EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made as of _____ day of March,
2000, by and between THE BANK OF SOMERSET HILLS, a New Jersey state chartered
commercial bank ("Employer" or the "Bank"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an
individual residing at _____________ (the "Executive").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Exchange Agreement (the "Exchange
Agreement") by and among the Bank, Executive and ▇▇▇▇▇▇▇▇ Financial Services,
Inc. (the "Company") the Bank is acquiring from Executive all of the common
stock of the Company, to operate as a wholly-own subsidiary of the Bank;
WHEREAS, Executive is the Chief Executive Officer of the Company, and his
continued services are crucial to the continued success of Company's operation
as a subsidiary of the Bank;
WHEREAS, the Bank desires to retain the Executive's services, and Executive
wishes to continue his employment with the Company on the terms and conditions
contained herein;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment and Term.
(a) Employer hereby employs the Executive as President of the Company (the
"Position") and the Executive agrees, subject to the termination provisions
hereof, to serve as President and Chief Executive Officer of the Company, for a
term of three years (the "Term"),
which shall commence on the date hereof (the "Effective Date"), and which,
subject to paragraphs 1(b), and (c), hereof, shall terminate on the third
anniversary of the Effective Date; unless extended by the mutual agreement of
Executive and Employer.
(b) Employer shall have the right to terminate the Executive's employment
hereunder prior to the third anniversary of the Effective Date; 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 of this Agreement and his Bonus (as defined herein) up through
the date of such termination; provided, however, that for purposes of
determining whether Executive is entitled to any Bonus upon such termination and
thereafter, the Company's net income for the year of termination, calculated in
accordance with Section 3(a), will be measured by using expenses accrued or
incurred to date (and pro rated if such expenses have been prepaid for a year)
against a pro rata portion of the Target (as defined herein), giving effect to
the number of months which have transpired up until such termination. 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 his Base Salary and any benefits due 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, material misappropriation or
other deliberate dishonesty of Executive with respect to
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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 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 materially effecting the business of Employer, or (B) final
cease-and-desist order issued by or regulatory consent agreement with any
regulatory agency having jurisdiction over the Bank or the Company. Executive
shall have the right to cure any alleged acts, conditions or events which
Employer believes constitute "cause" under subparagraph (i) above, within thirty
(30) days of his receipt of written notice specifying in reasonable detail such
acts, conditions or events, and such specific acts, conditions or events if so
remedied, shall not then constitute "cause."
(c) In order for Employer to terminate Employee's employment hereunder for
"cause", Employer shall:
(i) Transmit written notice (the "Initial Notice") to Executive of
Employer's determination of the existence of cause, specifying the nature
of the conduct or event constituting cause. If the grounds for cause shall
be pursuant to subparagraph (b)(ii), (iii) or (iv) set forth above,
Executive shall be immediately suspended from his duties hereunder and
shall have no right to access to the premises of either the Employer or the
Company. In the event the alleged grounds for cause are those set forth
under subparagraph (b)(i) above, Executive shall have thirty (30) days to
cure such alleged cause, assuming the cause is curable, as set forth in
paragraph (b) above. If Executive disputes Employer's determination as to
the existence of cause as set forth in the Initial Notice, the Executive
shall, within ten (10) days of receipt of the Initial
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Notice, transmit a written notice (the "Second Notice") of his intention to
contest such termination to the Employer. Within five (5) days of the
receipt of the Second Notice, Employer shall either (i) transmit written
notice ("Third Notice") to Executive withdrawing, in all respects, the
Initial Notice and the purported termination of this Agreement or (ii)
submit the issue of whether cause exists to arbitration as provided below.
(ii) Executive's employment hereunder shall be suspended as provided
for under subparagraph (i) above from either the date of the Initial Notice
or thirty (30) days thereafter (assuming the cause is not cured) as
provided under paragraph (i) above until such time as the Arbitrator called
for under paragraph (d) renders a definitive decision. During the time of
such suspension, Employer shall not be required to pay to Executive any
compensation to which he would have otherwise been entitled under Section 3
hereof but rather Employer shall place into escrow such cash compensation;
provided, however, that during the term of such suspension, Employer shall
maintain in full force and effect all policies of insurance covering
Executive in effect as of the date of such suspension for the benefit of
the Executive. In the event an Arbitrator shall rule that cause did not
exist for Executive's termination, the Arbitrator shall be limited in his
award to Executive to directing the payment over to Executive of amounts in
the escrow account. In the event the Arbitrator rules that cause did exist
to terminate Executive, Employer shall be refunded all funds in the escrow
account and the Arbitrator shall not be entitled to award other damage;
provided, however, that this provision shall not prohibit the Bank from
initiating an action to seek restitution in the event of fraud or
embezzlement by Executive.
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(d) In the event that Employer and Executive do not agree on the issue of
whether cause exists to terminate this Agreement as set forth in an Initial
Notice, the dispute shall be submitted to arbitration in accordance with the
Rules of the American Arbitration Association then obtaining. Such arbitration
shall be held in the County of Essex, State of New Jersey (or next closest site
should there be no AAA location in Essex County) before an Arbitrator familiar
with the banking industry and the decision of the Arbitrator shall be binding
and the award of the Arbitrator shall be enforceable in any court of competent
jurisdiction. The Arbitrator shall be limited in his or her award in the manner
set forth in subparagraph (c)(ii) above, and the Arbitrator shall also award
costs, including attorney's fees, to the prevailing party, to be paid by the
non-prevailing party.
(e) 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 3 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 determination by the Panel of 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,
which, following a written request by either Employer or Executive, shall be
determined by agreement between the parties hereto and, if the parties cannot
agree, by a panel (the "Panel") of three (3) physicians, one of whom will be
selected by Employer, one by Executive and the third will be selected by the
first two physicians so selected. Executive shall
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be entitled to receive his full salary and benefits under this Agreement until
the date of the Panel's determination and his Bonus prorated to the date of such
determination or his death, provided Executive would have been entitled to a
bonus based upon his pro rata achievement of the Target. The Panel's
determination shall be conclusive.
(f) Notwithstanding paragraph (a) hereof, Executive may resign from the
Position, and have no further obligations under this Agreement, other than those
contained in Section 4(a) hereunder, upon the occurrence of any of the following
events:
(i) Employer shall have breached any of its duties or obligations to
Executive pursuant to this Agreement or pursuant to the Exchange Agreement
by means of, among other things, causing a material reduction in
Executive's status, authority, responsibility or standing with the Company
or by reducing Executive's Base Salary (as defined herein), failing to pay
Executive any bonus to which he is entitled hereunder, or reducing
Executive's fringe benefits, such as insurance or other benefits, unless
such reduction in fringe benefits is part of an overall reduction effecting
all executive officers of the Bank; provided, however, that Executive shall
not be entitled to terminate this Agreement until such time as he has
provided Employer with written notice of any alleged breach and Employer
has failed to cure such breach within thirty (30) days of receipt of such
notice; further provided, however, that in the event that any alleged
breach is of a type which cannot be cured during such thirty (30) day
period, Executive shall not have the right to terminate this Agreement so
long as Employer is making its best efforts to remedy such breach within
thirty (30) days of receipt of Executive's notice and continues to use such
best efforts thereafter and such breach is ultimately cured within 75 days
of such notice;
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(ii) A "change in control of the Bank" (as such term is defined under
Section 1.2(b) of the Exchange Agreement), shall have occurred and within
six (6) months there shall occur (a) a material reduction in Executive's
status, authority, responsibility or standing within the resulting entity,
(b) Executive's compensation, including the Bonus or fringe benefits, such
as insurance or other benefits, shall be materially reduced; or (c)
Executive's principal place of business is relocated by more than thirty
(30) miles from its location prior to the change in control;
(iii) The relocation of Employer's principal place of business in
which Executive usually performs his job duties to a location more than
thirty (30) miles from its current location as of the date of this
Agreement, without Executive's written consent; provided, however, that
Executive acknowledges that he may be required to work at Employer's
Bernardsville, New Jersey headquarters and that this will not be considered
a relocation of Executive's location hereunder;
(iv) The appointment of a receiver or conservator for the Bank by the
Federal Deposit Insurance Corporation or the New Jersey Department of
Banking and Insurance; or
(v) Failure by Employer to provide the Company with sufficient capital
to remain approved as a lender by the Department of Veteran's Affairs and
the Department of Housing and Urban Development.
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In the event of any such resignation under this Section 1(f), Executive
shall be entitled to receive his Base Salary and Bonus as if he had been
terminated without cause under Section 1(b).
In the event Employer disputes whether Executive has the right to resign
under this Section 1(f), such matter shall be submitted to arbitration in
accordance with Sections 1(c) and (d) hereof, except that the notification
provisions shall be reversed with Executive giving the Initial Notice and
Employer responding.
(g) Executive shall be entitled to indemnification from the Bank to the
fullest extent provided for under the Bank's bylaws as currently constituted or
amended provided that any amendment will not reduce the protection afforded to
Executive.
2. 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 duties and services as President and Chief Executive of the Company and
shall have full authority and responsibility to undertake and carry out the
functions and activities of the Position.
(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 requires more than five hours per week of the
Executive's personal time or attention, unless granted the prior permission of
the Board. 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 (although, prior to the termination of
this Agreement,
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Executive shall not be allowed to actively participate in the management or
operation of such enterprise), 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.
3. Compensation.
(a) For all services to be rendered by the Executive under this Agreement,
Employer agrees to pay the Executive as follows: (i) a salary of $125,000
annually, to be paid in accordance with the Bank's existing payroll policies
(the "Base Salary"); (ii) a bonus (the "Bonus") to be paid annually, equal to
1/3 of the amount by which the net income of the Company as a subsidiary of the
Bank for each year of operation (which may be less than twelve (12) months in
the year of Closing) after the Date of Closing exceeds $180,000 on an annual
basis, or such appropriate pro rated amount (the "Target"). The net income of
the Company shall be determined consistent with generally accepted accounting
principals, but shall exclude the impact of the amortization of the good will
and other depreciation, acquisition or amortization expenses created by the
Bank's acquisition of the Company pursuant to the Exchange Agreement. In
calculating the net income of the Company, the Bank shall pass through to the
Company only those administrative expenses incurred by the Bank on behalf of the
Company directly related to the operations of the Company for such items as
bookkeeping,
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human resources administration, payroll and like administrative services. Except
at set forth herein, no Bank general and administrative expenses will be charged
against the Company's net income for determining the Bonus. Such administrative
charges will be passed through to the Company at the Bank's cost, without any
markup or profit. All extensions of credit from the Bank to the Company, such as
by means of a warehouse line of credit or otherwise, will be upon arm's length
terms and shall have rates and charges comparable to those otherwise available
to the Company from unaffiliated, third party lenders at fully phased in,
non-discounted or non-promotional rates. Should Executive believe that any such
interest fees and expenses are in excess of the rates and fees available from
unaffiliated third parties, Executive shall have the right to obtain commitments
from unaffiliated, third party financial institutions to offer substantially
similar credit products to the Company. The Bank may either (i) reduce the
interest fees and expenses assessed against the Company to match the rates
offered by such unaffiliated financial institution as reflected in such
commitment, or (ii) permit the Company to obtain its credit products from the
unaffiliated financial institution. The amount of the Bonus, if any, will be
determined based upon the Bank's audited financial statements and will be paid
within thirty (30) days of the release of such statements.
(b) In addition to the compensation provided for under subparagraph (a)
hereof, Executive shall be entitled to receive insurance of the type provided
under the Bank's existing and future benefit plans available to Employer's
executive employees generally. Exhibit A hereto contains a listing of the
current insurance and benefit plans offered by Employer.
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4. 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 Employer,
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 paragraph 4(a), the term "Confidential Information" shall mean
all information about Employer and the Company or relating to any of its
services or any phase of its operations not generally known to any of its
competitors and which is treated by Employer or the Company as confidential
information, and shall specifically include all customer lists of Employer and
Company.
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-Compete. Executive hereby agrees that during the term of this
Agreement and, for a period of six (6) months following the termination of
Executive's employment hereunder, only to the extent that such termination is
initiated by Employer with cause under Section 1(b) or by Executive other than
pursuant to Section 1(f) (the "Covenant
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Term"), he will not work for any entity which is engaged in the residential
mortgage origination business in geographic areas served by Employer as of the
Term of this Agreement and as of the date of its termination nor himself so
engage during such Covenant Term, directly or indirectly, as principal, agent,
partner, shareholder, consultant, or employee, in any such business and further
that during such period he will not directly or indirectly solicit, cause any
other person to solicit, or assist any other person with soliciting any
customer, depositor or borrower of Employer to become a customer, depositor or
borrower of another financial institution. Executive further agrees that during
the term of his employment and during the Covenant Term, he will not directly or
indirectly participate in the solicitation of any person, entity, customer or
client having a relationship with Employer prior to or during the Covenant Term.
(c) 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 any person who is, at
the time of such solicitation, or who was within thirty (30) days of such
solicitation, an employee of Employer.
(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 4 is not reasonably necessary to protect the
legitimate business interests of Employer, 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 4, to act "directly or
indirectly" means to act personally or through an associate, affiliate, family
member or otherwise, as proprietor,
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partner, shareholder, director, officer, employee, agent, consultant or in any
other capacity or manner whatsoever.
(f) Specific Performance. Employer and the Executive agree that in the
event of a breach of the provisions of this Section 4 the injury which would be
suffered by Employer 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 4, 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 4.
5. 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:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & Stone
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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In the case of Employer, with a copy to:
Jamieson, Moore, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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.
6. 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. Employer may not assign this Agreement without the
written consent of Executive. No merger, consolidation, combination or like
transaction involving Employer shall be deemed an assignment hereunder, whether
or not Employer is the surviving entity. This Agreement shall inure to the
benefit of the Executive's heirs, executors, administrators and other legal
representatives.
7. 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.
8. 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.
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9. 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.
10. Counterparts. 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.
11. Amendment. This Employment Agreement may be modified or amended only by
an amendment in writing signed by both parties.
12. 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.
13. 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.
14. 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.
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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.
ATTEST: THE BANK OF THE SOMERSET HILLS
By:
--------------------------- --------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
WITNESS: EXECUTIVE:
--------------------------- -----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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AMENDMENT #1
TO
EMPLOYMENT AGREEMENT
This AMENDMENT #1 TO EMPLOYMENT AGREEMENT (this "Amendment") made as of
this 1st day of August, 2002, by and between SOMERSET HILLS BANK, f/k/a The Bank
of the Somerset Hills, a New Jersey state chartered commercial bank ("Employer"
or the "Bank") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual, residing at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Employment Agreement dated as of March
13, 2002 ("Employment Agreement") executed by and between the Bank and the
Executive, the Executive has been employed as the President and Chief Executive
Officer of ▇▇▇▇▇▇▇▇ Financial Services, Inc. (the "Company"), a wholly-owned
subsidiary of the Bank; and
WHEREAS, the Bank and the Executive desire to modify the terms of the
Employment Agreement for the purposes set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. (paragraph)1 Employment and Term shall be modified as follows:
(a) The Term is hereby extended to August 1, 2004 and shall continue
unless and until either party gives the other at least twelve (12) month's
prior written notice of termination ("Notice of Termination"), which Notice
of Termination may be given at any time after August 1, 2003. If a proper
Notice of Termination is sent, then effective on the date of termination
provided in the Notice of Termination ("Termination Date"), the Employment
Agreement shall terminate without any liability of the parties hereto to
the other except for the performance of their respective obligations under
the Employment Agreement and other obligations owed and arising out of the
employment relationship that may be imposed and/or required by applicable
law. All such notices shall be sent as provided in the Employment Agreement
as amended by this Amendment.
(b) Paragraph 1(b) shall be modified as follows:
"Employer shall have the right to terminate the Executive's
employment hereunder prior to August 1, 2004, or the Termination Date,
as applicable; provided, however, that unless such termination is for
"cause", as defined below, Executive shall be entitled to receive (i)
his Base Salary (as defined herein) and all insurance benefits
provided on the date of such termination through August 1, 2004, or
the Termination Date, as applicable, and (ii) his Bonus (as defined
herein) up through his last working day of employment, which day shall
be determined by the Employer."
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2. (paragraph)2 Duties shall be modified as follows:
The Board has designated the CEO of the Bank as its representative for
administrative and operational purposes and any direction from the CEO
should be considered by Executive to be direction from the Board of
Directors. Executive shall report directly to the CEO of the Bank unless
notified otherwise in writing.
3. (paragraph)3 Compensation shall be modified as follows:
(a) Subparagraph (a)(ii) regarding the calculation of the Bonus shall
be deleted in its entirety and the following shall be inserted in lieu
thereof:
(ii) A bonus (the "Bonus") to be paid annually equal to one-third
of the amount by which the sum of (A) the "Net Income" of the Company
as a subsidiary of the Bank for each year of operation (or relevant
portion thereof) and (B) any management fee accrued for such year,
exceeds $180,000 on an annual basis, or such appropriate pro-rata
amount (the "Target").
For purposes of this calculation, "Net Income" shall mean the
actual net income before taxes as shown on a bonus calculation
statement prepared and approved by the Bank (a form of bonus
calculation statement is attached hereto as Schedule A) plus any bonus
accrual shown on said statement (which accrual shall include payroll
related taxes, as applicable) minus any and all federal and state
taxes calculated at the then highest applicable rates (e.g., currently
34% and 9%, respectively) as if said taxes were paid in full and
regardless of whether paid at all.
(b) Delete the last sentence in paragraph (a) and insert the following
in lieu thereof:
"The amount of the Bonus, if any, will be determined as stated
above and will be paid within thirty (30) days of the release of the
Bank's annual audited financial statements."
4. (paragraph)4 Additional Covenants:
(a) Add the following to the end of Paragraph 4(b):
"Notwithstanding anything contained herein to the contrary, the
foregoing noncompete provision shall also apply for a period of six
(6) month's following the last payment made by the Bank to Executive
following the termination of Executive's employment as provided under
Paragraph 1(b) of this Employment Agreement."
(b) Delete (paragraph)4(c) in its entirety and inset in lieu thereof
the following:
"(c) Non-Solicitation. Executive agrees that for a period of six
(6) months following August 1, 2004, or the Termination Date, as
appropriate, he will not directly or indirectly recruit or solicit for
employment or induce to terminate his or her employment or
relationship with Employer or the Company any person who is, at the
time of such solicitation, or who was within thirty (30) days of such
solicitation, an employee or independent contractor of Employer or the
Company."
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5. (paragraph)5 Notices shall be revised to reflect the following new
addresses for the parties:
If to Employer: Somerset Hills Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Attention: CEO
with a copy to: ▇▇▇▇▇▇▇, Deutsch & ▇▇▇▇▇▇▇▇, LLP
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Executive: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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6. Modification. All other terms and conditions of the Employment Agreement
shall remain in full force and effect, except as modified herein. All terms not
defined herein shall have the meanings and be construed as set forth in the
Employment Agreement.
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered, all as of the day and year first above written.
SOMERSET HILLS BANK
By:
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Chief Executive Officer
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