EMPLOYMENT AGREEMENT
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Exhibit
10.1
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THIS EMPLOYMENT AGREEMENT (the “Agreement”) made
effective as of May 18, 2010 by and among CITY NATIONAL BANK OF NEW JERSEY (the
“Bank”) a
national banking association, CITY NATIONAL BANCSHARES CORPORATION (the “Corporation”), a New
Jersey corporation, each with its principal office at 000 Xxxxx Xxxxxx, Xxxxxx,
Xxx Xxxxxx (the Bank and the Corporation sometimes collectively referred to as
the “Employer”), and XXXXX
X. XXXXXXX (“Executive”).
WHEREAS, the Corporation is a bank
holding company, and the Bank is a wholly-owned subsidiary of the Corporation;
and
WHEREAS, the Bank, the Corporation and
the Executive have previously entered into an Employment Agreement effective as
of May 25, 2003, which Employment Agreement was revised, amended and extended
pursuant to an Employment Agreement effective as of May 26, 2006 and is hereby
further revised, amended and extended pursuant to and in accordance with the
terms of this Employment Agreement; and
WHEREAS, the Bank and the Corporation
desire to continue to retain the services of Executive as President and Chief
Executive Officer of the Corporation and the Bank for the period provided in
this Agreement and subject to the terms and conditions hereof; and
WHEREAS, Executive is willing to serve
in the employ of the Bank and the Corporation as President and Chief Executive
Officer on a full-time basis for said period 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 Section
1(c), during the period of his employment hereunder, Executive shall
serve as President and Chief Executive Officer of the Corporation and the
Bank. Subject to the provisions of Section 1(c), Executive shall
have such duties as are customarily or appropriately vested in the President and
Chief Executive Officer of a publicly-held bank holding company and a national
bank, and as from time to time may be prescribed by the Board of Directors of
the Corporation (the ”Board”), provided
such duties are consistent with Executive's present duties and with Executive's
current position as the President and Chief Executive Officer of the Employer;
provided further an initial, non-exhaustive set of the Executive’s goals and
objectives are attached hereto as Exhibit A. 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) During
the period of employment hereunder, Corporation shall elect Executive as a
director of the Bank and shall nominate and recommend the Executive for election
as a director of the Corporation.
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(c) 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 of the Corporation and/or 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. In any such event, the Executive’s compensation and benefits
pursuant to this Agreement shall not be impacted thereby. The
Executive acknowledges that the Board is currently seeking a candidate for the
position of President.
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 for a
period of one (1) year thereafter, provided, however, that this Agreement shall
automatically be renewed for successive one (1) year terms thereafter unless
either party gives the other notice to terminate this Agreement at the
expiration of the then current term, at least 180 days prior to the expiration
of said term.
3. COMPENSATION
AND RELATED MATTERS.
(a) Salary.
As compensation for the responsibilities and duties described in Section 1, the Employer shall
pay Executive an annual salary of $268,000 (such annual salary as adjusted from
time to time, the “Base Salary”),
payable biweekly. Executive's Base Salary may be increased at the discretion of
the Board for any renewal period under this Agreement. At Executive's option and
expense, the Executive may defer part of his Base Salary; provided (a)
Executive’s deferral election is made at a time and in a manner so as to comply
with Section 409A of the Internal Revenue Code and the regulations promulgated
thereunder (a “Complying Deferral
Election”), and (b) Executive is responsible for making all necessary
arrangements for such deferral (with respect to any trusts or other agreements
relating thereto). In addition to his Base Salary, Executive shall be
entitled to the same director's fees as other directors of the Bank and the
Corporation.
(b) Employee
Benefits. So long as Executive shall be employed hereunder, the Employer
shall provide Executive, at no cost to Executive, with all such other benefits
as are provided uniformly to permanent full-time employees of the
Bank.
(c) Expenses.
In addition to the salary and other benefits provided hereunder, the Employer
shall reimburse Executive for all reasonable travel, commutation and other
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) Life
Insurance. So long as Executive is employed by the Employer hereunder,
the Employer shall pay, for the benefit of Executive, 100% of that amount of
annual premium on life insurance policy no. 37-627041 issued by the Equitable
Life Insurance Company as is allocable to a death benefit of up to three (3)
times the Executive's annual Base Salary then in effect. Executive is
authorized to amend and/or supplement such policy to increase the death benefit
to three (3) times his current Base Salary. Executive shall be the owner of such
life insurance and shall be entitled to exercise all rights of ownership of such
life insurance, including naming the beneficiary of such life
insurance.
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(e) Automobile.
So long as Executive is employed hereunder, the Employer shall provide
Executive, for his exclusive use, with an automobile of Executive's choice (new
or used), having a lease cost not in excess of $1,200 per month and which is no
more than three (3) years old. The Employer shall pay (or reimburse Executive
for) all expenses related to the operation, maintenance and up-keep of such
automobile, including insurance, gas, service and repairs.
(f) Vacation.
Executive shall be entitled to six weeks paid vacation per year, of which up to
two weeks vacation may be carried forward to the next year (entitling Executive
to a maximum of eight weeks vacation in any one year if two weeks of vacation
from the prior year were not used). Time spent at banking conventions shall not
be counted as vacation time. Executive will be compensated for all unused
vacation at the termination of his employment for any reason (to extent
Executive would have been entitled to such vacation time in the year of
termination).
(g)
Conventions. Employer shall reimburse Executive for all expenses related
to (i) his attendance at three banking conventions a year selected by the
Executive (such as the National Bankers Association, the New Jersey Bankers
Association and the American Bankers Association, etc.); and (ii) his spouse’s
attendance at the same conventions, but only to the extent the presence and
activities of his spouse for which such expenses are incurred complement and
assist Executive in satisfying Employer’s objectives at such
conventions.
(h) Financial
Tax/Legal Consultant. Employer shall reimburse Executive for expenses
related to the consultation of a financial tax/legal consultant for his personal
finances. This benefit is available for one time anytime during the term of this
Agreement.
(i) Annual
Medical Checkup. Employer shall reimburse Executive for the expenses
related to an annual, complete physical.
(j) Performance
Bonus. Executive shall be entitled to an annual performance
bonus, except as prohibited by, limited by, or inconsistent with, the American
Recovery and Reinvestment Act of 2009 (“ARRA”) covering firms
that received financial assistance under TARP (as defined in Section 14), as ARRA and its
interpretive rules and guidance may be supplemented or amended from time to
time. Such bonus shall be calculated based upon the City National
Bank Cash Incentive Plan, implemented in 2010, or as subsequently amended or
revised.
(k) Restricted
Stock, Restricted Units, Stock Options. The Board will
consider each year in connection with the Executive’s annual review the granting
of restricted stock shares or units or stock options to purchase shares of the
Corporation’s common stock, except as prohibited by, limited by or inconsistent
with, ARRA covering firms that received financial assistance under TARP, as ARRA
and its interpretive rules and guidance may be supplemented or be amended from
time to time.
4. TERMINATION
UPON DISABILITY.
(a) Employer
may terminate Executive's employment hereunder upon the occurrence of Executive'
Disability. As used herein, the terms “Disability” or “Disabled” shall mean
the inability of the Executive, by reason of injury, illness or other similar
cause, to perform a major part of his duties and responsibilities in connection
with the conduct of the business and affairs of the Employer for a period of six
(6) consecutive months. The determination of whether the Executive is Disabled
shall be made by the majority vote of the Board, whose decision on this matter
shall be final. Executive hereby authorizes any physician, hospital or health
care professional to furnish to the Employer medical records covering his health
or physical condition, but only in the event that Executive is unable to perform
a major part of his duties or responsibilities for one (1)
month. Executive shall cooperate with the Employer by executing
whatever documents, and taking whatever actions, that will be reasonably
required under applicable law to permit Employer’s access to such medical
records.
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(b) Upon
termination for Disability, Executive shall be entitled to receive all
compensation and benefits under Section 3 of this Agreement
accrued through the date of such termination. In addition, the Executive shall
be entitled to long term disability benefits which shall be provided pursuant to
(i) any group disability insurance policy in which Executive is a participant
and (ii) an additional long-term disability policy providing such amount of
disability benefit as is necessary to cause the total amounts of disability
benefits under this Section
4(b), exclusive of amounts referred to in the first sentence of this
Section 4(b), to equal
two-thirds of the Executive's annual Base Salary in effect at the time of
termination for Disability. Premiums on the additional policy
referred to in the preceding clause (ii) shall be paid by Employer so long as
Executive shall be employed hereunder.
5. TERMINATION
UPON DEATH. Executive's employment hereunder shall be immediately
terminated upon his death, in which case Employer shall pay Executive's
beneficiaries or his estate: (a) the amount of any accrued but unpaid Base
Salary pursuant to Section
3(a), and (b) Executive's other accrued and unpaid benefits pursuant to
Section 3. In addition,
the Employer shall continue all health insurance benefits for Executive's family
member (which his family members were receiving on the date of death) for one
(1) year after the date of death at the Employer's expense. Thereafter, the
Employer shall have no further obligation to compensate Executive except as
expressly provided in this Agreement.
6. TERMINATION
FOR CAUSE.
(a) Employer
may, at any time, terminate the Executive's employment for “cause”, defined as:
(i) breach of fiduciary duty involving personal dishonesty (ii) commission of a
felony or of a misdemeanor involving dishonesty or moral turpitude, or (iii)
commission of embezzlement or fraud against Employer or any of its affiliates,
in each case which is material in amount or in injury to the Employer or its
reputation, (iv) continuous or habitual alcohol or drug abuse, (v) habitual
unexcused absence, or (vi) continuous gross negligence or willful disregard for
his duties hereunder. For purposes of this Section, no act, or the failure to
act, on Executive's part shall be considered “willful” unless such
act or failure to act was in bad faith, and without reasonable belief that the
action or omission was in the best interests of the Employer.
(b) Upon
termination of Executive's employment for “cause,” Executive shall be entitled
to receive only the amount of any compensation and benefits accrued and unpaid
pursuant to Section 3 of
this Agreement, but shall be entitled to no further compensation or benefits
hereunder.
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7. TERMINATION
WITHOUT CAUSE: FAILURE TO RENEW SEVERANCE. Except as otherwise
provided herein, upon (a) the termination of Executive's employment by the
Employer without “cause,” or (b) the expiration of this Agreement, if the
Employer shall fail to offer to renew this Agreement, the Employer shall pay to
Executive (i) the amount of any accrued but unpaid compensation
pursuant to Section 3,
and (ii) Executive's other accrued and unpaid benefits pursuant to Section 3.
8. CONTINUATION
OF BENEFITS FOLLOWING TERMINATION. In the event Executive's Employment is
terminated pursuant to Section
4, hereof, the Employer shall cause to be continued for two (2) years
following the date on which Executive's employment is terminated, life and
health coverage substantially identical to any group coverage in which Executive
participated prior to termination, provided, however, that the Employer's
obligation under this Section
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Executive's full-time employment by another employer, or (ii) the Executive's
death (subject to the provisions of Section 5).
9. TERMINATION
BY EXECUTIVE. The Executive may at any time voluntarily
terminate his employment hereunder (without any obligation or liability to the
Employer) by giving Notice of Termination in accordance with Section 10 hereof, in which
case Executive shall be entitled to receive the amount of any
accrued but unpaid compensation and benefits pursuant to Section 3 as of the date of
such termination, but shall be entitled to no further compensation or benefits;
provided, if the Executive terminates his employment hereunder as a result of a
breach of this Agreement by the Employer nothing in this Section 9 is intended to limit
the Executive’s remedies therefor.
10. NOTICE OF
TERMINATION. Any purported termination by the Executive or by the
Employer shall be communicated by a Notice of Termination (as defined below) to
the other party thereto. For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the
specific termination provisions in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated. Unless otherwise specified therein, a Notice of Termination shall be
deemed effective in accordance with Section 20.
11. NON-COMPETITION;
NON-DISCLOSURE.
(a) Upon
(i) voluntary termination by the Executive of his employment hereunder for any
reason other than as a result of a 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
60 mile radius from the Bank's main office located at 000 Xxxxx Xxxxxx, Xxxxxx,
Xxx Xxxxxx or within a five (5) 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.
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(b) 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.
12. EFFECT ON
PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS. This Agreement contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between or among the Bank, the Corporation and
Executive.
13. BINDING
EFFECT. This Agreement shall be binding upon, and inure to the benefit
of, Executive, the Bank, the Corporation and their respective heirs, personal
representatives, successors and assigns.
14. 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 the Corporation 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
14(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 14 to
modify the provisions of this Agreement shall expire when the 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.
15. 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.
16. 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.
17. 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.
18. 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. Notwithstanding the foregoing, Employer
may seek an injunction or other equitable relief in a court of competent
jurisdiction regarding violations of the Executive's covenants set forth in
Section 11.
19. REFERENCES
TO EMPLOYER; CONSTRUCTION. All references to Employer shall mean each of
the Bank and the Corporation, and both of them collectively, as the context may
require. All compensation, benefits and other amounts paid to Executive are from
the Bank and the Corporation collectively, and nothing herein shall be deemed to
entitle Executive to duplicate compensation or benefits. 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.
20. 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 Bank and/or the
Corporation:
City National Bank of New
Jersey
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Chairman of the Board
of Directors
If to Executive:
Xxxxx X. Xxxxxxx
00-00 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx
00000
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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.
21. 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 Company 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.
[Signature
is on following page]
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IN WITNESS WHEREOF, the Bank and the
Corporation have caused this Agreement to be executed by their duly authorized
officers, and the Executive has duly executed this Agreement.
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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/s/
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Xxxxxx
Xxxxxxxx, Chairman of the Board
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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/s/
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Xxxxxx
Xxxxxxxx, Chairman of the Board
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/s/Xxxxx
X. Xxxxxxx
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Xxxxx
X. Xxxxxxx, Executive
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