AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT
EXHIBIT
10.10
AMENDED
AND RESTATED
THIS AMENDED AND RESTATED CHANGE OF
CONTROL AGREEMENT (this “Agreement”),
dated as of the 23rd day of December, 2008, is by and between CENTRAL JERSEY
BANCORP, a New Jersey corporation (the “Company” or “Bancorp”), and XXXXXXX
XXXXXXXX, III (the “Executive”).
WHEREAS, the Board of
Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held companies, the possibility of a change of control exists and that
such possibility, and the uncertainty and questions which it may raise among
management, could result in the departure or distraction of management personnel
to the detriment of the Company;
WHEREAS, the Board has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Company’s management,
including the Executive, to their assigned duties without distraction in the
face of the possibility of a change of control;
WHEREAS, the Company and the
Executive previously entered into that certain Change of Control Agreement,
dated as of August 1, 2006, as amended on February 21, 2007 (the “Prior
Agreement”), whereby the Company and the Executive memorialized the
benefits to which the Executive shall be entitled in the event of a change of
control; and
WHEREAS, in order to comply
with applicable federal and states laws, including, but not limited to, the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Code”), the Company and the Executive
desire to amend and restate the Prior Agreement in its entirety as set forth
herein.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants, undertakings and
representations contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the
Executive agree as follows:
1. Term of
Agreement. This Agreement shall continue in full force and
effect for so long as the Executive is employed by Bancorp and/or Central Jersey
Bank, N.A., the bank subsidiary of Bancorp (the “Bank”); provided, however, that this
Agreement shall continue in effect after the termination of the Executive’s
employment, regardless of the reason, for such period as is necessary to
effectuate the rights of the Executive and Bancorp hereunder and for the
Executive and Bancorp to fulfill and observe their respective obligations set
forth herein; provided, further, that if the
Executive’s employment is terminated without Cause (as defined below) by Bancorp
prior to a Change of Control Event (as defined below), the Executive shall be
entitled to receive the full benefits under this Agreement if a Change of
Control Event occurs within 12 months after the effective date of termination of
the Executive’s employment. In other words, in the event the
Executive’s employment is terminated without Cause, he will be entitled to
receive the Severance (as defined below) provided for in Section 3(a) hereof in
connection with a Change of Control Event which occurs within 12 months after
such termination. In the event that the Executive is to receive
Severance as provided for herein, the Severance shall be
payable
in-full by the Company within 10 business days after the effective date of the
Change of Control Event; provided, however, that,
notwithstanding the foregoing, all Severance shall be paid on or before December
31 of the calendar year in which the Change of Control Event
occurred.
2. Relationship of the
Parties. The Executive shall serve, at the discretion of the
Board, as an Executive Vice President and the Chief Financial Officer, Treasurer
and Assistant Secretary of Bancorp and the Bank. This Agreement shall
not constitute an employment agreement between the Company and the Executive and
shall not guarantee the Executive’s continued employment with Bancorp or the
Bank.
3. Termination as a Result of a
Change of Control Event.
(a) In
the event that either (i) the Executive is terminated without Cause in
connection with (A) a merger of Bancorp where Bancorp is not the surviving
entity, (B) the acquisition of greater than 50% of Bancorp’s voting stock by an
entity or group of individuals other than the shareholders of Bancorp as of the
Effective Date (or any individual or entity which receives from a current
shareholder of Bancorp an interest in Bancorp through will or the laws of
descent and distribution), (C) the sale or disposition of all or substantially
all of Bancorp’s assets, or (D) the determination (which may be made effective
as of a particular date specified by the Board) by the Board that a change of
control has occurred or is about to occur (each a “Change of Control Event”), or
(ii) a Change of Control Event occurs and the Executive is not retained by the
successor entity or group (the “Successor Entity”) for a period of at least 30
months commencing on the effective date of the Change of Control Event pursuant
to a written agreement (the “New Agreement”) which provides that the Executive
shall have (A) the same or substantially equal position with similar title and
responsibilities and the same or greater salary, benefits (including, without
limitation, health insurance for the Executive and his family, life insurance
for the Executive, matching 401(k) contributions and automobile allowance, as
applicable) and bonuses that the Executive was entitled to receive from the
Company immediately prior to the Change of Control Event, and (B) a commuting
distance that is not greater than 30 miles from the Executive’s current
residence, the Executive shall be entitled to Severance from the Company; provided, however, that the
Executive shall only be entitled to such Severance if he agrees to remain as an
employee of the Company and assist in the transition until the effective date of
the Change of Control Event; provided, further, in no event
shall a Change of Control Event be deemed to have occurred, with respect to the
Executive, if the Executive is part of a purchasing group which consummates the
transaction relating to the Change of Control Event. The Executive
shall be deemed “part of the purchasing group” for purposes of the preceding
sentence if the Executive is an equity participant or has agreed to become an
equity participant in the purchasing company or group (except for (i) passive
ownership of less than 5% of the voting securities of the purchasing company; or
(ii) ownership of equity participation in the purchasing company or group which
is otherwise deemed not to be significant, as determined prior to the Change of
Control Event by a majority of the non-employee members of the
Board). In the event that the Executive is to receive Severance as
provided for herein, the Severance shall be payable in-full by the Company
within 10 business days after the effective date of the Change of Control Event;
provided, however, that,
notwithstanding the foregoing, all Severance shall be paid on or before December
31 of the calendar year in which the Change of Control Event
occurred.
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In addition to the forgoing, in the
event the Executive’s employment is terminated without Cause in connection with
any acquisition by Bancorp of any bank, bank holding company or other similar
institution (the “Acquisition”), and the Acquisition does not constitute a
Change of Control Event, the Executive shall nevertheless be entitled to receive
Severance from the Company, which shall be payable in-full by the Company within
10 business days after the effective date of the termination of the Executive’s
employment without Cause; provided, however, that,
notwithstanding the foregoing, all Severance shall be paid on or before December
31 of the calendar year in which the termination of employment
occurred.
For purposes of this Agreement,
“Severance” shall mean (i) an amount equal to the product of the Executive’s
monthly salary in effect at the time of the Change of Control Event or the
Acquisition multiplied by 24, plus (ii) an amount equal to the product of (A)
the quotient of the largest annual cash bonus payment made to the Executive for
services provided in any of the three years ended on December 31 of the year
preceding the year in which the Change of Control Event or the Acquisition
occurs, divided by 12, multiplied by (B) 24, plus (iii) an amount equal to the
product of the cash equivalent of the monthly benefits provided to the Executive
at the time of the Change of Control Event or the Acquisition, as determined by
the Board in good faith and its sole discretion, multiplied by 24. In
addition, for purposes of this Agreement, “Cause” shall mean as
follows: (i) the Executive willfully, or as a result of gross
negligence on his part, fails substantially to (A) carry out the lawful policies
of the Board or (B) discharge his duties and responsibilities as an executive of
Bancorp and the Bank for any reason other than the Executive’s disability, (ii)
the Executive is convicted of or enters a plea of no contest with respect to a
felony, (iii) the Executive engages in conduct which is demonstrably and
substantially injurious to the Company (as determined in good faith by the
Board), (iv) the Executive materially breaches this Agreement, or commits any
deliberate and intentional violation of the provisions of Sections 4 and/or 5 of
this Agreement, or (v) the Executive commits willful or intentional misconduct
that has a material adverse effect on Bancorp or the Bank.
(b) In
addition to the provisions set forth in Section 3(a) of this Agreement, the New
Agreement also will provide that if the Executive accepts employment with the
Successor Entity as of the effective date of the Change of Control Event and the
Executive (i) is terminated by the Successor Entity without Cause during the 30
month period commencing on the effective date of the Change of Control Event,
(ii) dies or becomes disabled (and such disability results in the termination of
the Executive’s employment), or (iii) voluntarily terminates his employment with
the Successor Entity for any other reason or no reason on the 6 month
anniversary of the effective date of the Change of Control Event (the “Six Month
Anniversary Date”), the Executive shall be entitled to Severance from the
Successor Entity. If the Executive’s employment is terminated as
provided in Section 3(b)(i) or 3(b)(ii), he shall receive Severance for the
number of months equal to the remainder of 24 months less the number of whole
months the Executive was employed by the Successor Entity following the 6 Month
Anniversary Date; provided, however, that if the
Executive’s employment is terminated by the Successor Entity as provided in
Section 3(b)(i) prior to the 6 Month Anniversary Date or he dies or becomes
disabled (and such disability results in the termination of the Executive’s
employment) as provided in Section 3(b)(ii) prior to the 6 Month Anniversary
Date, the Executive shall receive 24 months Severance; provided, further, that in the
event the Executive is entitled to receive Severance as provided in Section
3(b)(i) or 3(b)(ii), the Executive shall not
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receive
less than 6 months Severance. In the event the Executive elects to
terminate his employment with the Successor Entity on the Six Month Anniversary
Date as provided in Section 3(b)(iii), he shall receive 24 months
Severance. To calculate the Severance payable in accordance with this
Section 3(b), the number 24 set forth in the definition of Severance in Section
3(a) of this Agreement shall be replaced with the number of months of Severance
the Executive is entitled to receive as provided in this Section
3(b). Such Severance shall be payable in-full within 10 business days
after the termination of the Executive’s employment with the Successor Entity;
provided, however, that,
notwithstanding the foregoing, all Severance shall be paid on or before December
31 of the calendar year in which the termination of employment
occurred. In addition, the New Agreement will contain the provisions
set forth in Sections 4 through 17 of this Agreement; provided, however, that the
provisions of Section 4(a) shall not be applicable to the Executive if his
employment with the Successor Entity terminates after the end of the 30 month
period which commences on the effective date of the Change of Control Event and,
as a result, he is not entitled to any Severance in connection with such
termination. For purposes of clarity, the Executive shall not be
entitled to any Severance should his employment with the Successor Entity
terminate for any reason after the expiration of the 30 month period commencing
on the effective date of the Change of Control Event.
4. Covenant Not to
Compete/Solicit. In consideration for the right to receive the
Severance provided for herein, the Executive agrees as follows:
(a) During
his employment with the Company and for a period of 6 months from the effective
date of any termination of the Executive’s employment by the Company for (A)
Cause, or (B) without Cause, or (ii) by the Executive, the Executive shall not,
directly or indirectly, commence employment with or render services to any other
bank or banking institution within the State of New Jersey; provided, however, that if the
Executive’s employment is terminated by the Company without Cause, or the
Executive voluntarily terminates his employment with the Company, and he is not
entitled to any Severance with respect to any such termination, the provisions
of this Section 4(a) shall not apply to the Executive.
(b) During
his employment with the Company and for a period of 12 months from the effective
date of any termination of the Executive’s employment with the Company for any
reason whatsoever, the Executive shall not recruit any employee of the Company
or solicit or induce, attempt to solicit or induce, or assist in the
solicitation or inducement of any employee of the Company to terminate his or
her employment, or otherwise cease his or her relationship, with the Company, or
solicit, divert or take away, or attempt to solicit, divert or take away, the
business or patronage of any of the clients, customers or accounts of the
Company that were served by the Company while the Executive was employed by the
Company.
(c) The
Executive acknowledges that the restrictions set forth in this Section 4 are
reasonable and necessary for the protection of the business and good will of the
Company.
5. Confidential Information and
Materials. The Executive acknowledges that by reason of the
Executive’s employment with the Company, the Executive has and will hereafter,
from time to time during his employment with the Company, become exposed to
and/or become knowledgeable about proposals, plans, inventions, practices,
systems, programs, subscriptions,
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strategies,
formulas, processes, methods, techniques, research, records, suppliers, sources,
customer lists, billing information, any other form of business information and
any trade secrets of every kind and character, whether or not they constitute a
trade secret under applicable law, which are not known to the Company’s
competitors and which are kept secret and confidential by the Company (the
“Confidential Information”). The Executive therefore agrees that at
no time during or after his employment will he disclose or use the Confidential
Information or materials to or with any person, firm, business, corporation,
association, or other entity for any reason or purpose except as may be required
in the prudent course of business for the sole benefit of the Company, or as may
be required by a court order or by law.
6. Company
Property. All correspondence, memoranda, notes, records,
reports, plans, price lists, customer lists, financial statements, catalogs,
computer programs, disks, tapes, other papers and other medium on or by which
Confidential Information is stored, received or made by the Executive
in connection with his employment by the Company shall be the property of the
Company and shall be delivered to the Company upon the termination of his
employment or at any other time upon request of the Company.
7. Equitable
Remedies. The Company and the Executive acknowledge and
confirm that the restrictions contained in Sections 4, 5 and 6 hereof are, in
view of the nature of the business of the Company, reasonable and necessary to
protect the legitimate interests of the Company and that any violation of any
provisions of Sections 4, 5 and 6 will result in irreparable injury to the
Company. Therefore, the Executive hereby agrees that in the event of
any breach or threatened breach of the terms or conditions of this Agreement by
the Executive, the Company’s remedies at law will be inadequate and, in any such
event, the Company shall be entitled to commence an action for preliminary and
permanent injunctive relief and other equitable and monetary relief in any court
of competent jurisdiction.
8. Excise
Tax. In the event that the payments and other benefits
provided for in this Agreement constitute “parachute payments” within the
meaning of Section 280G of the Code and will be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive’s
severance benefits payable under the terms of this Agreement will be either (a)
delivered in full, or (b) delivered as to such lesser extent which would result
in no portion of such severance benefits being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by the
Executive, on an after-tax basis, of the greatest amount of severance benefits,
notwithstanding that all or some portion of such severance benefits may be
taxable under Section 4999 of the Code. Unless the Company and the
Executive otherwise agree in writing, any determination required under this
Section 8 will be made in writing by the Company’s independent public
accountants (the “Accountants”), whose determination will be conclusive and
binding upon the Executive and the Company for all purposes. For
purposes of making the calculations required by this Section 8, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Section 280G and 4999 of the Code. The Company
and the Executive will furnish to the Accountants such information and documents
as the Accountants may reasonably request in order to make a determination under
this Section 8. The Company will bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section
8.
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9. Costs. If
litigation is brought to enforce or interpret any provision contained herein,
the court shall award reasonable attorneys’ fees and disbursements to the
prevailing party as determined by the court.
10. Severability. If
any provision of this Agreement or application thereof to any person or
circumstance is adjudicated to be invalid or unenforceable in a jurisdiction,
such invalidity or unenforceability shall not affect any other provision or
application of this Agreement, which can be given effect without the invalid or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other
jurisdiction.
11. Entire Agreement,
Amendments. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings, oral or
written, with respect to the subject matter hereof. This Agreement
may not be changed, amended or modified orally, but may change only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
12. Binding
Agreement. This Agreement shall be binding upon and inure to
the benefit of all executors, administrators, heirs, successors and assigns of
the parties; provided, however, that this
Agreement shall not be assignable by the Executive and shall terminate upon the
death of the Executive.
13. Governing Law, Consent to
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey without
application of its conflict of laws rules. The Executive hereby
submits to the exclusive jurisdiction and venue of the courts of the State of
New Jersey or the United States District Court for the District of New Jersey
for purposes of any legal action.
14. Counterparts. This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one and the same agreement.
15. Notices. All
notices required or permitted hereunder shall be in writing and shall be sent by
overnight courier or certified or registered mail, return receipt requested,
postage prepaid, as follows:
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If
to the Company:
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0000
Xxxxxxx 00
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Xxxxxxxx,
Xxx Xxxxxx 00000
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Attn.:
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Xxxxx
X. Xxxxxxx
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Chairman,
President and Chief Executive Officer
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If
to the Executive:
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Xxxxxxx
Xxxxxxxx, III
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0
Xxxxx Xxxx
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Xxxx
Xxxxxx, XX
00000
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Notices
may be sent to such other address as either party may designate in a written
notice served upon the other party in the manner provided herein. All
notices required or permitted hereunder shall be deemed duly given and received
on the next business day, if delivery is by overnight courier, or the second day
next succeeding the date of mailing, if delivery is by mail.
16. Headings. The
section headings herein are for convenience only and shall not affect the
interpretation or construction of this Agreement.
17. Waiver. The
failure of either party to enforce any provision of this Agreement shall not be
construed as a waiver or limitation of that party’s right to subsequently
enforce and compel strict compliance with every provision of this
Agreement.
18. Further
Assurances. Each party shall cooperate with and take such
action as may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement.
[Signature
Page Follows.]
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IN WITNESS WHEREOF, the
parties hereto have duly executed this Amended and Restated Change of Control
Agreement as of the date first written above.
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By:
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/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx
X. Xxxxxxx
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Title:
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President
and Chief Executive Officer
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EXECUTIVE
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/s/ Xxxxxxx Xxxxxxxx,
III
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Xxxxxxx
Xxxxxxxx,
III
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