EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement") made as of this 1st day of
April, 1999, by and between XXXXXX X. VAN VOLKENBURGH, an individual residing at
0 Xxxxxxxx Xxxx, Xxxxxxx, XX (the "Employee") and UNITY BANCORP, INC., a
Delaware corporation with its principal place of business located at 00 Xxx
Xxxxxxx 00, Xxxxxxx, Xxx Xxxxxx 00000 (the "Company" or "Employer").
WHEREAS, Employer wishes to employ Employee as its Chairman of the Board
and Chief Executive Officer.
WHEREAS, the Employee agrees to be employed pursuant to the terms and
conditions of this Agreement;
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. Company 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 the Chairman of
the Board and Chief Executive Officer of the Company, 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 Board of Directors of the Company.
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
$280,000 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 shall adjust the
Base Salary accordingly.
(b) Discretionary Bonus. At or prior to commencement of this Agreement,
the Employee and the Board of Directors of Employer or a committee thereof shall
meet and establish performance criteria for the Employee. Based upon the
Employee's satisfaction of such criteria, the Employee shall be entitled to
receive annually a bonus, the amount to be agreed upon by the Board of Directors
or a committee thereof and the Employee, with reference to, among other factors,
the bonus paid to Employee in the prior year. The Employee and the Board of
Directors or a committee thereof shall meet annually on or prior to the
anniversary date of the Employment Agreement to review the Employee's
performance and to mutually agree upon new performance criteria for the upcoming
year.
4. OTHER BENEFITS.
(a) Supplemental Retirement Plan. Employer shall establish a supplemental
retirement plan (the "SRP"), in addition to its existing 401(k) retirement plan,
for the benefit of the Employee. The form and amount of the SRP shall be as
agreed upon between Employer and the Employee and shall recognize the Employee's
prior service to Employer.
(b) Fringe Benefits. Employee shall be entitled to participate in
Employer's benefit programs as shall be agreed between Employee and the
Company's Board of Directors.
5. TERM. The initial term of this Agreement shall be three years,
commencing upon the date hereof and continuing until the third anniversary
hereof; provided, however, that annually, 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 their 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 which has a material adverse impact upon the Employer: 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.
Notwithstanding the above, the Employee shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a
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resolution duly adopted by the affirmative vote of not less than three-fourths
of the members of the Board of Directors of the Company at a meeting of the
Board called and held for that purpose (after reasonable notice to the Employee
and an opportunity for him, together with counsel, to be heard before such Board
of Directors), finding that in the good faith opinion of the Board of Directors,
the Employee was guilty of conduct justifying termination for Cause and
specifying the particulars thereof in detail.
(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 prior to the term of this Agreement, the
Employee shall be entitled to receive his then current Base Salary for a period
of thirty six (36) months. Such payment 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. In addition to such
payments, Employee shall be entitled to receive an amount (the "Tax Payment")
sufficient to pay all federal, state and local taxes owing on such amounts. The
determination of the method of payment shall be made mutually by Employer and
the Employee; provided, however, that in the event the parties cannot agree on
the method of payment, Employer shall be entitled to choose. 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. The
Employee shall have no duty to mitigate damages in connection with his
termination by Employer without Cause. However, if the Employee obtains new
employment
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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.
7. RESIGNATION FOR CAUSE. During the term of this Agreement, the Employee
shall be entitled to resign from his employment with Employer, and receive the
payments provided for below, in the event that the Employee is not in breach of
this Agreement and Employer (i) reassigns the Employee to a position of lesser
rank or status than Chairman of the Board and Chief Executive Officer, (ii)
relocates the Employee's principal place of employment by more than thirty miles
from its location on the date hereof, or (iii) reduces the Employee's
compensation or other benefits. Upon the occurrence of any of these events, the
Employee shall have thirty days to provide Employer notice of his intention to
terminate this Agreement. In the event the Employee elects to so terminate this
Agreement, such termination shall be treated as a termination without Cause by
Employer under Section 6(c) hereof, and the Employee shall be entitled to
receive all payments and other benefits called for under such Section 6(c).
8. CHANGE IN CONTROL.
(a) Upon the occurrence of a Change in Control (as herein defined),
Employee shall have the right, within sixty (60) days, to terminate his
employment hereunder and the provisions of Section 6(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
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(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
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 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.
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9. 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.
10. 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.
(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
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hereof and may only be amended by written agreement signed by both parties
hereto or their duly authorized representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
UNITY BANCORP, INC.
By: /s/ Xxxx Xxxxxxxx
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XXXX XXXXXXXX, PRESIDENT
EMPLOYEE:
/s/ Xxxxxx X. Van Wolkenburgh
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XXXXXX X. VAN VOLKENBURGH
