CHANGE IN CONTROL, CONFIDENTIALITY AND NON-COMPETE AGREEMENT
EXHIBIT
10.2
CHANGE
IN CONTROL, CONFIDENTIALITY
This
Agreement is made as of November
13, 2007 (the “Effective Date”), between Greater Community Bank (the “Bank”), a
New Jersey commercial banking corporation, Greater Community Bancorp (“GCB”), a
New Jersey business corporation (hereinafter collectively referred to as “the
Company”) and Xxxxxxx X. Xxxxxx (the “Executive”).
WHEREAS,
it is
anticipated the Executive will be a valued employee of the Company;
and
WHEREAS,
the Company
desires to enter into this Agreement with the Executive to provide the Executive
with contractual assurances to induce the Executive to remain as an employee
of
the Company notwithstanding the possibility, threat or occurrence of a Change
in
Control (as defined below) of the Company, provided that the Executive remains
in the position of Chief Financial Officer at the time of a Change in
Control;
WHEREAS,
the Company
desires to enter into this Agreement with the Executive regarding obligations
of
confidentiality and competition during and following employment;
NOW,
THEREFORE, in
consideration of the mutual covenants and agreements contained herein and
Company’s employment of Executive as an at-will employee, the Executive and the
Company agree as follows:
1. Duties. The
Company hereby employs Executive, on an at-will basis, as Chief Financial
Officer with all powers and authority as are customary to this position, and
Executive hereby accepts employment with the Company. Executive shall
have such executive responsibilities as is customary with this position and
as
the Company's Board of Directors shall from time to time assign to
him. Executive agrees to devote his full time (excluding annual
vacation time), skill, knowledge, and attention to the business of the Company
and the performance of his duties under this Agreement.
2. Change-In-Control.
a. Change-In-Control
defined. As used in this Agreement, a “Change in Control”
means:
(1) the
acquisition by any person (other than GCB) of ownership or power to vote more
than thirty three and one third percent (33⅓%) of GCB's or the Bank's voting
stock;
(2) the
acquisition by any person (other than GCB) of the control of the election of
a
majority of GCB's or the Bank's directors;
(3) the
exercise of a controlling influence over the management or policies of GCB
or
the Bank by any person (other than GCB) or by persons acting as a group within
the meaning of §13(d) of the Securities Exchange Act of 1934; or
(4) during
any period of two consecutive years, individuals who at the beginning of such
two (2) year period constitute the Board of Directors of GCB (the “Company
Board”) (the “Continuing Directors”) cease for any reason to constitute at least
two-thirds (⅔) thereof, provided that any individual whose election or
nomination for election as a member of the Company Board was approved by a
vote
of at least two-thirds (⅔) of the Continuing Directors then in office shall be
considered a Continuing Director.
It
is the
understanding of the parties that the merger or consolidation of the Bank with
one or more banking subsidiaries of GCB shall not be considered a “Change in
Control” for purposes of this Agreement.
b. “Person”
defined. As used in this Agreement, the term “person” means an
individual (other than the Executive), corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
herein.
c. “Just
Cause”. As used in this Agreement, “Just Cause” shall exist when
there has been a determination by GCB's or the Bank's Board of Directors in
its sole discretion that there shall have occurred one or more of the following
events with respect to the Executive:
(1) dishonesty
arising from or relating to Executive’s position;
(2) commission
of an act that causes or that probably will cause economic damage to the Company
or injury to their business reputation arising from or relating to Executive’s
position;
(3) misconduct
arising from or relating to Executive’s position;
(4) breach
of fiduciary duty;
|
|
(5)
|
failure
to perform stated duties;
|
-
2
-
(6) violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease and desist order; or
(7) breach
of any provision of this Agreement.
d. Involuntary
Termination After Change in Control. Notwithstanding any
provision herein to the contrary, if, in connection with or within twelve (12)
months after any “Change in Control” of the Company, the Executive’s employment
under this Agreement is terminated by the Company without the Executive’s prior
written consent and for a reason other than Just Cause, the Executive shall
be
paid an amount equal to one (1) times his base annual salary, less that amount
of base salary, excluding any bonuses, actually paid after the Change in
Control, and subject to ordinary tax withholdings, provided Executive executes
a
waiver and release agreement regarding employment related claims in a form
satisfactory to the Company; however, Executive will not receive this payment
if
the Company was placed in conservatorship or receivership in connection with
such Change in Control and the Board of Directors of the Company determines
in
good faith that the Change in Control was directed by or otherwise required
by
the FDIC. In no event, may the aggregate amount payable hereunder
equal or exceed the difference between (i) the product of 2.99 times the
Executive’s “base amount” as defined in Section 280G(b)(3) of the Code and
regulations promulgated thereunder, and (ii) the sum of any other parachute
payments (as defined under Section 280G(b)(2) of the Code) that the Executive
receives on account of the change in control. Such amount shall be
paid in a lump sum, less applicable tax withholdings within ten (10) days of
the
effective date of the waiver and release agreement.
e. Voluntary
Termination After Change in Control. Notwithstanding any other
provision of this Agreement to the contrary, the Executive may voluntarily
terminate his employment under this Agreement within twelve (12) months
following a Change in Control of GCB or the Bank if “Good Reason” for such
termination exists that is not corrected within 30 days following written notice
thereof to the Company by the Executive, such notice to state with specificity
the basis upon which Good Reason exists. In the event, Good Reason
exists and it is not corrected, the Executive shall thereupon be entitled to
receive the payment described in Paragraph 2(d) of this Agreement once again
provided that Executive executes waiver and release agreement regarding
employment related claims in a form satisfactory to the Company; however,
Executive will not receive this payment if the Company was placed in
conservatorship or receivership in connection with such Change in Control and
the Board of Directors of the Company determines in good faith that the Change
in Control was directed by or otherwise required by the FDIC. For
purposes of this Agreement, “Good Reason” shall mean, unless done with the
consent of the Executive, the assignment of duties materially inconsistent
with
the Executive’s position as the Chief Financial Officer; his duties and
responsibilities immediately prior to the Change in Control; a material
reduction in the Executive’s base salary as in effect at the time of the Change
in Control; the Company’s requiring the Executive to be based anywhere other
than within thirty (30) miles of the Executive’s office location at the time of
the Change in Control, except for required travel on the Company’s business to
an extent substantially consistent with the Executive’s business travel
obligations for his position.
-
3
-
f. Tax
Issues. In the event that the severance benefits payable to the
Executive under this section or any other payments or benefits received or
to be
received by the Executive from the Company (whether payable pursuant to the
terms of this Agreement, any other plan, agreement or arrangement with the
Company) or any corporation (“Affiliate”) affiliated with the Company within the
meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the
“Code”), in the advice of tax counsel selected by the Company and reasonably
acceptable to the Executive, constitute “parachute payments” within the meaning
of Section 280G(b)(2) of the Code, such severance benefits shall be reduced
to
an amount the present value of which (when combined with the present value
of
any other payments or benefits otherwise received or to be received by the
Executive from the Company (or an Affiliate) that are deemed “parachute
payments”) is equal to $1 less than the total amount permitted under Section
280(b)(2) without triggering such tax, notwithstanding any other provision
to
the contrary in this Agreement. The severance benefits shall not be
reduced to the extent that (A) the Executive shall have effectively waived
his
receipt or enjoyment of any such payment or benefit which triggered the
applicability of this section, or (B) in the opinion of tax advisor, the
severance benefits (in their full amount or as partially reduced, as the case
may be) plus all other payments or benefits which constitute “parachute
payments” within the meaning of Section 280G(b)(2) of the Code are reasonable
compensation for services actually rendered, within the meaning of Section
280G(b)(4) of the Code, and such payments are deductible by the
Company. The Base Amount shall include every type and form of
compensation includable in the Executive's gross income in respect of his
employment by the Company (or an Affiliate), except to the extent otherwise
provided in temporary or final regulations promulgated under Section 280G(b)
of
the Code. For purposes of this section only, a Change in Control
shall have the meaning of a “change in ownership or control” as set forth in
Section 280G(b) of the Code and any temporary or final regulations promulgated
thereunder. The present value of any non-cash benefit or any deferred
cash payment shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(b)(3) and (4) of the
Code.
In
the
event that Section 280G, or any successor statute, is repealed, this Section
shall cease to be effective on the effective date of such repeal. The
parties to this Agreement recognize that regulations or interpretations under
Section 280G of the Code may affect the amounts that may be paid under this
Agreement and agree that, upon issuance of such regulations or interpretations,
this Agreement may be deemed modified as in good faith deemed necessary in
light
of the provisions of such regulations to achieve the purposes of this Agreement,
and that consent to such modifications shall not be unreasonably
withheld.
3. Confidentiality
of Information.
a. As
used herein, the term “Confidential Information and Materials” refers to all
information which derives independent economic value from not being generally
known outside the Company and belongs to, is used by or is in
the
-
4
-
possession
of the Company, including without limitation information
concerning the Company's products, strategic plans, pricing, cost data
and cost structures, training methods and programs, Executive performance and
compensation information, computer pass wording, recruiting, know-how, research
and development, operation or financial status of the Company, the names or
addresses of any of the Company’s customers, borrowers and depositors, any
information concerning or obtained from such customers, borrowers and depositors
and other confidential technical or business information and data and any
background data that suggest any of the foregoing plans and programs.
Confidential Information shall not include any information that the Executive
can demonstrate is in the public domain by means other than disclosure by the
Executive, but shall include non-public compilations, combinations or analyses
of otherwise public information.
b. Executive
hereby acknowledges that all of the Confidential Information and Materials
are
and shall continue to be the exclusive proprietary property of the Company,
whether or not prepared in whole or in part by the Executive and whether or
not
disclosed to or entrusted to the custody of the Executive. Executive further
acknowledges that all Confidential Information and Materials (to which Executive
will have access or which Executive will learn during the Executive’s
employment) will be disclosed to Executive solely by virtue of the Executive’s
employment with the Company and solely for the purpose of assisting
Executive in performing the Executive’s duties for the
Company.
c. The
Company will as part of the employment of Executive make available
Confidential Information and Materials as defined above, provided that Executive
agrees that Executive will not, either during the course of the Executive’s
employment with the Company or for two (2) years thereafter, disclose
any Confidential Information or Materials of the Company, in whole or in part,
to any person or entity outside The Company, for any reason or purpose
whatsoever, unless the Company shall have given its written consent to such
disclosure. Executive further agrees that the Executive shall not during the
period set forth above use in any manner other than for and in the course of
Executive’s furtherance of the Company’s business, any Confidential Information
or Materials of The Company for Executive’s own purposes or for the benefit of
any other person or entity except the Company, whether such use consists of
the
duplication, removal, oral use or disclosure, or the transfer of any
Confidential Information or Materials in any manner, or such other unauthorized
use in whatever manner, unless the Company shall have given its prior written
consent to such use. The restrictions set forth in this paragraph are in
addition to and not in lieu of any obligations of Executive provided by law
with
respect to the Company’s Confidential Information and Materials, including any
obligations Executive may owe under statutes governing trade
secrets.
4. Non-competition
and Inventions.
-
5
-
a. During
the period of employment of Executive and for a period of one year after
Executive's termination of employment for any reason, Executive shall not
directly or indirectly:
(i) Be
employed by, engaged in or participate in the ownership, management, operation
or control of, or act in any advisory or other capacity for, any Competing
Entity which conducts its business within the Territory (as the terms Competing
Entity and Territory are hereinafter defined); provided, however, that
notwithstanding the foregoing, Executive may make solely passive investments
in
any Competing Entity the common stock of which is “publicly held” and of which
Executive shall not own or control, directly or indirectly, in the aggregate
securities which constitute 5% or more of the voting rights or equity ownership
thereof;
(ii) solicit
or divert any business or any customer from the Company or assist any person,
firm or corporation in doing so or attempting to do so;
(iii) cause
or seek to cause any person, firm or corporation to refrain from dealing or
doing business with the Company or assist any person, firm or corporation in
doing so; or
(iv) solicit
for employment, or advise or recommend to any other person that they employ
or
solicit for employment or retention as an employee or consultant, any person
who
is an employee of, or exclusive consultant to, the Company.
For
purposes of this Section, the term “Competing Entity” shall mean any entity
which is a bank holding company, bank, savings association or mortgage company,
or which is presently or hereafter engaged in the business of offering products
or services competing with those offered by the Company or any of its banking
subsidiaries in Passaic County and Bergen County, New Jersey. The
term “Territory” shall mean Passaic County and Bergen County, New
Jersey.
b. Executive
acknowledges and agrees that the covenants set forth in this Section are founded
on valuable consideration and are reasonable and necessary in all respects
for
the protection of the Company’s legitimate business interests (including without
limitation the Company’s confidential, proprietary information and trade secrets
and client good-will, which represents a significant portion of the Company’s
net worth and in which the Company has a property
interest). Executive acknowledges and agrees that, in the event that
he breaches any of the covenants set forth in this Section, the Company may
be
irreparably harmed and may not have an adequate remedy at law; and, therefore,
in the event of such a breach, the Company shall be entitled to injunctive
relief, in addition to (and not exclusive of) any other remedies (including
monetary damages) to which the Company may be entitled under law. If
any covenant set forth in this Section is deemed invalid or unenforceable for
any reason, it is the Parties’ intention that such covenants be equitably
reformed or modified
-
6
-
to
the
extent necessary (and only to such extent to) render it valid and enforceable
in
all respects. In the event that the time period and geographic scope
referenced above is deemed unreasonable, overbroad, or otherwise invalid, it
is
the Parties’ intention that the enforcing court shall reduce or modify the time
period and/or geographic scope to the extent necessary (and only to such extent
necessary) to render such covenants reasonable, valid, and enforceable in all
respects.
c. The
Executive hereby sells, transfers and assigns to the Company the entire right,
title and interest of the Executive in and to all inventions, ideas, disclosures
and improvements, whether patented or unpatented, and copyrightable materials,
made or conceived by the Executive, solely or jointly, or in whole or in part,
during the period Executive is bound by this Agreement which (i) relate to
methods, apparatus, designs, products, processes or devices sold, leased, used
or under construction or development by the Company or any subsidiary or (ii)
otherwise relate to or pertain to the business, functions or operations of
the
Company or any subsidiary, or (iii) arise (wholly or partly) from the efforts
of
the Executive during the Term hereof in connection with his performance of
his
duties hereunder. The Executive shall communicate promptly and
disclose to the Company, in such form as the Company requests, all information,
details and data pertaining to the aforementioned inventions, ideas, disclosures
and improvements; and, whether during the term hereof or thereafter, the
Executive shall execute and deliver to the Company such formal transfers and
assignments and such other papers and documents as may be required of the
Executive to permit the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereon. This
provision does not relate to any invention for which (i) no equipment, supplies,
facilities or trade secret information of the Company was used and which was
developed entirely on the Executive’s own time and which does not relate (A)
directly to the business of the Company, or (B) to the Company’s actual or
demonstrably anticipated research or development; or (ii) does not result in
any
work performed by the Executive for the Company.
5. Miscellaneous.
a. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New Jersey, without reference to principles of conflict
of
laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
b. All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If
to the Executive, to his address
appearing on the records of the Company.
If
to the Company:
-
7
-
Greater
Community Bank
00
Xxxxx Xxxx.
Xxxxxx,
Xxx
Xxxxxx 00000
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
c. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
d. The
Company may withhold from any amounts payable under this Agreement such federal,
state, local or foreign taxes as shall be required to be withheld pursuant
to
any applicable law or regulation.
e. The
Executive's or the Company's failure to insist upon strict compliance with
any
provisions hereof or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for
cause
pursuant to this Agreement, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.
f. The
Executive and the Company acknowledge that the employment of the Executive
by
the Company is “at will” and the Executive's employment may be terminated by the
Company or Executive at any time for any reason, in which case the Executive
shall have no further rights under this Agreement but his obligations under
it
shall continue.
g. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same instrument.
h. If
the Company sells, leases, exchanges or otherwise disposes of, in a single
transaction or series of related transactions, all or substantially all of
its
property and assets, or if the Company ceases to exist as a separate entity
as a
result of a merger or otherwise, then the Company will, as a condition precedent
to any such transaction, cause effective provision to be made so that the person
or entity acquiring such property and assets or succeeding to the business
of
the Company as the surviving entity of a merger or otherwise, as applicable,
becomes bound by, and replaces the Company under, this Agreement.
6. Injunctive
Relief. Executive acknowledges and agrees that irreparable injury
will result to the Company in the event Executive breaches any covenant
contained in this Agreement and that the remedy at law for such breach will
be
inadequate. Therefore, if Executive engages in any act in violation
of the provisions of this Agreement, the Company shall be entitled, in addition
to such other remedies and
-
8
-
damages
as may be available to it by law or under this Agreement, to injunctive or
other
equitable relief to enforce the provisions hereof.
7. Waiver. In
exchange for the eligibility to receive the benefits provided in this Agreement,
Executive hereby waives any and all claims Executive may have or assert against
the Company and/or its employees, affiliates, directors and agents (the
“Released Parties”), whether known or unknown, asserted or unasserted, arising
out of your employment with the Company and based on any fact or circumstance
existing as of the effective date of this Agreement, including (without
limitation) all claims against any Released Party based on any express or
implied contract, any state or federal Constitutional provision, any government
regulations, any tort, any common law of any state, and any waivable right
or
benefit provided by any federal, state, or local discrimination or employment
law or statute (including the Age Discrimination in Employment Act, Title VII
of
the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family
and Medical Leave Act, the New Jersey Law Against Discrimination, the New Jersey
Family Leave Act, and the New Jersey Conscientious Employee Protection
Act). Executive is hereby advised to consult with an attorney before
signing this document. Executive has up to twenty-one (21) days from
the date Executive received this document to consider this offer. If
Executive chooses to sign the Agreement, Executive will have an additional
seven
(7) days following the date of Executive’s signature to revoke the Agreement and
the Agreement shall not become effective or enforceable until the revocation
period has expired. Any revocation must be in writing and must be
received by the Bank within the seven (7) day revocation period.
-
9
-
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
|
GREATER
COMMUNITY BANK
|
||
|
By:
|
/s/
Xxxxxxx X. Xxxxx, Xx.
|
|
|
Xxxxxxx
X. Xxxxx, Xx.
|
||
|
Chairman,
President and
|
||
|
Chief
Executive Officer
|
||
|
EXECUTIVE
|
||
|
/s/
Xxxxxxx X. Xxxxxx
|
||
|
Xxxxxxx
X. Xxxxxx
|
||
|
Senior
Vice President, Treasurer
|
||
|
and
Chief Financial Officer
|
||
-
10
-
