EMPLOYMENT AGREEMENT
Exhibit
10.1
Employment
Agreement (the "Employment Agreement") made as of this 23rd day
of June, 2010, by and between XXXXXX X. XXXXX an individual
residing at 00 Xxxxxxxxx Xxxx, Xxxxx Xxxxxx Xxxxx, XX 00000 (the
"Employee"), SUSSEX
BANK, a New Jersey state chartered commercial bank with its principal
place of business located at 000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxx
Xxxxxx 00000 (the "Bank"), and SUSSEX BANCORP, a New Jersey
corporation with its principal place of business located at 000 Xxxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company"; the Bank and the
Company sometimes collectively are referred to herein as
"Employer").
WHEREAS, the Board of
Directors of the Bank and the Board of Directors of the Company have each
determined that it is in the best interests of each of the Bank and the Company
to enter into this Agreement with Employee, and each respective Board has
authorized the Bank and the Company to enter into this Agreement;
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. The
Company and the Bank hereby jointly agree 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 Chief
Financial Officer and Executive Vice President of the Company and the Bank, 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 Chief
Executive Officer and/or the Board of Directors of the Company and the
Bank. Employee agrees that he will devote his full business time and
efforts to his duties hereunder.
3. 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
One Hundred Sixty Thousand dollars ($160,000), 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) Incentive Plans.
Employee shall be entitled to participate in the Employer’s incentive plan for
executive officers of the Employer.
(c) Equity
Grant. On the date hereof, the Company shall grant
Employee an award of such number of shares of the Company’s common stock, no par
value per share, which shall have a fair market value, as hereinafter defined,
of one hundred forty four thousand ($144,000) dollars (the “Restricted Stock”).
The Restricted Stock shall be subject to forfeiture in the event Employee’s
employment with the Employer is terminated during the “Restricted Period” (as
defined below), and the Restricted Stock may not be transferred during the
Restricted Period. During the Restricted
Period, the Restricted Stock may either be issued in book entry form only, or if
issued in certificated form, the Employer may retain custody of the
certificates, at Employer’s option. If the Restricted Stock is issued in
certificated form, Employee shall execute such stock powers regarding such
certificates as the Company shall reasonable request. During the Restricted
Period, Employee shall be entitled to receive and retain any cash dividends paid
on the Restricted Stock, and Employee shall have the right to vote the
Restricted Shares at any shareholders meeting of the Company. For purposes of
this Agreement, the Restricted Period shall be a period of time commencing on
the date hereof and ending with regard to twenty percent (20%) of the Restricted
Stock on June 23 , 2012, with the Restricted Period then ending with regard to
an additional twenty percent (20%) of the Restricted Stock on each June 23rd thereafter;
provided, however, that in the event of a Change in Control of the Company (as
defined below), the Employee’s death or his disability, the Restricted Period
shall end with regard to all of the Restricted Stock. For
purposes of this Agreement, “fair market value” shall be the average closing
price of the Company’s common stock over the five (5) trading days ending on the
trading day immediately preceding the date of this Agreement. For purposes
hereunder, Employee shall be deemed to be disabled if he is unable to perform
his essential job functions due to a mental or physical condition for a period
of six (6) consecutive months or for shorter periods aggregating six (6) months
during any twelve (12) month period.
4. Other Benefits.
(a) Automobile. The
Employee shall be entitled to a cash allowance in the amount of five hundred
($500) dollars per month to be used for the purpose of maintaining an
automobile.
(b) Insurance. The
Employee shall be entitled to receive hospital, health, medical, and life
insurance of a type currently provided to and enjoyed by other senior officers
of Employer, and shall be entitled to participate in any other employee benefit,
incentive or retirement plans offered by Employer to its employees generally or
to its senior management.
(c) Expenses. The
Employee shall be entitled to reimbursement for all proper business expenses
incurred by him with respect to the business of the Employer upon the provision
of documentation evidencing such expenses in accordance with the Employer’s
expense reimbursement policies and in the same manner and to the same extent as
such expenses are reimbursed to other officers of the Employer.
5. Term. The term of
this Agreement shall commence on the date hereof (the “Employment Commencement
Date”) and continue until June 23, 2012 (the “Initial
Term”). At the end of the Initial Term, and thereafter at the
end of the Extension Term (as defined below) if any, the term of this Agreement
shall automatically be renewed for one year (each such extension, an “Extension
Term” and, with the Initial Term, the “Term”) unless either party hereto, by
written notice provided at least 90 days prior to the end of the Initial Term or
an Extension Term, as appropriate, elects not to so renew.
6. Termination. Employee
may be terminated at any time, without prejudice to Employee's right
to compensation or benefits as provided herein. Employee's
rights upon a termination shall be as follows:
(a) Cause. As
used in this Agreement, the term "Cause" shall mean the Employee's personal
dishonesty, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) 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 resolution duly adopted by the affirmative vote of
not less than three-fourths of the members of the Board of Directors of each of
the Company and the Bank at meetings of their respective Boards called and held
for that purpose (after reasonable notice to the Employee and an opportunity for
him, together with counsel, to be heard before each 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; provided, however, that nothing contained herein
shall prohibit Employee from being suspended from his duties hereunder by a duly
authorized agent of the Board upon a good faith determination that "cause"
exists. Such suspension shall last until such time as the Board
meeting provided for above shall have occurred, provided that such Board meeting
shall occur within a reasonable period of time. During such
suspension Employee shall continue to be an employee, entitled to all salary and
benefits provided for hereunder.
(b) Termination With
Cause. Employer shall have the right to terminate the Employee
for "cause". In the event of such termination, the Employee shall not
be entitled to any further benefits under this Agreement.
(c) Termination Without
Cause. Upon a termination of Employee's employment
hereunder without "cause", in recognition of such termination and Employee’s
agreement to be bound by the covenants contained in Section 9 hereof,
Employee shall be entitled to receive a lump sum severance payment equal to the
amount that would have been paid to Employee for the greater of (i) one year or
(ii) the remaining unexpired term of this Employment Agreement as determined
under Section 5, assuming no renewal or extension of the
Term (the “Remaining Unexpired Term”) at his then current Base Salary
with no discounting for early payment. In addition, Employer shall
continue to provide the Employee with hospital, health, medical and life
insurance, and any other like benefits in effect at the time of such termination
for the greater of (i) the period of one year or (ii) the Remaining Unexpired
Term. 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 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.
(d) Death or
Disability. This Agreement shall automatically terminate
upon the death or disability of Employee. Upon such termination, Employee shall
not be entitled to any additional compensation hereunder, provided, however that
the forgoing shall not prejudice Employee’s right to be paid for all
compensation earned through the date of such termination and the benefits of any
insurance programs maintained for the benefit of Employee or his beneficiaries
in the event of his death or disability.
7. Resignation for
Cause. During the term of this Agreement, the Employee shall
be entitled to resign from his employment with Employer, and in recognition of
the termination of Employee’s employment in such circumstances and Employee’s
agreement to be bound by the covenants contained in Section 9 hereof,
Employee shall 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 Chief Financial Officer,
(ii) relocates the Employee's principal place of employment by more than fifty
(50) miles from its location on the date hereof, or (iii) reduces the Employee's
compensation or other benefits below the level specified herein. 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 termination of Employee’s employment upon the occurrence of a Change in
Control (as herein defined), Employee shall be entitled to receive the payments
provided for under paragraph (c) hereof. In addition, if within eighteen (18)
months of the occurrence of a Change in Control Employer or its successor shall
(i) reassign the Employee to a position of lesser rank or status than Chief
Financial Officer, (ii) relocate the Employee's principal place of employment by
more than fifty (50) miles from its location prior to consummation of the Change
in Control, or (iii) reduces the Employee's compensation or other benefits below
the level in effect prior to the consummation of Change in Control,
Employee have the right to resign his employment with the Employer or its
successor and thereafter Employee shall become entitled to receive the payments
provided for under paragraph (c) below.
(b) A
"Change in Control" shall mean:
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(i)
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a
reorganization, merger, consolidation or sale of all or substantially all
of the assets of the Company, or a similar transaction, in any
case in which the holders of the voting stock of the Company prior to such
transaction do not hold a majority of the voting power of the resulting
entity; or
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(ii)
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individuals
who constitute the Incumbent Board (as herein defined) of the Company
cease for any reason to constitute a majority thereof;
or
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(iii)
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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 or the trustees or any
administration of any employee stock ownership plan and trust, or any
other employee benefit plans, established by Employer from time-to-time in
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 35% or more of the Company's outstanding securities
ordinarily having the right to vote at the election of directors;
or
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(v)
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A
tender offer is made for 35% or more of the voting securities of the
Company and the shareholders owning beneficially or of record 35% or more
of the outstanding securities of the Company have tendered or offered to
sell their shares pursuant to such tender and such tendered shares have
been accepted by the tender
offeror.
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For these
purposes, "Incumbent Board" means the Board of Directors of the Company on the
date hereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a voting 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.
(c) In
the event the conditions of Section (a) above are satisfied, Employee shall be
entitled to receive a lump sum payment equal to two (2) times Employee's then
current Base Salary; provided, however, that
in no event shall any payments provided for hereunder constitute an "excess
parachute payment" under Section 280G of the Internal Revenue Code of 1986, as
amended or any successor thereto, and in order to avoid such a result the
benefits provided for hereunder will be reduced, if necessary, to an amount
which is One Dollar ($1.00) less than an amount equal to three (3) times
Employee's "base amount" as determined in accordance with such Section
280G. In addition to the foregoing, Employee shall be entitled to
receive from Employer, or its successor, hospital, health, medical and life
insurance on the terms and at the cost to Employee as Employee was receiving
such benefits upon the date of his termination. Employer's obligation
to continue such insurance benefits will be for a period of two (2)
years.
9. Covenant Not to
Compete.
(a) As
consideration for the benefits conferred upon Employee hereunder, including, but
not limited to Employee’s right to severance under Section 6(c), Employee agrees
that during the term of his employment hereunder and for a period of one (1)
year after the termination of his employment (the “Covenant Term”) 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 NASDAQ) any enterprise
which competes with Employer in the business of banking in the counties in which
Employer conducts its business on the date of Employee's termination; provided,
however, that this Section 9 shall be of no force and effect following a Change
in Control of the Employer.
(b) The
Employee agrees that, during Covenant Term, he shall make himself available to
the Employer for consultation from time to time to provide transition assistance
to Employer and/or its successor. Such consultation shall not be on a full time
basis and shall, to the fullest extent possible, be undertaken on a remote basis
so that Employee shall not generally be required to render such consultations at
the business location of the Employer.
(c) 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. In the absence of controlling Federal 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 for 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 hereof and may only be amended by written agreement signed by
both parties hereto or their duly authorized representatives.
(d) Successors and
Assigns. This Agreement shall be binding upon and become the
legal obligation of the successors and assigns of Employer.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above
written.
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SUSSEX
BANK
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By:
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/s/
Xxxxxxx Xxxxxxxxxx
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Name: Xxxxxxx
Xxxxxxxxxx
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Title: President
and CEO
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By:
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/s/
Xxxxxxx Xxxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxxx
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Title: President
and CEO
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EMPLOYEE:
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/s/
Xxxxxx X. Xxxxx
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Name:
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Xxxxxx
X. Xxxxx
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