AGREEMENT
THIS
AGREEMENT
(“Agreement”), dated as of January 1, 2003, by and among THE UNION CENTER
NATIONAL BANK, a bank chartered under the laws of Congress (the “Bank”), CENTER
BANCORP INC., a New Jersey corporation that owns all of the capital stock of the
Bank (the “Company”), and XXXX X. XXXXXXX (“Employee”),
W
I T N E S S E T H
:
WHEREAS, the
Company, the Bank and the Employee desire to enter into an employment agreement
providing for the Employee's employment by the Company and the
Bank;
WHEREAS, the
Bank and/or the Company have adopted certain benefit plans, including the
following plans: (i) an Achievement Incentive Plan (as it may be amended from
time to time, the "AIP"), (ii) a split dollar insurance plan (as it may be
amended from time to time, the “SDIP”) and (iii) a 401(k) Savings Plan (as it
may be amended from time to time, the “401(k)Plan” and, together with the AIP
and the SDIP, the “Plans”);
WHEREAS,
it is
understood that the Company shall remain fully liable hereunder, regardless of
the extent to which the Bank is liable hereunder; and
WHEREAS, the
Bank and the Company desire to employ Employee to devote full time to the
business of the Bank and the Company, and Employee desires to be so
employed,
NOW,
THEREFORE, in
consideration of the mutual covenants set forth herein, the parties hereto
hereby agree as follows:
1. Employment. Bank
and the Company agree to employ Employee, and Employee agrees to be so employed,
in the capacity of Senior Vice President of the Bank and Vice President of the
Company. Except as otherwise provided in the next sentence of this Section 1,
employment shall be for a term of three (3) years, effective as of January 1,
2003 and terminating December 31, 2005 (the “Initial Term”). Notwithstanding the
foregoing, this Agreement shall automatically be extended (i) at the end of the
Initial Term, for successive one year renewal terms unless, at least two years
prior to the commencement of any such renewal term, notice of termination of
this Agreement is given by any party hereto to the other parties hereto and (ii)
if a “Change in Control Event” (as defined in Section 8(a) hereof) occurs at any
time during the Initial Term or during any such renewal term, for a period of
three years from the date of such Change in Control Event. It is understood that
the effect of the immediately preceding sentence is to assure Employee that in
the event that he receives notice of termination of employment pursuant to
Section 8(a) hereunder, he will be entitled to severance benefits covering at
least two full years of employment in the absence of a Change in Control Event
or covering at least three full years of employment in the case of a Change in
Control Event.
2. Time
and Efforts.
Employee shall diligently and conscientiously devote his full and exclusive time
and attention and best efforts in discharging his duties as a Senior Vice
President of the Bank and as a Vice President of the Company.
3. Board
of Directors. Employee
shall at all times discharge his duties in consultation with and under the
supervision of the President and the Boards of Directors of the Bank and the
Company. In the performance of his duties, Employee shall make his principal
office in such place as the President of the Bank and the Company and Employee
may from time to time mutually agree.
4.
Compensation.
(a) Salary-Initial
Period. During
the period from January 1, 2003 through December 31, 2003 (the “Initial
Period”), Employee shall receive, pursuant to the determination of the Executive
Compensation Committee of the Bank's Board of Directors (the "Executive
Compensation Committee"), as compensation for his services hereunder, a salary
at the rate of one hundred thousand dollars ($100,000) per annum. This amount
shall be paid in twenty four (24) equal semi-monthly installments on the 15th
and 30th day of each month, or as near thereto as practicable.
(b) Salary-Subsequent
Years. During
each twelve month period following the Initial Period, Employee shall receive,
as compensation for his services, his salary set forth for the immediately
preceding twelve month period plus such salary increment as shall be determined
by the Executive Compensation Committee, with reference to the Bank's salary
guide. During each such twelve month period, Employee's salary shall be paid in
twenty-four (24) equal semi-monthly installments on the 15th and 30th day of
each month, or as near thereto as practicable.
-2-
(c) Bonuses.
Employee
shall be entitled to participate in the AIP and shall receive incentive
compensation in accordance with the terms of the AIP. In the event that the AIP
is terminated, Employee shall receive such incentive compensation as shall be
awarded to him by the Executive Compensation Committee.
5. Expenses;
Benefits.
(a) Reimbursement. The Bank
and the Company shall reimburse Employee for all reasonable and necessary
expenses incurred in carrying out his duties under this Agreement. Employee
shall either (i) present to the Bank from time to time an itemized account of
such expenses in any form reasonably required by the Bank and the Company for
reimbursement; or (ii) post such expenses to a credit card or other payment
means issued to Employee by the Bank and the Company.
(b) Automobile. The
Bank and the Company recognize the Employee's need for an automobile for
business purposes. The Bank and the Company, therefore, shall provide (without
expense to Employee) the Employee with an automobile, including all related
maintenance, repairs, insurance, and other costs, for business and personal use
and shall reimburse the Employee for all taxes payable by his as a result of the
provision of this benefit to the Employee. The automobile shall be the
automobile last provided to the Employee and the related costs shall be
comparable to those which the Bank provided to the Employee during the last six
months of 2002.
-3-
(c) Miscellaneous
Benefits. The
Bank and the Company shall provide Employee with all benefits that are generally
provided to officers of the Bank and/or the Company, other than the
President.
6. Health
Insurance; Life Insurance; Disability Insurance; Pension; and Other
Plans. The
Bank and the Company shall provide Employee with life insurance, disability
insurance, health insurance, pension benefits and benefits under the SDIP and
the 401(k) Plan to the extent that such benefits are provided to Employee on the
date hereof, together with any benefit enhancements that may be added to such
plans in the future. The monetary amount of such benefits received by Employee
shall be in accordance with the terms and conditions of such plans.
7. Vacation. Employee
shall receive annual vacations in conformity with Bank and Company policies on
vacations.
8. Termination
by the Bank Without Cause or by the Employee With and Without Good Reason;
Death.
(a) The Bank
and the Company may, without “Cause” (as defined herein), terminate this
Agreement at any time by giving 30 days' written notice to the Employee. In such
event, (i) the Employee, if requested by either the Bank or the Company, shall
continue to render services, and regardless of whether such request is made,
shall be paid his regular compensation and shall continue to participate in all
benefit plans of the Company and the Bank, up to the date of termination, (ii)
the Employee shall be paid in a single sum, on the date of termination, a
severance allowance equal to Employee's regular compensation for the duration of
the term of this Agreement, as theretofore renewed pursuant to Section 1 hereof,
less all amounts required to be withheld and deducted, (iii) the Employee shall
be paid in a single sum, on the date of termination, an amount equal to the
largest annual benefit received by Employee under the AIP since the commencement
of the AIP (the “Largest Bonus”) multiplied by the number of years (rounded to
the nearest tenth of a year) remaining in the term of this Agreement, as
theretofore renewed pursuant to Section 1 hereof; (iv) the Employee shall be
entitled to receive, during the period commencing on the date of termination and
ending on the last day of the term (as theretofore renewed pursuant to Section 1
hereof) (the “Extension Period”), the same benefits (or the economic equivalent
thereof) that he would have received under the SDIP, the 401(k) Plan and the
other benefit plans described in Section 6 hereof had he remained employed by
the Bank during the Extension Period (assuming a salary equal to the salary in
effect on the date of termination and an annual incentive under the AIP equal to
the Largest Bonus), (v) the Bank and the Company shall fund the obligations set
forth in the immediately preceding clause (iv) and (vi) all stock options
granted to Employee by the Company shall be exercisable in full, effective as of
the date of termination.
-4-
(b) The
Employee shall have the right to resign (and thereby terminate this Agreement)
with “Good Reason” (as defined herein) by delivering notice of such resignation
to the Bank and the Company at least 30 days prior to the effective date of such
resignation. If, prior to the expiration of the term hereof (as theretofore
renewed pursuant to Section 1 hereof), the Employee shall resign for Good
Reason, the Employee shall be entitled to the same benefits that he would have
received pursuant to Section 8(a) hereof had his employment been terminated (on
the effective date of such resignation) by the Bank or the Company without
Cause.
(c) The
Employee shall have no obligation to seek substitute employment or otherwise
mitigate the Company's obligation to make the payments and provide the benefits
described in Sections 8(a) and 8(b) hereof; provided, however, that in the event
that (i) Employee's employment terminates prior to a Change in Control Event and
(ii) Employee obtains other employment, then the salary and benefits which he
actually receives pursuant to such other employment shall be offset against the
Employer's obligations hereunder.
(d) For
purposes of this Agreement, the term "Good Reason" shall mean a resignation by
the Employee within 180 days after (i) a materially adverse change in the
Employee's duties or title, (ii) a material breach of this Agreement by the Bank
or the Company, (iii) the consummation of an acquisition by a third party of a
majority of the voting capital stock of the Company or the Bank or substantially
all of the assets of the Company or the Bank or (iv) a change in the composition
of the Board of Directors of the Company such that the “Continuing Directors”
(as defined herein) no longer constitute a majority of the Board (the events
referred to in clauses “iii” and “iv” being referred to herein as “Change in
Control Events”). For purposes of this Agreement, the term “Continuing Director”
shall mean (i) each current member of the Company's Board of Directors and (ii)
each person who is hereinafter first nominated to such Board by unanimous vote
of the persons who then constitute Continuing Directors.
(e) The
Employee may, without Good Reason, terminate this Agreement by giving 60 days'
written notice to the Bank and the Company. In such event, the Employee shall
continue to render his services, shall be paid his regular compensation and
shall continue to participate in all benefit plans of the Company and the Bank
up to the date of termination, but he shall not receive any severance allowance
pursuant to this Agreement.
(f) In the
event that the Employee dies during the term of this Agreement as theretofore
renewed pursuant to Section 1 hereof, this Agreement shall terminate as of the
date of his death, subject to the obligations of the Company and the Bank that
have accrued through the date of death and subject to the terms of all
applicable benefit plans (including insurance plans) implemented by the Bank and
the Company.
9. Termination
with Cause.
(a) The Bank
and Company may terminate this Agreement for “Cause” by giving Employee 30 days'
written notice. In such event, the Bank and the Company shall pay Employee his
compensation, and Employee shall continue to participate in all benefit plans of
the Company and the Bank, up to the date of termination, but the Bank and the
Company shall not be required to provide the Employee with any severance
allowance pursuant to this Agreement. For purposes of this Agreement, “Cause”
shall consist of the following:
-5-
(i) disloyal,
dishonest or felonious conduct of Employee that materially adversely affects the
Bank or the Company; or
(ii) termination
of the Bank's business due to unprofitability, insolvency, bankruptcy or
directive by governmental regulators.
Termination
for “Cause” shall not be construed to include the takeover of the Bank or the
Company, in either a hostile or voluntary manner, by another person, firm or
corporation.
(b) Notwithstanding
the foregoing, in the event that termination is intended as a result of alleged
disloyal or dishonest conduct, the Boards of Directors of the Bank and the
Company shall give the Employee written notice of the occurrence of (and the
facts and circumstances surrounding) the acts allegedly constituting “Cause” and
a fair opportunity to present his position to such Boards. Such event shall not
constitute “Cause” if, no later than ten (10) business days following Employee's
receipt of such notice, the Employee establishes that either the alleged acts
did not occur, that such acts did not constitute dishonest or disloyal conduct,
that such acts did not materially adversely affect the Company and the Bank or
that such acts have been fully corrected and shall not be repeated.
10. Notices. All
notices required or permitted to be given under this Agreement shall be given by
certified mail, return receipt requested, to the parties at the following
addresses, or to such other addresses as either may designate in writing to the
other party:
-6-
If to the
Bank or the Company:
Union
Center National Bank
0000
Xxxxxx Xxxxxx
Xxxxx,
Xxx Xxxxxx 00000
Attention:
President
If to
Employee:
Xxxx X.
Xxxxxxx
c/o Union
Center National Bank
0000
Xxxxxx Xxxxxx
Xxxxx,
Xxx Xxxxxx 00000
11. Indemnification;
Liability.
Employee shall be indemnified by the Bank and the Company to the maximum extent
permitted by law (and shall be entitled to receive advances to the maximum
extent permitted by law) with respect to all actions and all decisions not to
act taken by Employee during the term of this Agreement. The Bank and Company
shall be jointly and severally liable under this Agreement with respect to all
obligations of either such party hereunder. Any defense available to the Bank
that this Agreement is not enforceable against it shall not constitute a defense
for the Company. The obligations of this Section 11 shall survive termination of
this Agreement with respect to acts or omissions occurring prior to such
termination.
12. Governing
Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of New Jersey.
13. Entire
Contract. This
Agreement constitutes the entire understanding and agreement among the Bank, the
Company and Employee with regard to all matters set forth herein. There are no
other agreements, conditions or representations, oral or written, express or
implied, with regard thereto. This Agreement may be amended only in writing,
signed by all parties.
14. Non-Waiver. A delay
or failure by any party to exercise a right under this Agreement, or a partial
or single exercise of that right, shall not constitute a waiver of that or any
other right.
15. Headings.
Headings
in this Agreement are for convenience only and shall not be used to interpret or
construe its provisions.
16. Taxes. In the
event that either the Company's independent public accountants or the Internal
Revenue Service determines that any payment, coverage or benefit provided to
Employee is subject to the excise tax imposed by Section 4999 (or any successor
provision) of the Internal Revenue Code of 1986, as amended (“Section 4999”),
the Company and the Bank, within 30 days thereafter, shall pay to Employee, in
addition to any other payment, coverage or benefit due and owing hereunder, an
amount determined by multiplying the rate of excise tax then imposed by Section
4999 by the amount of the “excess parachute payment” received by Employee
(determined without regard to any payments made to Employee pursuant to this
Section 16) and dividing the product so obtained by the amount obtained by
subtracting the aggregate local, state and Federal income tax rate applicable to
the receipt by Employee of the "excess parachute payment" (taking into account
the deductibility for Federal income tax purposes of the payment of state and
local income taxes thereon) from the amount obtained by subtracting from 1.00
the rate of excise tax then imposed by Section 4999 of the Code, it being the
intention of the parties hereto that Employee's net after tax position be
identical to that which would have obtained had Sections 28OG and 4999 not been
part of the Internal Revenue Code of 1986, as amended.
-7-
17. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
18. Binding
Effect. The
provisions of this Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns.
IN
WITNESS WHEREOF, the
Bank and the Company each have, by its appropriate officers, signed and affixed
its seal and Employee has signed and sealed this Agreement.
| THE UNION CENTER NATIONAL BANK | |
| By: /s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx, President | |
| CENTER BANCORP INC. | |
| By: /s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx, President | |
| /s/ Xxxx X. Xxxxxxx | |
| Xxxx X. Xxxxxxx | |
-8-
