EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT (the “Agreement”) made effective as of November 1, 2011 by and between CITY NATIONAL BANK OF NEW JERSEY, a national banking association, with its principal office at 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 (the “Bank”), CITY NATIONAL BANCSHARES CORPORATION, a New Jersey corporation with its principal office at 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 (“CNBC” and sometimes collectively with the Bank referred to as the “Employer”), and XXXXXXX X. XXXXXXX, III, a resident of Gladstone, New Jersey, and who has an address of 0 Xxxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (the “Executive”).
WHEREAS, the Bank is a wholly-owned subsidiary of CNBC; and
WHEREAS, each of the Bank and CNBC desire to retain the services of Executive as its President and Chief Executive Officer for the period provided in this Agreement and subject to the terms and conditions hereof; and
WHEREAS, Executive is willing to serve as a full time employee as President and Chief Executive Officer of the Bank and CNBC on the terms and conditions specified herein,
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereto agree as follows:
1. POSITION AND RESPONSIBILITIES.
(a) Subject to the provisions of 1(b), during the term of his employment hereunder, Executive shall serve as President and Chief Executive Officer of the Bank and CNBC. Executive shall have such duties as are customarily or appropriately vested in the President and Chief Executive Officer of a national bank and a bank holding company, and as from time to time may be prescribed by the Boards of Directors of the Bank and CNBC (collectively, the “Board”). During the period of his employment hereunder, Executive shall devote substantially all of his business time, attention, skill, and efforts to the faithful performance of his duties hereunder, including activities and services related to the organization, operation and management of the Employer.
(b) Notwithstanding any provision to the contrary contained in this Agreement, the Board may, in its reasonable discretion and without any prior notice to the Executive, (i) relieve the Executive from the title and responsibilities of President and Chief Executive Officer of the Bank, and (ii) further define the Executive’s responsibilities with specific goals and objectives as presented to the Executive in a writing from the Board.
2. TERM. The period of Executive's employment under this Agreement shall be deemed to have commenced as of the effective date first above written and shall continue until the first anniversary of such date (the “Term”). Employer and Executive shall use reasonable efforts to negotiate an extension of the Term; provided Employer and Executive believe it is in their respective best interests to do so.
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3. COMPENSATION AND RELATED MATTERS.
(a) Compensation. As compensation for the responsibilities and duties described in Section 1, the Employer shall pay Executive a salary during the Term of Three Hundred and Thirty Five Thousand Dollars ( $335,000 ) in cash and non-cash compensation totaling $60,000 in the aggregate (collectively, the “Base Salary”). The non-cash compensation shall be in the form of twenty thousand (20,000) shares of CNBC’s common stock, valued for these purposes at $3.00 per share. The Base Salary shall accrue evenly during the Term and shall be paid to Executive in accordance with Employer’s normal payroll procedures, including, without limitation, after standard payroll deductions.
(b) Employee Benefits. So long as Executive shall be employed hereunder, the Employer shall provide Executive, at no cost to Executive, with all such benefits as are provided uniformly to similarly situated full-time employees who are employed at the Bank on an interim basis.
(c) Expenses. In addition to the salary and other benefits provided hereunder, the Employer shall reimburse Executive for all reasonable expenses incurred and accounted for by Executive in performing his obligations under this Agreement. Employer's reimbursement obligation hereunder shall be subject to Employer's reimbursement policies and procedures as adopted and amended from time to time.
(d) Vacation. Executive shall be entitled to five (5) weeks paid vacation during the Term. Time spent at a banking convention shall not be counted as vacation time. Executive will not be compensated for unused vacation time.
(e) Conventions. Employer shall reimburse Executive for all reasonable expenses related to his attendance at such banking conventions occurring during the Term that are selected by the Executive (such as the National Bankers Association, the New Jersey Bankers Association and the American Bankers Association, etc.) and approved in advance by the Board.
(f) Auto Allowance. Executive will be paid a monthly auto allowance of One Thousand Two Hundred Dollars ($1,200.00) during the Term. From this auto allowance Executive will be responsible for initiating and paying for all applicable auto insurance for the vehicle as well as undertaking all maintenance related to the vehicle.
4. TERMINATION. Upon termination of Executive's employment for any reason whatsoever, Executive shall be entitled to receive only the amount of any compensation and benefits accrued and unpaid pursuant to Section 3 of this Agreement, and shall be entitled to no further compensation or benefits hereunder.
5. NON-COMPETITION; NON-DISCLOSURE.
(a) Executive agrees not to disclose, during or after the term of his employment, any knowledge of the past, present, planned or considered business activities of the Employer or affiliates thereof to any person, firm, corporation, association or other entity for any reason or purpose whatsoever. Notwithstanding the foregoing, Executive may disclose any knowledge of, banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Employer. In the event of a breach or threatened breach by the Executive of the provisions of this Section, the Employer shall be entitled to an injunction restraining Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of the Employer or affiliates thereof, or from rendering any services to any person, firm, corporation, association or other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed. Nothing herein will be construed as prohibiting the Employer from pursuing any other remedies available to the Employer for such breach or threatened breach, including the recovery of damages from Executive.
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(b) Upon (i) voluntary termination by the Executive of his employment hereunder for any reason other than as a result of a material breach of this Agreement by the Employer, (ii) termination of Executive's employment by the Employer for cause, or (iii) expiration of this Agreement as a result of the Executive’s failure to accept Employer’s offer of a renewal of this Agreement on substantially similar terms as contained herein, Executive agrees not to compete with the Employer or any of its affiliates for a period of one (1) year following such termination within a 30 mile radius from the Bank's main office located at 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx or within a three mile radius from the location of any branch of the Bank existing as of the date of such termination. Executive agrees that during such period and within said radius, Executive will not work for or advise, consult or otherwise serve with, directly or indirectly, any entity whose business materially competes with the depository, lending or other business activities of the Employer or any affiliate. The parties hereto, recognizing that irreparable injury will result to the Employer, its business and property in the event of Executive's breach of this Section, agree that in the event of any such breach by the Executive, the Employer will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by the Executive, the Executive's partners, agents, servants, employers, employees and all persons acting for or with the Executive.
6. BINDING EFFECT. This Agreement shall be binding upon, and inure to the benefit of, Executive, the Bank, CNBC and their respective heirs, personal representatives, successors and assigns.
7. MODIFICATION, TARP CAPITAL PURCHASE PROGRAM AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. The Executive hereby acknowledges and agrees that, for as long as CNBC is a participant in and is subject to the Troubled Asset Relief Program (“TARP”) rules and guidance, with debt or equity held by the U.S. Department of the Treasury (the “Treasury”), the Employer will be bound by the executive compensation and corporate governance requirements of Section 111 of the Emergency Economic Stabilization Act of 2008, as amended, and any and all implementing regulations or guidance issued by the Treasury. The Executive further agrees that despite any contrary provision within this Agreement (including, without limitation, the first sentence of this Section 7(a)), the Board shall have the right to modify, unilaterally and without the Executive’s consent, any of the provisions of this Agreement, including but not limited to reducing the amount of compensation and benefits provided herein, if in the Board’s sole judgment the modification is necessary to comply with the mandatory application of the Treasury’s rules and guidance governing executive compensation of participants of the TARP Capital Purchase Program, as such rules and guidance may be supplemented or amended from time to time after the date of this Agreement. The Board’s power under this Section 7 to modify the provisions of this Agreement shall expire when the Bank, or it’s parent corporation, is no longer a participant in and subject to the TARP Capital Purchase Program rules and guidance.
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(b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that
specifically waived.
8. SEVERABILITY. If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.
9. HEADINGS FOR REFERENCE ONLY. The headings of Sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.
10. GOVERNING LAW. This Agreement has been executed and delivered in the State of New Jersey, and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of New Jersey.
11. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, in accordance with the rules of the American Arbitration Association. Judgment may be entered on the arbitrator's award in any court having jurisdiction.
12. CONSTRUCTION. All references to the singular shall include the plural, and vice-versa, and reference to one gender shall include the other gender, as the context requires.
13. NOTICES. All notices required or permitted to be given herein shall be in writing and delivered to the parties at the following addresses:
If to the Employer:
City National Bank of New Jersey
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Chairman of the Board of Directors
If to Executive:
XXXXXXX X. XXXXXXX, III
0 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
or, at such other address as each party may designate in writing to the other parties. All notices shall be effective, if by mail, two days after mailing, and in all other instances upon delivery.
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14. INDEMNIFICATION AND COOPERATION. Employer agrees to continue and maintain a directors' and officers' liability insurance policy covering the Executive to the extent the Employer provides such coverage for other executive officers, including, without limitation, insurance coverage after the termination of this Agreement. Employer shall indemnify Executive to the same extent the Employer indemnifies its then current executive officers, including, without limitation, indemnification after the termination of this Agreement. Following the termination of this Agreement, to the extent reasonably requested by Employer, Executive shall cooperate with Employer on matters involving Executive's unique personal knowledge, including the defense of any action brought by any third party against Employer. The obligation of Executive to cooperate as provided for above shall be conditioned upon (a) reasonable prior notice to the Executive by the Employer of any request for such cooperation, (b) no interference as a result of such cooperation with Executive's other activities, (c) no conflict of interest between Executive and Employer exists in the subject matter of such cooperation, (d) Executive is compensated for his time devoted to such cooperation in excess of three (3) hours in any calendar month, and (e) Executive is provided with prompt expense reimbursements and advances for reasonable out-of-pocket expenses incurred in connection with such cooperation.
[Signatures are on following page]
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IN WITNESS WHEREOF, the Bank, CNBC and Executive have caused this Agreement to be executed effective the first date written above.
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CITY NATIONAL BANK OF NEW JERSEY,
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a national banking association
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By:
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/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, Chairman of the Board
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CITY NATIONAL BANCSHARES CORPORATION,
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a New Jersey corporation
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By:
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/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, Chairman of the Board
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/s/ Xxxxxxx Xxxxxxx III
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XXXXXXX X. XXXXXXX, III, Executive
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[Signature page to Employment Agreement—Xxxxxxx X. Xxxxxxx, III]
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