CENTER BANCORP, INC. Non-Competition Agreement For JAMES W. SORGE
CENTER
BANCORP, INC.
For
▇▇▇▇▇ ▇. ▇▇▇▇▇
This
Non-Competition Agreement (this “Agreement”) is
entered into as of this 2nd day
of December, 2010, by and between Center Bancorp, Inc. (the “Company”),
and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (the “Executive”).
Whereas,
Executive is an employee of Union Center National Bank, (the “Bank”), who has
been employed to provide guidance, leadership, and direction in the growth,
management, and development of the Company and the Bank and has learned trade
secrets, confidential procedures and information, and technical and sensitive
plans of the Company and the Bank,
Whereas,
the Company desires to restrict, after the Executive’s separation from service
with the Company and the Bank, the Executive’s availability to other employers
or entities that compete with the Company or the Bank,
Now Therefore,
in consideration of these premises, the mutual promises and undertakings set
forth in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Executive and the Company
hereby agree as follows.
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1.
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Administration
of this Agreement.
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(a) Administrator duties.
This Agreement shall be administered by the Company’s board of directors or by
such committee or person as the board shall appoint (the “Administrator”). The
Executive may not be a member of the Administrator. The Administrator shall have
the discretion and authority to (x) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Agreement and
(y) decide or resolve any and all questions that may arise, including
interpretations of this Agreement.
(b) Agents. In the
administration of this Agreement the Administrator may employ agents and
delegate to them such administrative duties as it sees fit (including acting
through a duly appointed representative) and may from time to time consult with
counsel, who may be counsel to the Company.
(c) Binding effect of
decisions. The decision or action of the Administrator concerning any
question arising out of the administration, interpretation, and application of
this Agreement and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any interest in this
Agreement.
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(d) Indemnity of
Administrator. The Company shall indemnify and hold harmless the members
of the Administrator against any and all claims, losses, damages, expenses, or
liabilities arising from any action or failure to act with respect to this
Agreement, except in the case of willful misconduct by the Administrator or any
of its members. No individual shall be liable while acting as Administrator for
any action or determination made in good faith regarding this Agreement, and any
such individual shall be entitled to indemnification and reimbursement in the
manner provided in the Company’s Charter and Bylaws and under applicable
law.
(e) Information. To
enable the Administrator to perform its functions, the Company shall supply full
and timely information to the Administrator on all matters relating to the date
and circumstances of the separation from service of the Executive and such other
pertinent information as the Administrator may reasonably require.
(f) Action by the
Administrator. In addition to acting at a meeting in accordance with
applicable laws, any action of the Administrator concerning this Agreement may
be taken by a written instrument signed by the Administrator (including, if the
Company’s board of directors or a board committee serves as the
Administrator, by written consent in accordance with New Jersey law and the
Charter and Bylaws of the Company, and any such action so taken by written
consent shall be effective as if it had been taken by a majority of the members
at a meeting duly called and held).
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2.
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Definitions
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(a) Affiliate shall mean
the Bank and any entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with the
Company.
(b) Change in Control
shall mean a change in the ownership or effective control of the Company, or in
the ownership of a substantial portion of the assets of the Company, as such
change is defined under the default definition in Treasury Regulation
§1.409A-3(i)(5) or any subsequently applicable Treasury Regulation.
(c) Code shall mean the
Internal Revenue Code of 1986, as amended, or any successor statute, rule or
regulation of similar effect.
(d) Confidential
Information shall mean all business and other information relating to the
business of the Employer, including without limitation, technical or
nontechnical data, programs, methods, techniques, processes, financial data,
financial plans, product plans, and lists of actual or potential customers,
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other Persons,
and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy or confidentiality. Such information and compilations of
information shall be contractually subject to protection under this Agreement
whether or not such information constitutes a trade secret and is separately
protectable at law or in equity as a trade secret. Confidential Information does
not include confidential business information, which does not constitute a trade
secret under applicable law one year after any expiration or termination of this
Agreement.
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(e) Customer shall mean
any individual, joint venturer, entity of any sort, or other business partner of
the Company or the Bank with, for, or to whom the Company or the Bank has
provided financial products or services during the final two years of the
Executive’s employment with the Company or the Bank, or any individual, joint
venturer, entity of any sort, or business partner whom the Company or the Bank
has identified as a prospective customer of financial products or services
within the final year of the Executive’s employment with the Company or the
Bank.
(f) Disability or
Disabled means the Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months or (ii) is by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Employer.
(g)
Financial products or
services shall mean any product or service that a financial institution
or a financial holding company could offer by engaging in any activity that is
financial in nature or incidental to such a financial activity under Section
4(k) of the Bank Holding Company Act of 1956 and that is offered by the Company,
the Bank, or an affiliate on the date of the Executive’s employment termination,
including but not limited to banking activities and activities that are closely
related and a proper incident to banking, or other products or services of the
type in which the Executive was involved during the Executive’s employment with
the Company or the Bank.
(h) Person shall mean any
individual, corporation, limited liability Employer, bank, partnership, joint
venture, association, joint-stock Employer, trust, unincorporated organization
or other entity.
(i)
Specified
Employee means an employee who at the time of Termination of Employment
is a key employee of the Employer, if any stock of the Employer is publicly
traded on an established securities market or otherwise. For purposes of this
Agreement, an employee is a key employee if the employee meets the requirements
of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the
regulations thereunder and disregarding section 416(i)(5)) at any time during
the 12-month period ending on December 31 (the “identification period”). If the
employee is a key employee during an identification period, the employee is
treated as a key employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of April following the close of the
identification period.
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(j) Termination of
Employment with the Employer means
that the Executive shall have ceased to be employed by the Employer for reasons
other than death, excepting a leave of absence approved by the Employer. Whether
a termination of employment has occurred is determined based on whether the
facts and circumstances indicate that the Employer and the Executive reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services the Executive would perform after such date
(whether as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide
services performed (whether as an employee or an independent contractor) over
the immediately preceding twenty-four (24) month period (or the full period of
services to the Employer if the Executive has been providing services to the
Employer less than twenty-four (24) months).
(k) Voluntary Termination
shall mean the termination by Executive of Executive’s employment, which is not
the result of Good Reason.
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3.
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Term
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(a) The
term of this Agreement shall commence upon the date this Agreement is executed
by all parties and will terminate on the first anniversary of the Effective
Date.
4. Covenants
against competition, solicitation, or disclosure of confidential
information.
(a) Competition. For and
in consideration of the lump sum payment described in section 5 the Executive
shall not, either separately, jointly, or in association with others, directly
or indirectly, as an agent, employee, owner, partner, stockholder, or otherwise,
compete with the Company or the Bank or establish, engage in, or become
interested in any business, trade, or occupation that competes with the Company
or the Bank in the financial products or services industry in any county in any
of the States of the United States in which the Company’s or the Bank’s business
is currently being conducted or is being conducted when the Executive’s
separation from service occurs. The Company and the Executive acknowledge that
during the term of the Executive’s employment the Executive has acquired special
and confidential knowledge regarding the operations of the Company and Bank.
Furthermore, although not a term or condition of this Agreement, the Company and
the Executive acknowledge that the Executive’s services have been used and are
being used by the Company and the Bank in executive, managerial, and supervisory
capacities throughout the areas in which the Company and the Bank conduct
business. Executive acknowledges that the non-compete restrictions
contained herein are reasonable and fair in scope and necessary to protect the
legitimate business interests of the Company and the Bank.
(b) Solicitation. For and
in consideration of the lump sum payment described in section 5, the Executive
shall not (x) directly or indirectly solicit or attempt to solicit any customer
of the Company or the Bank to accept or purchase financial products or services
of the same nature, kind or variety currently being provided to the customer by
the Company or the Bank or being provided to the customer by the Company or the
Bank when the Executive’s separation from service occurs, (y) directly or
indirectly influence or attempt to influence any customer, joint venturer, or
other business partner of the Company or the Bank to alter that person or
entity’s business relationship with the Company or the Bank in any way, and (z)
accept the financial products or services business of any customer or provide
financial products or services to any customer on behalf of anyone other than
the Company or the Bank. In addition, the Executive shall not solicit or attempt
to solicit and shall not encourage or induce in any way any employee, joint
venturer, or business partner of the Company or the Bank to terminate an
employment or contractual relationship with the Company or the Bank, and shall
not hire any person employed by Company or the Bank during the two-year period
immediately before the Executive’s employment termination or any person employed
by the Company or the Bank during the term of this covenant.
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(c) Disclosure of confidential
information. For and in consideration of the lump sum payment described
in section 5 the Executive shall not reveal to any person, firm, or
corporation any confidential information of any nature concerning the Company or
the Bank or the business of the Company, the Bank, or affiliates. The covenant
in this section 4(c) does not prohibit disclosure required by an order of a
court having jurisdiction or a subpoena from an appropriate governmental agency
or disclosure made by the Executive in the ordinary course of business and
within the scope of the Executive’s authority.
(d) Duration; no impact on existing
obligations under law or contract. The covenants in this section
4 shall apply throughout the 12-month period immediately following the
executive’s separation from service whether or not the Company or the Bank has
engaged the services of the Executive pursuant to an agreement to provide
consulting services upon the Executive’s separation from service with the
Company or Bank. The 12-month durational period referenced herein
shall be tolled and shall not run during any such time that the Executive is in
breach of this Agreement and/or in violation of any of the covenants contained
herein, and once tolled hereunder shall not begin to run again until such time
as all such breach and/or violations have ceased. The Executive
acknowledges and agrees that nothing in this Agreement is intended to or shall
have any impact on the Executive’s obligations as an officer or employee of the
Company or the Bank to refrain from competing against, soliciting customers,
officers, or employees of, or disclosing confidential information of the Company
or the Bank while the Executive is serving as an officer or employee of the
Company or the Bank or thereafter, whether the Executive’s obligations arise
under applicable law or under an employment agreement or otherwise.
(e) Remedies. The
Executive acknowledges and agrees that remedies at law for the Executive’s
breach of the covenants contained herein are inadequate and that for violation
of the covenants contained herein, in addition to any and all legal and
equitable remedies that may be available, the covenants may be enforced by an
injunction in a suit in equity without the necessity of proving actual damage,
and that a temporary injunction may be granted immediately upon the commencement
of any such suit, and without notice. The parties hereto intend that the
covenants contained in this section 4 shall be deemed to be a series of
separate covenants, one for each county of each state in which the Company or
the Bank does business. If in any judicial proceeding a court refuses to enforce
any or all of the separate covenants, the unenforceable covenants shall be
deemed eliminated from the provisions hereof for the purposes of that proceeding
to the extent necessary to permit the remaining separate covenants to be
enforced. Furthermore, if in any judicial proceeding a court refuses to enforce
any covenant because of the covenant’s duration or geographic scope, the
covenant shall be construed to have only the maximum duration or geographic
scope permitted by law.
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(f) Forfeiture of payments under
this Agreement. If the Executive breaches any of the covenants in this
section 4, the Executive’s right to any of the payments specified in section
5 after the date of the breach shall be forever forfeited and the right of
the Executive’s designated beneficiary or estate to any payments under this
Agreement shall likewise be forever forfeited. This forfeiture is in addition to
and not instead of any injunctive or other relief that may be available to the
Company. The Executive further acknowledges and agrees that any breach of any of
the covenants in this section 4 shall be deemed a material breach by the
Executive of this Agreement.
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5.
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Noncompete
Payment.
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(a) Payment. In
consideration of the Executive’s covenant not to compete as described in section
4 hereto and subject to the limitations outlined in section 22:
(i) Upon
the Executive’s separation from service for any reason, subject to section 4 and
section 22 of this Agreement, or due to Retirement, the Company shall pay to the
Executive a lump sum payment, in an amount equal to the aggregate
of:
(a) One
times the annual rate of base salary then being paid to the
Executive.
(b) Potential six-month delay
under section 409A. If, when separation from service occurs, the
Executive is a specified employee within the meaning of section 409A of the
Internal Revenue Code of 1984 (the “Code”), and if the non-competition payment
under this section 5 would be considered deferred compensation under section
409A of the Code, and finally if an exemption from the six-month delay
requirement of section 409A(a)(2)(B)(i) of the Code is not available, the
Executive’s non-competition payments for the first six months following
separation from service shall be paid to the Executive in a single lump sum on
the first day of the seventh month after the month in which the Executive’s
separation from service occurs.
(c) Death and
Disability. Notwithstanding anything herein to the contrary,
no amounts are payable under this Agreement in the event of the Executive’s
termination of employment as a result of death or
disability. Further, all payments under this Agreement shall cease
upon Executive’s death.
6. Claims
Procedure.
A person
or beneficiary who has not received benefits under this Agreement that he or she
believes should be paid shall make a claim for such benefits by submitting to
the Administrator a written claim for the benefits. The claim must state with
particularity the determination desired by the claimant. All
determinations and decisions made by the Administrator regarding claims for
benefits under this Agreement will be final, conclusive and binding on all
persons, including the Company, the Bank, the Executive and his or her estate
and beneficiaries.
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7. Payments
and Funding.
Any
payment under this Agreement shall be independent of and in addition to those
under any other plan, program, or agreement that may be in effect between the
parties hereto or any other compensation payable to the Executive by the Company
or the Bank.
8. Assignment
of Rights; Spendthrift Clause.
None
of the Executive, the Executive’s estate, or the Executive’s beneficiary shall
have any right to sell, assign, transfer, pledge, attach, encumber, or otherwise
convey the right to receive any payment hereunder. To the extent permitted by
law, benefits payable under this Agreement shall not be subject to the claim of
any creditor of the Executive, the Executive’s estate, or the Executive’s
designated beneficiary or subject to any legal process by any creditor of the
Executive, the Executive’s estate, or the Executive’s designated
beneficiary.
9. Binding
Effect.
This
Agreement shall bind the Executive, the Company, and their beneficiaries,
survivors, executors, successors and assigns, administrators, and
transferees.
10. Successors;
Binding Agreement.
By an
assumption agreement in form and substance satisfactory to the Executive, the
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the business
or assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform this Agreement had no succession occurred.
11. Amendment
of Agreement.
This
Agreement may not be altered or amended except by a written agreement signed by
the Company and by the Executive. However, if the Company determines to its
reasonable satisfaction that an alteration or amendment of this Agreement is
necessary or advisable so that the Agreement complies with the Code or any other
applicable tax law, then upon written notice to Executive the Company may
unilaterally amend this Agreement in such manner and to such an extent as the
Company reasonably considers necessary or advisable to ensure compliance with
the Code or other applicable tax law. Nothing in this section 13 shall be deemed
to limit the Company’s right to terminate this Agreement at any time and without
stated cause.
12. Interpretation.
Caption
headings and subheadings herein are included solely for convenience of reference
and shall not affect the meaning or interpretation of any provision of this
Agreement. Words used in the singular in this Agreement shall include the plural
and words used in the masculine shall include the feminine.
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13. Severability.
If any
provision of this Agreement is held invalid, such invalidity shall not affect
any other provision of this Agreement not held invalid, and each such other
provision shall continue in full force and effect to the full extent consistent
with law. If any provision of this Agreement is held invalid in part, such
invalidity shall not affect the remainder of the provision not held invalid, and
the remainder of such provision together with all other provisions of this
Agreement shall continue in full force and effect to the full extent consistent
with law.
14. Governing
Law, Venue,
and Waiver of Right to Jury Trial.
This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey,
except to the extent preempted by the laws of the United States of
America. The Executive and the Company agree that the exclusive venue for
resolution of any disputes regarding or arising out of this Agreement or the
Executive's employment with the Company or the Bank shall be the state and
federal courts located in Union County, New Jersey. The Executive and
the Company further agree to waive any right to a jury trial with respect to any
disputes regarding or arising out of this Agreement or the Executive's
employment with the Company or the Bank. The Executive and the
Company each acknowledge and agree that this selection of venue and waiver of
the right to a jury trial is knowingly, freely, and voluntarily given, is made
after opportunity to consult with counsel of their choosing about this Agreement
and its provisions, and is in the best interests of each party
hereto.
15. Entire
Agreement.
This
Agreement constitutes the entire agreement between the Bank and the Executive
concerning the subject matter. No rights are granted to the Executive under this
Agreement other than those specifically set forth.
16. No
Guarantee of Employment.
This
Agreement is not an employment policy or contract. It does not give the
Executive the right to remain an employee of the Company or the Bank nor does it
interfere with the Company’s or the Bank’s right to discharge the Executive. It
also does not require the Executive to remain an employee or interfere with the
Executive’s right to terminate employment at any time.
17. Tax
Withholding.
If
taxes are required by the Code or other applicable tax law to be withheld by the
Company from payments under this Agreement, the Company shall withhold any taxes
that are required to be withheld.
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18. Notices.
All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid, to the following addresses or to such other address as either party may
designate by like notice. If to the Company, notice shall be given to the board
of directors, Center Bancorp, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or to
such other or additional person or persons as the Company shall have designated
to the Executive in writing. If to the Executive, notice shall be given to the
Executive at the Executive’s address appearing on the Company’s records, or to
such other or additional person or persons as the Executive shall have
designated to the Company in writing.
19. Compliance
with Code Section 409A.
The
Company and the Executive intend that their exercise of authority or discretion
under this Agreement shall comply with section 409A of the Code. Notwithstanding
anything herein to the contrary in this Agreement, to the extent that any
benefit under this Agreement that is nonqualified deferred compensation (within
the meaning of section 409A of the Code) is payable upon Executive’s termination
of employment, such payment(s) shall be made only upon Executive’s “Separation
from Service” pursuant to the default definition in Treasury Regulation section
1.409A-1(h).
20. General
Limitations.
(a) Removal. Despite any
contrary provision of this Agreement, if the Executive is removed from office or
permanently prohibited from participating in the Employer’s affairs by an order
issued under section 8(e) (4) or (g) (1) of the Federal Deposit Insurance Act,
12 U.S.C. 1818(e) (4) or (g) (1), all obligations of the Employer under this
Agreement shall terminate as of the effective date of the order.
(b) Default. Despite any
contrary provision of this Agreement, if the Employer is in “default” or “in
danger of default”, as those terms are defined in of section 3(x) of the Federal
Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement
shall terminate.
(c) FDIC Open-Bank
Assistance. All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of the contract is necessary
for the continued operation of the Employer, at the time the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Employer under the authority contained in section 13(c) of the
Federal Deposit Insurance Act. 12 U.S.C. 1823(c).
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(d) Executive’s Termination of
Employment. Except for the Executive’s Termination of Service for Good
Reason, all obligations of the Employer under this Agreement shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Employer, at the time of the
Executive’s Voluntary Termination of Service. Termination For Good
Reason as used herein shall mean (i) without the Executive’s express written
consent, a material diminution in authority, duties or responsibilities; (ii)
any reduction by the Employer in the Executive’s Base Salary; (iii) any failure
of the Employer to obtain the assumption of, or the agreement to perform, this
Agreement by any successor as contemplated in Section 10 hereof; (iv) the
Employer materially breaches this Agreement; or (v) the Employer requiring the
Executive to be permanently assigned to a location other than the current or
future headquarters of the Employer, except for required travel on the
Employer’s business to an extent substantially consistent with the Executive’s
present business travel obligations or, in the event the Executive consents to
any relocation, the failure by the Employer to pay (or reimburse the Executive)
for all reasonable moving expenses incurred by the Executive relating to a
change of the Executive’s principal residence in connection with such relocation
and to indemnify the Executive against any loss realized on the sale of the
Executive’s principal residence in connection with any such change of residence.
Good Reason shall be deemed to occur only when Executive provides notice to the
Employer of his judgment that a Good Reason event has occurred within 90 days of
such occurrence, and the Employer will have at least 30 days during which it may
remedy the condition.
(e) EESA
Limitations. Notwithstanding anything herein to the contrary, the
terms of this Agreement shall be construed subject to the limitations of the
Emergency Economic Stabilization Act of 2008 (“EESA”). It is
expressly understood that this Agreement will be enforced in a manner which is
consistent with Section 111 of EESA, as amended, and rules and regulations
currently issued and to be issued thereunder. Until such time that
the United States Treasury ceases to own any debt or equity or equity securities
of the Employer acquired pursuant to the Capital Purchase Program, the Employer
and Executive agree that all payments under this Agreement shall be limited to
the extent necessary to comply with Section 111 of EESA, as
amended.
In Witness Whereof,
the Executive and a duly authorized officer of the Company have executed this
Non-Competition Agreement as of the date first written
above.
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Executive
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Employer
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Center
Bancorp, Inc.
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By: /s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇
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By:
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Union
Center National Bank
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By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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