EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT ("Agreement")
made this 15th
day of
April 2008 by and between UNION CENTER NATIONAL BANK, a bank chartered under
the
laws of Congress ("UCNB"), CENTER BANCORP, INC., a New Jersey corporation that
owns all of the capital stock of UCNB (the "Company"), and XXXXXXX X. XXXXXXX
("Xxxxxxx"),
WITNESSETH
WHEREAS,
the
Company, UCNB and Xxxxxxx entered into an employment agreement originally dated
January 1, 1996 and amended as of January 1, 2007 providing for Xxxxxxx'x
employment in a subordinate position by the Company and UCNB (the "2007
agreement"); and
WHEREAS,
since
the
date of the 2007 agreement Xxxxxxx has been promoted to the position of
President and Chief Executive Officer of UCNB and the Company; and
WHEREAS,
the
parties hereto wish to cancel the 2007 agreement and enter into a new Agreement
to, among other things, reflect changes in the compensation and benefits
provided to Xxxxxxx as a result of his promotion and increased job duties and
responsibilities and to reflect changes in the overall management and
compensation paid to officers of UCNB; and
WHEREAS,
UCNB
and the Company desire to employ Xxxxxxx to devote his full time efforts to
the
business of UCNB and the Company, and Xxxxxxx desires to be so employed;
NOW
THEREFORE,
in
consideration of the terms and conditions set forth hereinafter, the parties
hereto agree as follows:
1. Employment:
UCNB
and
the Company agree to employ Xxxxxxx, and Xxxxxxx agrees to be so employed,
in
the capacity of the President and Chief Executive Officer of UCNB and the
Company.
2. Term
of Agreement:
The
term of this Agreement shall be for two
(2)
years
commencing on January 1, 2008 and ending on December 31, 2009. The term of
this
Agreement shall not automatically renew or be automatically extended beyond
December 31, 2009. Notwithstanding the foregoing, if a "Change in Control Event"
[as defined in Section 9(f) hereof] occurs at any time prior to December 31,
2009, then the term of the Agreement shall automatically be extended for a
period of three (3) years from the date of such Change in Control Event.
3. Time
and Effort. Xxxxxxx
shall diligently and conscientiously devote his full and exclusive time and
attention and best efforts in discharging his job duties and responsibilities
as
the President and Chief Executive Officer of UCNB and the Company and shall
perform all duties that may be assigned to him by the Board of UCNB or the
Company.
4. Compensation:
a.) Salary:
During
the term of this Agreement, Xxxxxxx shall receive an annual salary of TWO
HUNDRED TWENTY FIVE THOUSAND and 00/100 ($225,000.00) as compensation for his
services. The salary shall be paid in twenty four (24) semi-monthly installments
on the 15th
and
30th
day of
each month, or as near thereto as practicable. Xxxxxxx shall receive as
additional compensation $25,000.00 of stock in the Company, based upon the
then
current value of the stock. This stock shall be issued to Xxxxxxx on December
31
annually. If Xxxxxxx is terminated by the Company prior to year end, however,
he
shall be entitled to receive a stock in the Company in proportion to the time
he
was employed during that year before being terminated.
b). Bonuses.
Xxxxxxx
shall be entitled to participate in the Achievement Incentive Plan established
by UCNB and/or the Company (as it may be amended from time to time, the "AIP")
and shall receive incentive compensation in accordance with the terms of the
AIP. In the event that the AIP is terminated, Xxxxxxx shall receive such
incentive compensation as shall be awarded to him by the Executive Compensation
Committee.
5.. Expenses:
UCNB
and the
Company shall reimburse Xxxxxxx for
all
reasonable and necessary expenses incurred in carrying out his duties under
this
Agreement.
Xxxxxxx shall either (i) present to UCNB from time to time an itemized account
of
such
expenses in any form reasonably required by UCNB and the Company for
reimbursement;
or (ii) post such expenses to a credit card or other payment means issued to
Xxxxxxx
by UCNB
and the Company.
6.
Benefits:
a).
Automobile.
UCNB and
the Company shall
pay
to Xxxxxxx a monthly
allowance
of $900.00 plus $.30 per mile for his use of his personal automobile for
business purposes. Title to the automobile currently owned by UCNB and being
driven by and in the possession of Xxxxxxx shall be transferred from and sold
by
UCNB to him. Xxxxxxx shall pay UCNB $0 for the purchase and transfer of title
from UCNB to him. Xxxxxxx shall be responsible, however, for any costs or
expenses that may be incurred with the applicable state Motor Vehicle
Commission(s) in connection with the transfer of title from UCNB to him.
b) Miscellaneous
Benefits.
UCNB
and the
Company may also provide Xxxxxxx
with
those benefits that are generally provided to officers of UCNB and/or the
Company.
7.
Health
Insurance; and Other Plans.
UCNB
and the
Company shall provide Xxxxxxx with
health and life insurance and benefits under the Bank's 401(k) Plan to the
extent that such benefits are provided to him 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 Xxxxxxx shall be in accordance
with
the terms and conditions of such plans. Xxxxxxx shall also be entitled to all
accrued benefits from the previous pension, senior officer protection plan
and
other plans in which he was vested.
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8. Vacation.
Xxxxxxx
shall
receive annual vacations in conformity with UCNB
and
Company policies on vacations.
9. Termination
by UCNB Without Cause or by the Employee With and Without Good Reason;
Death.
(a) UCNB
and
the Company may, without "Cause" (as defined in Section 10), terminate this
Agreement at 'any time by giving 30 days' written notice to Xxxxxxx.
In such
event, Xxxxxxx, if requested by either UCNB 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 UCNB and the Company,
up
to the
date of termination. Xxxxxxx'x employment shall not be treated as having been
terminated
by UNCB or
the
Company without Cause merely because UCNB and the Company
provide notice of non-renewal of the term.
(b) Xxxxxxx
shall have the right to resign (and thereby terminate this Agreement)
with "Good Reason" (as defined in Section 9(f)) by delivering notice of such
resignation
to UCNB and the Company at least 30 days prior to the effective date of such
resignation.
(c)(I)
In the
event that Xxxxxxx'x employment is terminated pursuant to Section 9(a) or
Xxxxxxx resigns pursuant to Section 9(f) hereof, and subject to Section 9(e)
below and subject
to Xxxxxxx'x execution,
delivery and non-revocation of the Release, Xxxxxxx shall be entitled to: (i)
a
lump sum
payment equal to the product of (x) three (3) and (y) the sum of (1) Xxxxxxx'x
annual base salary as in effect immediately prior to the his termination or
resignation , (2) the largest annual cash bonus ever received by Xxxxxxx from
UCNB and/or the Company (the "Largest Bonus"), (3) the amount recorded
on Xxxxxxx'x W-2 (for the calendar year preceding the calendar year in which
his
termination or resignation occurs)
that is attributable to fringe benefits provided to Xxxxxxx by UCNB and/or
the Company, and (4)
the
maximum matching contribution that
could have been made under UCNB's 401(k) plan if Xxxxxxx had remained employed
by UCNB
and the
Company for an additional one (1) year following his
termination under Section 9(a) or his resignation pursuant to Section
9(f)
(the
"Severance
Payment" and together with the "Pension Severance Payment" described in
subparagraph
(c)(II) below, the "Combined Severance Payments"); and (ii) if Xxxxxxx timely
elects
COBRA coverage and provided Xxxxxxx continues to make contributions for such
continuation
coverage equal to Xxxxxxx'x contribution amount in effect immediately preceding
the
date
of Xxxxxxx'x termination of employment, UCNB and/or the Company, as applicable,
shall
waive the remaining portion of Xxxxxxx'x healthcare continuation payments under
COBRA
for
an eighteen (18)-month period following his termination under Section 9(a)
or
his resignation pursuant to Section 9(f); and (b) all stock options granted
to
Xxxxxxx by the Company shall be exercisable in full, effective as of the date
of
his termination under Section 9(a) or his resignation pursuant to Section
9(f).
Notwithstanding the foregoing, in the event that Xxxxxxx becomes eligible to
obtain alternate healthcare coverage from a new employer before the 18-month
anniversary of his
termination under Section 9(a) or his resignation pursuant to Section 9(f),
UCNB's and/or the Company's obligation to waive the remaining portion of
Xxxxxxx'x
healthcare continuation coverage under COBRA shall cease. Xxxxxxx understands
and
affirms that he is obligated to inform UCNB and the Company if he becomes
eligible to obtain alternate healthcare coverage from a new employer before
the
18-month
anniversary of his
termination under Section 9(a) or his resignation pursuant to Section
9(f).
In
addition, for a period of three years following his
termination under Section 9(a) or his resignation pursuant to Section 9(f),
UCNB
and the Company, at their expense, shall continue to provide Xxxxxxx
with
life
insurance coverage commensurate with the coverage that was being provided to
Xxxxxxx
immediately prior to the date of his termination under Section 9(a) or his
resignation pursuant to Section 9(f).
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(c)(II)
Within
thirty (30) days following the occurrence of his termination under Section
9(a)
or his resignation pursuant to Section 9(f), Xxxxxxx
shall,
subject to his execution, delivery and non-revocation of the Release, also
be
entitled to a lump sum payment equal to the excess, if any, of (x) the lump
sum
present value
of
the benefit that Xxxxxxx would have been entitled to under UCNB's
tax-qualified
defined benefit pension plan (the "Pension Plan") had he continued to be
employed by UCNB
and the
Company for an additional three (3) year period following his termination under
Section 9(a) or his resignation pursuant to Section 9(f) (assuming that he
continued during such period to receive a salary equal to the salary in effect
on the date of his termination or his resignation and an annual incentive bonus
equal to the Largest Bonus), over (y) the
lump
sum present value of the benefit that Xxxxxxx is entitled to under the Pension
Plan as
of the
date of Xxxxxxx'x termination or resignation from employment. Present value
calculations, for purposes
of the foregoing, shall be made in the manner used under the Pension Plan for
purposes of
determining lump sum distributions.
(c)(III)
The
Severance Payment (less applicable withholdings and deductions) shall
be
paid to Xxxxxxx in a lump sum on the next regular payroll date following the
8th
day
after
Xxxxxxx'x execution and delivery of the Release and the Pension Severance
Payment shall
be
paid in accordance with subparagraph (c)(II) above (but no earlier than the
8th
day
after
Xxxxxxx'x
execution and delivery of the Release); provided, however, that if necessary
to
comply
with the restriction in Section 409A(a)(2)(B) of the Internal Revenue Code
of
1986, as amended
(the "Code")
concerning payments to "specified employees," the Combined Severance
Payments
shall be made on the first business day of the seventh month following Xxxxxxx'x
termination
pursuant to Section 9(a) or Xxxxxxx resignation pursuant to Section 9(f).
(d) Notwithstanding
any provisions in this Agreement to the contrary, in the event that either
UCNB
or Company's independent public accounts or the Internal Revenue Service
determines that any payment, coverage or benefit (including the Severance
Payments, the Pension Severance Payment or the Combined Severance Payments)
provided to Xxxxxxx is subject to the excise tax imposed by Section 4999 (or
any
successor provision) of the Code ("Section 4999"), Xxxxxxx shall have no right
under this Agreement or otherwise to receive all or any portion of such
payments, coverage or benefit that if received would result in the imposition
of
the excise tax under Section 4999 ("Excess Benefit"), and neither UCNB nor
the
Company shall have any obligation to pay Xxxxxxx an Excess Benefit. If
notwithstanding the foregoing, UCNB or the Company pays Xxxxxxx the Excess
Benefit, Xxxxxxx shall promptly repay the Excess Benefit upon notice and demand
by UCNB or the Company. This Section 9(d) shall survive termination of this
Agreement.
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(e) The
Employee shall have no obligation to seek substitute employment or otherwise
mitigate UCNB and the Company's obligation to make the payments and provide
the
benefits described
in Section 9(b) hereof.
(f)
For
purposes of this Agreement, the term "Good Reason" shall mean a resignation
by Xxxxxxx within 180 days after (i) a materially adverse change in
Xxxxxxx'x
duties
as President and Chief Executive Officer of UCNB and the Company or Xxxxxxx'x
title as President and Chief Executive Officer
of UCNB
and the Company, (ii) a material breach of this Agreement by UCNB 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 UCNB or substantially all of the assets of the Company
or UCNB 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.
(g) Xxxxxxx
may, without Good Reason, terminate this Agreement by giving 60 days' written
notice to UCNB and the Company. In such event Xxxxxxx 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 UCNB up to the date of termination,
but
he shall not receive any severance allowance pursuant to this
Agreement.
(h) In
the
event that Xxxxxxx 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 UCNB that have accrued
through the date
of
death and subject to the terms of all applicable benefit plans (including
insurance plans) implemented by UCNB and the Company.
(i) Notwithstanding
anything contained herein to the contrary or the reason for
Xxxxxxx'x termination of employment, Xxxxxxx and his dependents and
beneficiaries shall
be
entitled to any and all benefits accrued through his date of termination, or
otherwise
available, under the benefit plans and arrangements referred to in Section
6
hereof in accordance with the terms of such benefit plans and
arrangements.
5
10.
Termination
with Cause.
(a)
UCNB and
Company may terminate this Agreement for "Cause" by giving
Xxxxxxx 30 days' written notice. In such event, UCNB and the Company shall
pay
Xxxxxxx
his
compensation, and Xxxxxxx shall continue to participate in all benefit plans
of
the Company and UCNB up to the date of termination, but UCNB and the Company
shall not
be
required to provide Xxxxxxx with any severance allowance pursuant to this
Agreement.
For purposes of this Agreement, "Cause" shall consist of the
following:
(i)
|
disloyal,
dishonest or felonious conduct of Xxxxxxx that materially adversely
affects UCNB or the Company; or
|
(ii)
|
termination
of UCNB's business due to unprofitability, insolvency, bankruptcy
or
directive by governmental
regulators.
|
Termination
for "Cause" shall not be construed to include the takeover of UCNB 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
UCNB
and the Company
shall give Xxxxxxx 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 Xxxxxxx'x receipt of such notice, he establishes that
either
the alleged acts did not occur or that such acts did not: constitute dishonest
or disloyal conduct, that such acts did not materially adversely affect the
Company and UCNB or that such
acts
have been fully corrected and shall not be repeated.
11. Restrictive
Covenant
Xxxxxxx
agrees that for a period of six (6) months subsequent to the termination
of
his
employment, he will not:
(a)
directly
or indirectly become employed by, engage or concern him in
any
manner whatsoever, in the carrying on or conducting of personal or commercial
banking as an owner, agent, servant, representative., or employee or as a member
of a partnership or as an officer, director or stockholder of any corporation,
in any manner whatsoever, in the Counties of Bergen, Essex, Hudson, Hunterdon,
Xxxxxx, Middlesex, Passaic, Somerset, Union, Xxxxxx and Xxxxxx in the State
of
New Jersey;
(b)
directly
or indirectly, solicit business from any customer of the UCNB
where the purpose thereof is to provide or offer to provide personal or
commercial banking services either for himself or for others; for the purposes
of this Agreement, customer shall be defined as any customer of the UNCB within
six (6) months of the date on which Xxxxxxx terminated his employment with
UCNB
and the Company;
(c)
directly
or indirectly, solicit, influence, contact or encourage any other "employee"
of UCNB of the Company to terminate his or her employment with UNCB or the
Company and to work for, to affiliate with or to contract with Xxxxxxx or any
entity with which Xxxxxxx is affiliated; and
6
(d)
disclose
to any person not employed by UCNB and/or the Company
any information concerning the business of UCNB or the Company, its methods
and
systems, or the names of its customers.
Xxxxxxx
acknowledges that a breach of this provision of the Agreement will
result in irreparable and continuing damage to UCNB and the Company for which
there will be no adequate remedy at law; and Xxxxxxx further agrees that any
violation of these restrictive covenants shall subject him to restraint in
a
court of competent jurisdiction and to such other relief, including but not
limited to reasonable attorneys fees incurred by UCNB and the Company, as the
court may deem proper. Xxxxxxx hereby waives any claim or defense that UCNB
and/or the Company has an adequate remedy at law or for which money could be
awarded
The
parties agree UCNB and the Company shall have the right to apply to the
Superior Court of New Jersey or any other court of competent jurisdiction for
the issuance of an appropriate restraining order if Xxxxxxx violates the
restrictive covenants contained in this Agreement. Enforcement of this
restrictive covenant shall be at the option of the Company and/or the Bank.
If
the Company and/or the Bank seek to enforce this option, Xxxxxxx shall be
continue to receive his full salary and benefits during the six month
restrictive covenant.
12.
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:
If
to
UCNB or the Company:
Union
Center National Bank
0000
Xxxxxx Xxxxxx
Xxxxx,
Xxx Xxxxxx
00000
Attention:
President
If
to
Employee:
Xxxxxxx
X. Xxxxxxx,
0000
Xxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
13. Indemnification;
Liability.
Xxxxxxx
shall be indemnified by UCNB 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 Xxxxxxx during the term of this Agreement. UNCB
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 UCNB that this Agreement is not enforceable
against
it shall not constitute a defense for the Company. The obligations of this
Section 12 shall survive termination of this Agreement with respect to acts
or
omissions occurring prior to such termination.
7
14. Governing
Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of New Jersey. The parties hereby consent to and submit to personal
jurisdiction over each of them in the Superior Court of New Jersey, Law
Division, Union County in any action or proceeding regarding this
Agreement.
15.
Entire
Contract. This
Agreement constitutes the entire understanding and
agreement among UCNB, the Company and Xxxxxxx 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.
16. 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.
17. Headings.
Headings
in this Agreement are for convenience only and shall not be used to interpret
or
construe its provisions.
18.
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
Xxxxxxx is subject to excise tax imposed by Section 4999 (or any successor
provision) of the Code ("Section 4999"), the Company and the Bank shall pay
to
Xxxxxxx no later than the 30th day thereafter (or the first business day
following such 30th day) 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 Xxxxxxx (determined without regard to any payments made to Xxxxxxx
pursuant to this Section 18) 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 Xxxxxxx 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 them imposed by Section 4999 of the Code,
it
being the intention of the parties hereto the Xxxxxxx'x net after tax position
be identical to that which would have been obtained had Sections 280G and 4999
not been part of the Code.
19. 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.
20. 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.
21. Prior
Contract.
This
Agreement supersedes in all respects all prior employment agreements between
UCNB, the Company and Xxxxxxx.
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IN
WITNESS WHEREOF, UCNB
and
the Company each have, by its appropriate
officers, signed and affixed its seal and Xxxxxxx has signed and sealed this
Agreement.
UNION CENTER NATIONAL BANK | CENTER BANCORP, INC. | |||
By: | /s/ Xxxxxxxxx X. Bol | By | /s/ Xxxxxxxxx X. Bol | |
Xxxxxxxxx Xxx, Chairman |
Xxxxxxxxx Xxx, Chairman |
/s/ Xxxxxxx X. Xxxxxxx | ||||
Xxxxxxx Wealgey |
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