrator.
In addition, the receipt of Severance Pay hereunder is conditioned for the Chairman,
President, Chief Executive Officer and any Executive Vice President on the receipt of an
executed non-compete as further described below. 







	



4.     Amount of
Severance Pay  











	a. 	 	Non-officer
Severance Pay 






	  	Each
Participant who is not an officer of the Company shall receive Severance Pay in an amount
equal to one week of Base Salary for each completed Year of Service, not to exceed
twenty-six (26) weeks. 





	



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	b. 	 	Officer
Severance Pay 






	  	Each
Participant who is an Officer shall receive Severance Pay in an amount determined in
accordance with the following schedule: 






		
	All Officers up to and including Vice	- Five (5) weeks of Base Salary if the Participant has
	Presidents	completed between zero (0) and four (4) Years of
		Service;
		 
		- Ten (10) weeks of Base Salary if the Participant has
		completed between five (5) and nine (9) Years of
		Service;
		 
		- Twenty (20) weeks of Base Salary if the Participant
		has completed between ten (10) and fourteen (14)
		Years of Service; and
		 
		- Twenty six (26) weeks of Base Salary if the
		Participant has completed fifteen (15) Years of
		Service or more.
		 
	Senior/First Senior Vice Presidents	- Thirteen (13) weeks of Base Salary if the Participant
		has completed between zero (0) and four (4) Years of
		Service;
		 
		- Twenty six (26) weeks of Base Salary if the
		Participant has completed between five (5) and nine
		(9) Years of Service;
		 
		- Thirty nine (39) weeks of Base Salary if the
		Participant has completed between ten 10 and
		fourteen (14) Years of Service; and
		 
		- Fifty two (52) weeks of Base Salary if the
		Participant has completed fifteen (15) Years of
		Service or more.
		 
	Executive Vice President	- Twenty six (26) weeks of Base Salary if the
	President	Participant has completed between zero (0) and four
	Chief Executive Officer
Chairman	(4) Years of Service; and
	 
		 
		- Fifty two (52) weeks of Base Salary if the
		Participant has completed five (5) Years of Service
		or more.






	  	In
addition to the weeks of Base Salary set forth above, the Severance Pay for an Executive
Vice President, President, Chief Executive Officer and the Chairman shall include an
amount equal to the highest annual bonus received during or for the two calendar years
immediately preceding their date of Termination; provided, however, that the aggregate
Severance Pay shall in no event exceed two times the Participant’s Base Salary. 






	  	The
receipt of any Severance Pay by an Executive Vice President, President, Chief Executive
Officer or Chairman shall be conditioned upon such person entering into a binding
agreement with the Company providing that such person, for a period of two years following
the date of termination, shall not, for himself or on behalf of any other person or
entity, directly or indirectly, (i) be employed in any capacity or serve as a director or
consultant for a commercial bank, savings bank or savings association insured by the FDIC
in the States in which the Company (or any affiliate of the Company) maintains a branch or
office at the date of termination, or (ii) solicit, divert, take away or attempt to take
away any customers of the Company (or any affiliate of the Company) or the business of any
such customers or in any way interfere with, disrupt or attempt to disrupt any
then-existing relationships between the Company (or any affiliate of the Company) and any
of its customers. 





	



5.     Employee
Benefit Plan Coverage  












	  	The
Severance Pay described herein above shall be paid in a lump sum, less applicable taxes.
Severance Pay shall be in addition to, and not in lieu of, all other accrued or vested
benefits which may be owed to a Participant following termination including, but not,
limited to, accrued vacation pay, pension benefits, amounts or benefits payable under any
bonus or other compensation plan or contract, life insurance plan, health plan, or
disability plan. If an Employee has a contract providing specific severance
payments, he or she shall not be entitled to payments under this Plan unless such payments
are waived. 





	



6.     Funding  












	  	There
shall be no special fund out of which payments shall be paid, or shall Participants be
required to make a contribution as a condition of receiving payments. Payments shall be
made from the general funds of the Company. 





	



7.     Administration  











          	a.	 	
               The Plan shall be administered by the Plan Administrator, as the named fiduciary
               of the Plan under Section 3(16)(A) of the Employee Retirement Income Security
               Act of 1974, as amended (“ERISA”). The provisions of Part 4 of Title 1
               of ERISA are incorporated by reference as part of the Plan to define and govern
               the actions of the Plan Administrator and other fiduciaries hereunder. 


               



          	b.	 	
               The Plan Administrator will have full power to administer the Plan in all of its
               details, subject to applicable requirements of law. For this purpose, the Plan
               Administrator’s powers will include, but will not be limited to, the
               following authority, in addition to all other powers provided by this Plan. 


               


	



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               	(i)	 	
                    To make and enforce such rules and regulations as it deems necessary or proper
                    for the efficient administration of the Plan.


                    



               	(ii)	 	
                    To interpret the Plan, his interpretation thereof in good faith to be final and
                    conclusive on all persons claiming benefits under the Plan;


                    



               	(iii)	 	
                    To decide all questions concerning the Plan and the eligibility of any person to
                    participate in the Plan;


                    



               	(iv)	 	
                    To appoint such agents, counsel, accountants, consultants and other persons as
                    may be required to assist in administering the Plan; and


                    



               	(v)	 	
                    To allocate and delegate his responsibilities under the Plan and to designate
                    other persons to carry out any of its responsibilities under the Plan.


                    


	



8.     Claims
Procedures  











	  	
You
need not file a formal claim with the Plan Administrator in order to receive benefits
under the Plan. When an event occurs which entitles you to a distribution of Severance Pay
under the Plan, the Plan Administrator will automatically notify you regarding payment of
the benefit. 






	  	However,
if you disagree with the Plan Administrator’s determination of the amount of your
benefits under the Plan or with respect to any other decision the Plan Administrator may
make regarding your interest in the Plan, the Plan contains the appeal procedure you
should follow. 






	  	In
brief, if the Plan Administrator determines he should deny benefits to you, the Plan
Administrator will give you adequate notice. The Plan Administrator, in most cases, will
make a decision within 90 days of the receipt of your claim unless special circumstances
would make the rendering of a decision within the 90 days period infeasible. If an
extension is required, written notice must be sent to your prior to the end of the initial
90 day period. The extension notice must indicate the special circumstances requiring the
extension, and provide the time and date by which the Plan Administrator expects to render
a determination based on its review. In any event, the Plan Administrator must render a
decision within 180 days after its receipt of your claim for benefits. 






	  	The
written notice will set forth (i) the specific reasons for the denial; (ii) the pertinent
provisions of the Plan supporting the Plan Administrator’s decision; (iii) a
description of any additional material or information necessary for you to perfect your
claim and an explanation as to why such additional material or information is necessary;
and (iv) a description of the Plan’s review procedures and time limits applicable to
such procedures, including a statement informing you of your right to bring a civil suit
under Section 502(a) of ERISA in the event of an adverse benefit determination upon
review. 





	



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	  	If
you disagree with the Plan Administrator, you, or a duly authorized representative, must
appeal the adverse determination in writing to the Plan Administrator within 60 days after
the receipt of the notice of denial of benefits. If you fail to appeal a denial within the
60 day period, the Plan Administrator’s determination will be final and binding. If
you appeal to the Plan Administrator, you or your duly authorized representative must
submit the issues and comments you feel are pertinent to permit the Plan Administrator to
re-examine all facts and make a final determination with respect to the denial. The Plan
Administrator, in most cases, will make a decision within 60 days of a request on appeal
unless special circumstances would make the rendering of a decision within the 60 day
period infeasible. If an extension is required, written notice must be sent to your prior
to the end of the initial 60 day period. The extension notice must indicate the special
circumstances requiring the extension, and provide the time and date by which the Plan
Administrator expects to render a determination based on its review. In any event, the
Plan Administrator must render a decision within 120 days after its receipt of a request
for review. 






	  	The
Plan Administrator must provide you with written notice of its benefit determination upon
review. In the event that there is an adverse benefit determination, the Plan
Administrator will give adequate notice in writing setting forth (i) the specific reasons
for the adverse determination; (ii) the pertinent provisions of the Plan supporting the
Plan Administrator’s decision; (iii) your entitlement to receive copies of or have
reasonable access to all documents, records, and other information relevant to your claim
for benefits upon your request free of charge; and (iv) a statement informing you of your
right to bring a civil suit under Section 502(a) of ERISA. 





	



9.     Statement
of ERISA Rights  











	  	As
a Participant in the Plan, you are entitled to certain rights and protections under ERISA.
ERISA provides that all Plan Participants shall be entitled to: 






          	(1)	 	
               Examine without charge, at the Plan Administrator’s office and at other
               specific locations, such as worksites, all documents governing the Plan and
               copies of all documents filed by the Plan with the U.S. Department of Labor,
               such as, latest annual reports (Form 5500 series) and Plan descriptions. 


               



          	(2)	 	
               Obtain copies of all Plan documents and other Plan information upon written
               request to the Plan Administrator. The Plan Administrator may make a reasonable
               charge for the copies. 


               



	  	Receive
a summary of the Plan’s annual financial report. The Plan Administrator is required
by law to furnish each Participant with a copy of this summary annual report. 






	  	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” of the Plan, have a duty to do so prudently and
in the interest of you and other Plan Participants and dependents. No one, including your
employer, or any other person, may fire you or otherwise discriminate against you in any
way to prevent you from obtaining a plan benefit, or exercising your rights under ERISA.
If your claim for a benefit is denied or ignored, in whole or in part, you must receive a
written explanation of the reason for denial. You have the right to obtain copies of
documents related to your benefit decision without charge. You have the right to have the
Plan review and reconsider your claim within certain time schedules. 





	



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	  	Under
ERISA, there are steps you can take to enforce the above rights. For instance, if you
request materials from the Plan, such as the Plan document or the latest annual report,
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 $110 a day until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the Plan 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 the 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 a 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, or if you need
assistance in obtaining documents from the Plan Administrator, you should contact the
nearest area Office of the Employee Benefits Security Administration (“EBSA”),
U.S. Department of Labor listed in your telephone directory or the Division of Technical
Assistance and Inquiries, EBSA, U.S. Department of Labor 200 Constitution Avenue, NW
Washington, D.C. 20210. You may also obtain certain publications about your rights and
responsibilities under ERISA by calling the publications hotline of the EBSA. 





	



10.     No Right
to Employment  











	  	This
Plan does not give any Participant the right to be employed by the Company. The Company
expressly reserves the right to discharge any Participant for any reason not prohibited by
law. 





	



11.     Alienation
of Benefits  











	  	Except
as otherwise provided by law and by contract governing any benefit offered under this
Plan, no benefit under the Plan may be voluntarily or involuntarily assigned or alienated. 







	



12.     Termination or Amendment  












	  	Although
the Company intends to maintain the Plan for an indefinite period, the Company reserves
the right to amend any of the Plan terms or terminate the Plan at any time, for any
reason. Any amendment shall be adopted by written resolution of the Company or its
delegee. Any termination or partial termination of the Plan shall not adversely affect the
payment of benefits to which Participants were entitled under the terms of the Plan prior
to the date of termination or partial termination. 






	



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13.     Taxes  












	  	The
Company may withhold from any payment due under this Plan any taxes required to be
withheld under applicable federal, state or local tax laws or regulations. 






	




14.     Governing
Law  











	  	This
Plan shall be governed by the laws of the State of New Jersey, except to the extent
superseded by federal law. 





		
	Plan Administrator:	Hudson United Bancorp
		1000 MacArthur Boulevard
		Mahwah, NJ 07430
		201-236-2600
		201-236-2669
	 	 
	Type of Administration:	Self-administered.
	 	 
	Agent for Legal Process:	Plan Administrator:
		Hudson United Bancorp
		1000 MacArthur Boulevard
		Mahwah, NJ 07430
	 	 
	Plan Number:	507
	 	 
	Plan Year End:	December 31





	



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