EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement") made as of this ____ day of
October, 1999, by and between XXXXXXX X. XXXXXX, an individual residing at 000 X
Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Employee") and UNITY BANK, a New
Jersey state bank, with its principal place of business located at 00 Xxx
Xxxxxxx 00, Xxxxxxx, Xxx Xxxxxx 00000 ("Employer").
WHEREAS, Employer wishes to employ Employee as its Executive Vice President
and Chief Operating Officer;
WHEREAS, the Employee agrees to be employed pursuant to the terms and
conditions of this Agreement; and
WHEREAS, Employer is the wholly owned subsidiary of Unity Bancorp, Inc., a
New Jersey corporation (the "Company").
NOW, THEREFORE, in consideration of the premises and covenants contained
herein, and with the intent to be legally bound hereby, the parties hereto
hereby agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ the Employee, and the
Employee hereby accepts such employment, upon the terms and conditions set forth
herein.
2. POSITION AND DUTIES. The Employee shall be employed as Executive Vice
President and Chief Operating Officer of the Employer, to perform such services
in that capacity as are usual and customary for comparable institutions and as
shall from time to time be established by the Chief Executive Officer or the
Board of Directors of the Employer. Employee agrees that he will devote his full
business time and efforts to his duties hereunder.
3. CASH COMPENSATION. Employer shall pay to the Employee compensation for
his services as follows:
(a) Base Salary. The Employee shall be entitled to receive, commencing upon
the date of this Agreement, an annual base salary (the "Base Salary") of
$250,000 which shall be payable in installments in accordance with Employer's
usual payroll method. Annually thereafter, on or prior to the anniversary date
of this Agreement, the Board of Directors shall review the Employee's
performance, the status of Employer and such other factors as the Board of
Directors or a committee thereof shall deem appropriate, and may, but shall not
be obligated to, adjust the Base Salary accordingly.
(b) Performance Bonus. The Employee and Employer shall jointly negotiate
mutually acceptable performance criteria for the period ending March 31, 2000.
Upon satisfaction of these criteria, the Employee shall be entitled to receive a
cash bonus in the amount of $125,000. The Employee and Employer shall review
Employee's performance by April 25, 2000 to determine whether Employee has
satisfied the performance criteria, and Employer shall promptly pay the
performance bonus thereafter.
(c) Override Commission. In addition to the Base Salary and any bonus paid
to Employee hereunder, the Employer agrees to pay Employee a commission equal to
25 basis points of the guaranteed portion of all Small Business Administration
loans originated after January 1, 2000, and closed by Employer during the term
of this Agreement, up to a maximum commission of $75,000 per year; provided that
such loans bear interest rates and have terms comparable to loans actually sold
in the secondary market.
(d) Relocation Expenses. Upon the presentation by Employee to Employer of
receipts sufficient to establish expenses incurred, Employer shall reimburse
Employee for all necessary expenses incurred in relocating to New Jersey for the
purpose of commencing employment under this Agreement, up to a maximum
reimbursement of $10,000.
4. OTHER BENEFITS.
(a) Fringe Benefits. Employee shall be entitled to participate in such
benefit programs as are made available generally to employees of Employer.
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(b) Life Insurance. Employer shall obtain for the benefit of Employee life
insurance on the life of Employee in the amount of two and one-half times
Employee's annual Base salary.
(c) Stock Options. Employer and Employee shall negotiate a mutually
acceptable plan for the grant of options to Employee to purchase the common
stock of the Company, which grant will be effective on the first anniversary of
this Agreement.
5. TERM. The initial term of this Agreement shall be two years, commencing
upon the date hereof and continuing until the second anniversary hereof;
provided, however, that on each annual anniversary, the term of this Agreement
shall be extended by one twelve month period, unless within ninety days prior to
an anniversary date of this Agreement, either the Employee or Employer shall
have provided the other with written notice of its intention to cease extending
the term of this Agreement.
6. TERMINATION.
(a) Cause. As used in this Agreement, the term "Cause" shall mean any of
the following actions: the Employee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation or final cease-and-desist order or a material breach of any provision
of this Agreement.
(b) Termination With Cause. Employer shall have the right to terminate the
Employee for Cause, upon written notice to him of such determination, specifying
the alleged Cause. In the event of such termination, the Employee shall not be
entitled to any further benefits under this Agreement; provided, however, that
nothing contained herein shall excuse Employer from paying all benefits earned
or accrued up to the date of such termination.
(c) Termination Without Cause. If Employer terminates the Employee's
employment hereunder without Cause during the first year of this Agreement, the
Employee shall be entitled to receive his then current Base Salary for twelve
(12) months. If any such
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termination occurs during the second year of this Agreement, the Employee shall
be entitled to receive his then current Base Salary, pro rated, for a period of
nine (9) months. Thereafter, if Employee's employment is terminated without
Cause, Employee will be entitled to receive his then current Base Salary, pro
rated, for a period of three (3) months. Any such payments may be made over such
period in periodic payments in the same manner in which the Employee's salary
was paid through the time of such termination, or by a lump sum payment of the
discounted present value of all Base Salary payments through such period. The
determination of the method of payment shall be made by Employer. In determining
the discounted present value of any lump sum payments provided for hereunder,
Employer shall use an interest rate equal to the three (3) year U.S. Treasury
constant maturity rate for the month preceding the termination of Employee's
employment, as shown in Federal Reserve Statistical Release H.15. In addition,
to the extent Employee participated in Employer's hospital, health, medical and
life insurance programs as of the date of such termination, Employer shall
continue to provide employee with such benefits through such payment period. If
the Employee obtains new employment and such new employment provides for
hospital, health, medical and life insurance, and other benefits, in a manner
substantially similar to the benefits payable by Employer hereunder, Employer
may permanently terminate the duplicative benefits it is obligated to provide
hereunder.
(d) Death or Disability. This Agreement shall terminate upon Employee's
death or his disability, as defined herein. Upon Employee's death or his
disability, the obligation of Employer hereunder to pay Employee the
compensation called for under Section 3 hereof shall terminate, and Employer's
only obligation shall be to pay Employee any and all benefits to which Employee
was entitled at the time of such death or disability under any benefit plans of
Employer then in place. For purposes of this Agreement, the term "disability"
shall mean Employee's inability to substantially perform his material duties as
prescribed in this Agreement due to his incapacity or disability, physical or
mental, for a period of six (6) consecutive months, which, following a written
request by either Employer or Employee, shall be determined by
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agreement between the parties hereto and, if the parties cannot agree, by a
panel (the "Panel") of three (3) physicians, one of whom will be selected by
Employer, one by Employee and the third will be selected by the first two
physicians so selected. Executive shall be entitled to receive his full salary
and benefits under this Agreement until the date of the Panel's determination.
The Panel's determination shall be conclusive.
7. CHANGE IN CONTROL.
(a) Upon the occurrence of a Change in Control (as herein defined),
Employee shall have the right, within sixty (60) days, upon written notice to
the Employer, to terminate his employment hereunder and the provisions of
Section 7(c) shall apply as if the Employee had been terminated.
(b) A "Change in Control" shall mean:
(1) a reorganization, merger, consolidation or sale of all or
substantially all of the assets of the Company, or a similar
transaction in which the Company is not the resulting entity;
(2) individuals who constitute the Incumbent Board (as herein
defined) of the Company cease for any reason to constitute a
majority thereof;
(3) the occurrence of any transaction requiring the approval of the
Board of Governors of the Federal Reserve System under 12 C.F.R.
ss.225.41 et seq., except a transaction by any party owning 10%
or more of the Company's outstanding stock as of the date hereof;
or
(4) an event of a nature that would be required to be reported in
response to Item I of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or
(5) Without limitation, a change in control shall be deemed to have
occurred at such time as (i) any "person" (as the term is used in
Section 13(d) and 14(d) of the Exchange Act) other than the
Company is or becomes a "beneficial owner" (as defined in Rule
13-d under the Exchange Act) directly or indirectly, of
securities of the Company representing 25% or more of the
Company's outstanding securities ordinarily having the right to
vote at the
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election of directors, excluding any securities purchased by
Employer's employee stock ownership plan and trust, or any other
employee benefit plans established by Employer from time to time
in determining whether such person is the beneficial owner of
more than 25% of Employer's securities; or
(6) A proxy statement soliciting proxies from stockholders of the
Company is disseminated by someone other than the current
management of the Company, seeking stockholder approval of a plan
of reorganization, merger or consolidation of the Company or
similar transaction with one or more corporations as a result of
which the outstanding shares of the class of securities then
subject to the plan or transaction are exchanged or converted
into cash or property or securities not issued by the Company;
(7) A tender offer is made for 25% or more of the voting securities
of the Company and the shareholders owning beneficially or of
record 25% or more of the outstanding securities of the Company
have tendered or offered to sell their shares pursuant to such
tender offer and such tendered shares have been accepted by the
tender offeror.
For these purposes, "Incumbent Board" means the Board of Directors of the
Company on the date hereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by members or stockholders was approved by the same
nominating committee serving under an Incumbent Board, shall be considered as
though he were a member of the Incumbent Board.
(c) Upon Employee's termination of his employment pursuant to Section 7(c),
Employee shall be entitled to receive a lump sum payment equal to his then
current Base Salary. In addition, Employer shall be obligated to maintain all
policies of insurance then covering Employee for a term of one (1) year after
such termination
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8. COVENANT NOT TO COMPETE. Employee agrees that during the term of his
employment hereunder and for a period of one (1) year after the termination of
his employment, he will not in any way, directly or indirectly, manage, operate,
control, accept employment or a consulting position with or otherwise advise or
assist or be connected with or own or have any other interest in or right with
respect to (other than through ownership of not more than five percent (5%) of
the outstanding shares of a corporation whose stock is listed on a national
securities exchange or on the National Association of Securities Dealers
Automated Quotation System) any enterprise which competes with Employer in the
business of banking in the geographic areas in which Employer conducts its
business on the date of Employee's termination. In the event that this covenant
not to compete shall be found by a court of competent jurisdiction to be invalid
or unenforceable as against public policy, such court shall exercise discretion
in reforming such covenant to the end that Employee shall be subject to a
covenant not to compete that is reasonable under the circumstances and
enforceable by Employer. Employee agrees to be bound by any such modified
covenant not to compete.
9. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and interpreted
under the substantive law of the State of New Jersey.
(b) Severability. If any provision of this Agreement shall be held to be
invalid, void, or unenforceable, the remaining provisions hereof shall in no way
be affected or impaired, and such remaining provisions shall remain in full
force and effect.
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(c) Entire Agreement; Amendment. This Agreement sets forth the entire
understanding of the parties with regarding to the subject matter contained
herein and supersedes any and all prior agreements, arrangements or
understandings relating to the subject matter hereof and may only be amended by
written agreement signed by both parties hereto or their duly authorized
representatives.
(d) Notices hereunder shall be sent by Certified Mail, Return Receipt
Requested, to the address set forth for each party on the first page of this
Agreement. Notices to Employer shall be directed to the attention of the
Chairman of the Board.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
UNITY BANK
By:/s/ XXXXXX VAN VOLKENBURGH
--------------------------
Xxxxxx Van Volkenburgh, Chairman
EMPLOYEE:
/s/ XXXXXXX X. XXXXXX
--------------------------
Xxxxxxx X. Xxxxxx
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