EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Agreement”) made as of this ____1st___
day
of ________September_____________,
2006__
by and
between TRI-STATE
INSURANCE AGENCY, INC.,
a New
Jersey corporation ("Employer"), and
Xxxxxx X. Xxxxxx,
an
individual residing at 00 Xxxxxx Xxxx, Xxxxxx, XX 00000, (the
"Executive").
W
I T N E S S E T H:
WHEREAS,
Employer
is a subsidiary of Sussex Bank (“Sussex”);
WHEREAS,
Executive has heretofore been employed by Employer pursuant to a certain
Employment Agreement dated the 28th
day of
September, 2001 (the "2001 Agreement");
WHEREAS,
the
parties wish to enter into this Agreement commencing on January 1, 2007 (the
"Effective Date") in accordance with the terms and conditions as contained
herein;
WHEREAS,
the
parties agree to extend the employment of Executive by Employer pursuant to
the
2001 Agreement until December 31, 2006 (the "Extension Period");
NOW,
THEREFORE,
in
consideration of the mutual promises and undertakings herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. Extension
of 2001 Employment Agreement.
Employer
agrees to extend the 2001 Agreement from the 28th
day of
September, 2001 until December 31, 2006, according to the terms and conditions
thereof with the exception of Paragraph 3 (c) (the "Bonus") which terminates
on
September 28, 2006.
2. Employment
and Term.
(a) Employer
hereby employs the Executive as the President of the Employer (the "Position")
and the Executive agrees to serve in the Position from and after January 1,
2007
(the "Effective Date") for a term of three (3) years (the "Term"), and which,
subject to paragraph
2(b),
hereof, shall terminate on December 31, 2009, unless extended pursuant to the
terms hereof. Unless either Executive or Employer give written notice at least
twelve (12) months prior to the end of the Term of their intention not to have
this Agreement renew, this Agreement shall automatically renew for two
additional one (1) year terms (the “Additional Terms”) at the expiration of the
Term. For purposes of this Agreement, each Additional Term shall be considered
to be a part of the Term hereof.
(b) Employer
shall have the right to terminate the Executive's employment hereunder at any
time during the Term; provided, however, that unless such termination is for
"cause", as defined below, Executive shall be entitled to receive his Base
Salary (as defined herein) and all insurance benefits provided on the date
of
such termination for the remaining Term (without taking into consideration
any
Additional Term(s) which have not already commenced). In addition, in the event
Executive’s employment is terminated without “cause”, for the remaining Term of
this Agreement (without taking into consideration any Additional Term(s) which
have not already commenced), Executive shall be entitled to an annual payment
equal to the commissions earned by Executive under Section 4(b) hereof for
the
proceeding fiscal year. Such payments shall be made in accordance with
Employer's normal payroll practices. If such termination is for "cause",
Executive shall not be entitled to receive any compensation from and after
the
date of such termination; provided, however, that Executive shall be entitled
to
payments for periods, or partial periods, that occurred prior to the date of
termination and for which Executive has not yet been paid. For purposes of
this
Agreement, "cause" means (i) the Executive's willful and continued failure
substantially to perform the duties of the Position, (ii) fraud,
misappropriation or other deliberate dishonesty of Executive with respect to
Employer's business or property, (iii) the Executive's plea of guilty to or
conviction of, or plea of nolo
contendere
to, any
felony that, in the reasonable judgment of the Board of Directors of
Employer
2
(the
"Board"), adversely affects Employer's reputation or the Executive's ability
to
perform his duties hereunder; or (iv) Executive's willful violation of (A)
any
law, rule or regulation relating to the business of Employer and Sussex, or
(B)
final cease-and-desist order issued by or regulatory consent agreement with
any
regulatory agency having jurisdiction over the Employer and/or
Sussex.
(c) This
Agreement shall terminate upon Executive's death or his disability, as defined
herein. Upon Executive's death or his disability, the obligation of Employer
hereunder to pay Executive the compensation called for under Section 4 hereof
shall terminate, and Employer’s only obligation shall be to pay Executive any
and all benefits to which Executive was entitled at the time of such death
or
disability under any benefit plans of Employer then in place. For purposes
of
this Agreement, the term "disability" shall mean Executive's inability to
substantially perform his material duties as prescribed in this Agreement due
to
his incapacity or disability, physical or mental, for a period of six (6)
consecutive months.
3. Duties.
(a) Subject
to the ultimate reasonable control and discretion of the Board of Directors
of
Employer, the Executive shall serve in the position and perform all the duties
and services as President of the Employer. The duties of the President shall
include the following: assume the day to day management of Employer, new
business production and renewals resulting from Sussex referrals; the
supervision of the Employer staff and participation with Sussex officers and
staff in implementing a Sussex specific sales culture; tracking cross-selling
system (the BVS cross-selling program), including review and reporting of
monthly results; solicit and prospect potential agency acquisitions; actively
solicit new commission sources; continue maintaining accounts gained by the
Garrera Agency acquisition as a duty without commission compensation for
accounts existing as of the date hereof; negotiate and recommend to the Board
of
Directors of
3
Employer
the annual renewal of Employer's Errors and Omissions Policy; assist the
Employer's Board of Directors in the annual review and update of the Employer
Strategic Plan including management continuity; and the continuing sales
production of commercial, personal, life and health insurance products of
Employer including obtaining and retaining the necessary licenses required
by
Employer.
(b) The
Executive shall devote all of the Executive's professional time and attention
to
the performance of the Executive's duties hereunder and, during the term of
the
Executive's employment hereunder, shall not engage in any other business
enterprise which, in the reasonable, good faith opinion of the Board, interferes
with Executive’s performance of the duties set forth in subparagraph (a) above.
The foregoing shall not prevent the Executive's purchase, ownership or sale
of
investment securities or of any interest in, any business which competes with
the business of Employer, provided that such ownership or investment constitutes
not more than five percent 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, or
the
Executive's involvement in charitable or community activities, provided that
the
time and attention which the Executive devotes to such activities does not
materially interfere with the performance of the Executive's duties
hereunder.
4. Compensation
pursuant to this Agreement
(a) For
all
services to be rendered by the Executive under this Agreement, Employer agrees
to pay the Executive a salary of $50,000 annually, to be paid in bi-weekly
installments (the “Base Salary”), said Base Salary to be adjusted annually on
January 1st
for
applicable CPI increases;
(b) In
addition to the Compensation provided for under subsection (a), Executive shall
be entitled to receive commissions produced by Executive after January 1, 2007
in
4
accordance
with Schedule A which schedule may be adjusted by mutual consent as deemed
necessary by the parties based upon business decisions related to market
conditions, staff changes and the like. Said commissions to be paid quarterly
to
Executive by the 30th
day of
the following month (i.e. January 1st
through
March 31st
shall be
paid by April 30th,
April
1st
through
June 30th
shall be
paid by July 30th;
July
1st
through
September 30th
shall be
paid by October 30th,
and
October 1st
through
December 31st
shall be
paid by January 30th.).
(c) In
addition to the Compensation provided for under subsections (a) and (b),
Executive shall be entitled to participate in those employee benefit plans
generally made available to executive officers of Sussex .
(d) The
parties acknowledge and agree that Executive's compensation shall be reviewed
each year during the term of this agreement, said review to commence no later
than September 1st
of each
year of the term hereof.
5. Additional
Covenants.
(a) Confidential
Information.
Except
as required in the performance of his duties hereunder, the Executive shall
not
use or disclose to any third party any Confidential Information (as hereinafter
defined) or any know-how or experience related thereto without the express
prior
written authorization of the Bank, either during the term of this Agreement
or
thereafter. Upon termination of his employment, the Executive shall leave with
Employer all documents and other items in his possession which contain
Confidential Information, and shall be prohibited from disclosing to any third
party any Confidential Information. For purposes of this Section 6(a), the
term
"Confidential Information" shall mean all information about Employer and Sussex
or relating to any of their respective services or any phase of their respective
operations not generally known to any of their competitors and which is treated
by Employer and Sussex as
5
confidential
information, and shall specifically include all customer lists of Employer
and
Sussex.
The
term
“Confidential Information” shall not include any of the foregoing which (i) is
in the public domain, (ii) is in Executive’s lawful possession prior to a
disclosure thereof and not subject to a confidentiality agreement or (iii)
is
hereafter lawfully disclosed to Executive by a third party who or which did
not
acquire the information under an obligation of confidentiality to
Employer.
(b) Non-Solicitation
|
Executive
agrees that for a period of six (6) months following the termination
of
this Agreement, he will not recruit for employment or induce to terminate
his or her employment with Employer and Sussex any person who is,
at the
time of such solicitation, or who was within thirty (30) days of
such
solicitation, an employee of Employer and/or Sussex.
|
(c) Non-Piracy
|
Executive
agrees that for a period of six (6) months following the termination
of
this Agreement, he will not directly or indirectly solicit, cause
any
other person to solicit, or assist any other person with soliciting
any
customer, clients being quoted or customers of Employer and/or Sussex.
|
(d) Modification.
If a
court of competent jurisdiction determines that the scope, time duration or
other limitations of any of the restrictive covenants contained in this Section
5 are not reasonably necessary to protect the legitimate business interests
of
Employer and Sussex, then such scope, time duration or other limitations will
be
deemed to become and thereafter will be the maximum time period or scope which
such court deems reasonable and enforceable.
(e) Definitions.
For
purposes of this Section 5, to act "directly or indirectly" means to act
personally or through an associate, affiliate, family member or otherwise,
as
proprietor, partner, shareholder, director, officer, employee, agent, consultant
or in any other capacity or manner whatsoever.
6
(f) Specific
Performance.
Employer and the Executive agree that in the event of a breach of the provisions
of this Section 5, the injury which would be suffered by Employer and Sussex
would be of a character which could not be fully compensated for solely by
a
recovery of monetary damages. Accordingly, Executive agrees that in the event
of
a breach of the terms of this Section 5, in addition to and not in lieu of
any
other remedies which Employer may pursue, Employer shall have the right to
equitable relief, including issuance of a temporary or permanent injunction
by
any court of competent jurisdiction against the commission or continuance of
any
breach of this Section 5.
6. Notices.
Any
and
all notices, demands or requests required or permitted to be given under this
Agreement shall be given in writing and sent, (i) by registered or certified
U.S. mail, return receipt requested, (ii) by hand, (iii) by overnight courier
or
(iv) by telecopier addressed to the parties hereto at their addresses set forth
above or such other addresses as they may from time-to-time designate by written
notice, given in accordance with the terms of this Section, together with copies
thereof as follows:
In
the
case of Executive, with a copy to:
Tri-State
Insurance Agency
00
Xxxxxxx 000
Xxxxxxx,
Xxx Xxxxxx 00000
Telecopier
No. (000) 000-0000
Attention:
Xxxxxx Xxxxxx
In
the
case of Employer, with a copy to:
Xxxxxxx
Xxxx Xxxx & Xxxxxxxxxx, LLP
000
Xxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Telecopier
No. (000) 000-0000
Attention:
Xxxxxx X. Xxxxxxxx
7
Notice
given as provided in this Section shall be deemed effective: (i) on the date
hand delivered, (ii) on the first business day following the sending thereof
by
overnight courier, (iii) on the seventh calendar day (or, if it is not a
business day, then the next succeeding business day thereafter) after the
depositing thereof into the exclusive custody of the U.S. Postal Service or
(iv)
on the date telecopied.
7. Assignability.
The
services of the Executive hereunder are personal in nature, and neither this
Agreement nor the rights or obligations of Executive hereunder may be assigned,
whether by operation of law or otherwise. This Agreement shall be binding upon,
and inure to the benefit of, Employer and its Successors and assigns. This
Agreement shall inure to the benefit of the Executive's heirs, executors,
administrators and other legal representatives.
8. Waiver.
The
waiver by Employer or the Executive of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any
subsequent or other breach hereof.
9. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New Jersey without giving effect to principles of conflict of
laws.
10. Entire
Agreement.
This
Agreement contains the entire agreement of the parties hereto with respect
to
the subject matter hereof and may not be amended, waived, changed, modified
or
discharged, except by an agreement in writing signed by the parties
hereto.
11. Counterparts.
8
This
Employment Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which taken together shall constitute
one
and the same instrument.
12. Amendment.
This
Employment Agreement may be modified or amended only by an amendment in writing
signed by both parties.
13. Severability.
If
any
provision of this Employment Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision, only
to
the extent it is invalid or unenforceable, and shall not in any manner affect
or
render invalid or unenforceable any other severable provision of this Agreement,
and this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
14. Section
Headings.
The
headings contained in this Agreement are solely for convenience of reference
and
shall be given no effect in the construction or interpretation of this
Employment Agreement.
15. Fees
and Expenses.
If
any
party to this Employment Agreement institutes any action or proceeding to
enforce this Employment Agreement, the prevailing party in such action or
proceeding shall be entitled to recover from the non-prevailing party all legal
costs and expenses incurred by the prevailing party in such action, including,
but not limited to, reasonable attorneys’ fees and other reasonable legal costs
and expenses.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement under their respective hands and
seals as of the day and year first above written.
10
|
ATTEST:
|
TRI-STATE
INSURANCE AGENCY, INC.
|
||
|
By:
|
|||
|
|
XXXXXX
X. XXXXXX, CHAIRMAN
|
||
|
WITNESS:
|
EXECUTIVE:
|
||
|
|
|||
|
XXXXXX
X. XXXXXX
|
|||
11
Schedule
A
PERCENTAGE
OF AGENCY COMMISSIONS TO BE PAID TO EXECUTIVE
FROM
AND
AFTER JANUARY 1, 2007
|
Agency
Commissions received from Property and Casualty sales produced by
Executive excluding Bank Referred Personal Lines unless related to
a major
commercial account
|
Executive
Commissions Including Sussex Bank Referral Produced
Exclusively
by Executive
|
|
|
New
Business
|
Renewals
|
|
|
$75,000
or less
|
50%
|
35.0%
|
|
$75,000-$100,000
|
55%
|
35.0%
|
|
$100,000-$125,000
|
60%
|
35.0%
|
|
$125,000-$150,000
|
65%
|
35.0%
|
|
$150,000-$175,000
|
70%
|
35.0%
|
|
$175,000-$200,000
|
75%
|
35.0%
|
|
$200,000-$250,000
|
75%
|
35.0%
|
|
Over
$250,000
|
75%
|
35.0%
|
|
Agency
commission resulting from sales by Executive of Life Insurance:
50%
of agency commission.
|
11
Schedule
B
Present
and continuing outside activities and business interests:
Xxxxxx
Xxxxx & Xxxxxx Xxxxxx combined:
|
·
|
TSI
Leasing, Inc. - Small Auto & Equipment Leasing
Company
|
|
·
|
Xxxxxx
Company, Inc. - Bermuda Re-Insurance
Rent-A-Captive
|
Xxxxxx
Xxxxxx Only:
|
·
|
Xxxxxx
Farms, Inc. - Farming & Real Estate & Development
Company
|
|
·
|
Xxxxxx
Partners - Real Estate & Development
Company
|
|
·
|
Chairman
of Sussex County Crimestoppers
|
|
·
|
Treasurer
of Xxxxxx Xxxxx for Sheriff
Campaign
|
|
·
|
Councilman/Mayor
of Sandyston Township
|
|
·
|
Sussex
County Committee - Republican
|
12
