AMENDED AND RESTATED AGREEMENT
THIS AMENDED AND
RESTATED AGREEMENT ("Agreement") by and among
CORNERSTONE BANK, a New Jersey chartered commercial bank (the
"Bank"),
CORNERSTONE FINANCIAL CORPORATION, a New Jersey business
corporation (the
"Company, and collectively with the Bank, the "Employer") and
GEORGE W. MATTEO,
JR., an individual (the "Executive").
W I T N E S S E T H :
WHEREAS, Employer
employs Executive as its President and Chief
Executive Officer; and
WHEREAS, Employer
and the Executive desire to enter in an agreement
regarding, among other things, the employment of and services to be
rendered by
the Executive.
AGREEMENT:
NOW, THEREFORE,
the parties hereto, intending to be legally bound
hereby, agree as follows:
1. EMPLOYMENT. The Executive is hereby employed
on the terms and conditions
set forth in this Agreement.
2. DUTIES OF EXECUTIVE. The Executive shall
perform and discharge well and
faithfully such duties as an executive officer of Employer as may
be assigned to
the Executive from time to time by the Boards of Directors of
Employer. The
Executive shall be employed as Chairman and Chief Executive Officer
of Employer,
and shall be a member of such other management committees as the
Executive may
choose, and shall hold such other titles as may be given to him
from time to
time by the Boards of Directors of Employer. The Executive shall
devote his full
time, attention and energies to the business of Employer and shall
not, during
the Employment Period (as defined in Section 3 hereof), be employed
or involved
in any other business activity, whether or not such activity is
pursued for
gain, profit or other pecuniary advantage; provided, however, that
this Section
2 shall not be construed as preventing the Executive from (a)
investing the
Executive's personal assets, (b) acting as a member of the Board of
Directors of
any other corporation or as a member of the Board of Trustees of
any other
organization, or (c) being involved in any other substantial
activity with the
prior written approval of the Boards of Directors of the
Employer.
3. TERM OF EMPLOYMENT. The Executive's employment
under this Agreement shall
be for a period (the "Employment Period") commencing on the date of
this
Agreement and, except as provided for under Section 6 hereof,
ending on March
31, 2010, provided that on the first and each subsequent annual
anniversary date
of the termination or ending date of this Agreement, and unless a
party has
given the other party written notice at least sixty (60) days prior
to such
anniversary date that such party does not agree to renew this
Agreement, the
term of this Agreement and the Employment Period shall be deemed
renewed for a
term ending one (1) year subsequent to such anniversary date,
unless sooner
terminated in accordance with this Section 5 hereof or one of the
following
provisions:
<PAGE>
(a) The Executive's
employment under this Agreement may be terminated at
any time during the Employment Period for "Cause" (as herein
defined), by action
of the Boards of Directors of Employer, upon giving notice of such
termination
to the Executive at least fifteen (15) days prior to the date upon
which such
termination shall take effect. As used in this Agreement, "Cause"
means any of
the following events:
(i) Violation of any law, rule or regulation (other than
traffic violations or similar minor
offenses) that reflects adversely on
the reputation of the Company, any felony
conviction, any violation of law
involving fraud, dishonesty or moral
turpitude, or which would otherwise,
in the reasonable discretion of Employer's
Boards of Directors, reflect
negatively on the reputation of Employer,
or any violation of any written
agreement or order with or issued by any
regulatory authority having
jurisdiction over Employer;
(ii) The Executive willfully fails to follow the lawful
instructions of the Boards of Directors of
Employer after the Executive's
receipt of written notice of such
instructions, other than a failure
resulting from the Executive's incapacity
because of physical or mental
illness; or
(iii) Executive's ineligibility to serve as an officer of
director of a bank or a publicly-held
corporation under any Federal or
state law or regulation or order of the
Securities and Exchange Commission
or any bank regulatory agency having
jurisdiction over the Bank or the
Executive.
If the Executive's employment is terminated under the provisions of
this Section
3(a), then all rights of the Executive under Section 4 hereof shall
cease as of
the effective date of such termination.
(b) The Executive's
employment under this Agreement may be terminated at
any time during the Employment Period without "Cause" (as defined
in Section
3(a) hereof), by action of the Boards of Directors of Employer,
upon giving
notice of such termination to the Executive at least thirty (30)
days prior to
the date upon which such termination shall take effect. If the
Executive's
employment is terminated under the provisions of this Section 3(b),
then the
Executive shall be entitled to receive the compensation and
benefits set forth
in Section 6 or Section 7 hereof, whichever shall be applicable. To
the extent
the Executive becomes entitled to and receives the payment and
benefits set
forth in Section 6 or 7, such payments and benefits shall
constitute liquidated
damages for any possible breach of this Agreement by the Employer
and shall
represent the maximum extent of liability therefore that the
Executive can claim
against the Employer or any of its affiliates or Directors.
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<PAGE>
(c) If the Executive dies, the
Executive's employment under this Agreemen
shall be deemed terminated as of the date of the Executive's death,
and all
rights of the Executive under Section 4 hereof shall cease as of
the date of
such termination and any benefits payable to the Executive shall be
determined
in accordance with the retirement and insurance programs of
Employer then in
effect.
(d) If the Executive is
incapacitated by accident, sickness, or
otherwise so as to render the Executive mentally or physically
incapable of
performing the services required of the Executive under Section 2
of this
Agreement for a continuous period of five (5) months, then, upon
the expiration
of such period or at any time thereafter, by action of the Boards
of Directors
of Employer, the Executive's employment under this Agreement may be
terminated
immediately upon giving the Executive notice to that effect. If the
Executive's
employment is terminated under the provisions of this Section 3(d),
then all
rights of the Executive under Section 4 hereof shall cease as of
the last
business day of the week in which such termination occurs and any
benefits
payable to the Executive shall be determined in accordance with the
retirement
and insurance programs of Employer then in effect.
(e) The Executive may
resign for "Good Reason" (as herein defined). As
used in this Agreement, "Good Reason" means any of the
following:
(i)
Any reduction in title, change in reporting structure
or significant reduction in the
Executive's responsibilities, authority or
status, including such responsibilities
and authority as the same may be
increased at any time during the term of
this Agreement, or the assignment
to the Executive of duties inconsistent
with the Executive's status as
Chairman and Chief Executive Officer of
Employer;
(ii) Any reassignment of the Executive which necessitates
or requires the Executive to move his
principal residence;
(iii) Any removal of the Executive from office or any
material adverse change in the terms and
conditions of the Executive's
employment, except for either a
termination of the Executive's employment
under the provisions of Section 3(a)
hereof;
(iv) Any reduction in the Executive's annual base salary
as
in effect on the date hereof or as the
same may be increased from time to
time;
(v) Following a Change in Control, any failure of
Employer
to provide the Executive with benefits at
least as favorable as those
enjoyed by the Executive under any of the
retirement, life insurance,
medical, health and accident, disability
or other employee plans of
Employer in which the Executive
participated at the time of the Change in
Control, or the taking of any action that
would materially reduce any of
such benefits in effect at the time of the
Change in Control;
(vi) Any failure of Employer to provide the Executive
with
benefits at least as favorable as those
received by any comparable
executive employees of Employer under any
of the retirement, life
insurance, medical, health and accident,
disability or other employee
benefit plans or policies of Employer,
unless such reduction is part of a
reduction applicable to all comparable
executive employees;
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<PAGE>
(vii) Any material failure to obtain a satisfactory
agreement from any successor to assume and
agree to perform this Agreement,
as contemplated in Section 14 hereof;
(viii) Any breach of a material provision of this Agreement
on the part of the Bank.
Provided that the Executive has given Employer written notice of
any event
constituting Good Reason and such event remains uncured for thirty
(30) days
after such notice, Executive may, at the option of the Executive,
resign from
employment with Employer under this Agreement by delivering notice
in writing
(the "Notice of Termination") delivered to Employer (or its
successor), and the
provisions of either Section 6 or Section 7 hereof shall thereupon
apply.
Section 6 shall apply where "Good Reason" resulted from or
occurred
contemporaneous with a Change in Control as defined by Section 5
hereof. Section
7 shall apply in all other instances where "Good Reason" exists.
Should
Executive resign for any reason other than those specified in
Sections (e)(i)
thru (viii), it shall be considered a voluntary resignation and all
rights of
Executive under Section 4 shall cease as of the date of such
voluntary
resignation.
4. EMPLOYMENT PERIOD
COMPENSATION.
(a) SALARY. For services performed
by the Executive under this Agreement,
Employer shall pay (or cause to be paid to) the Executive a salary,
during the
Employment Period, at no less than the following rate:
From the effective date hereof to March 1, 20010 -
$_____________, with adjustments thereafter as determined by the
Board of
Directors of the Company.
(b) BONUS. Executive
shall be eligible to participate in any bonus plan
implemented by Employer (commencing at such time as the Boards of
Directors of
Employer - in its sole and absolute discretion - decides to
implement such a
plan) for executive employees, on terms no less favorable than that
applicable
to any comparable executive employees of Employer. Notwithstanding
the
foregoing, in lieu of Executive's participation in any bonus plan
established
for any other comparable executive employees, Employer may
establish a bonus
plan specific to Executive, which shall be at least as favorable to
Executive as
any plan applicable to any or all comparable executive
employees.
(c) OTHER BENEFITS.
Employer will provide the Executive, during the
Employment Period, with insurance, vacation, retirement, and other
fringe
benefits, which benefits are, in the aggregate, not less favorable
than those
received by any comparable executive employees of Employer.
(d) STOCK-BASED
COMPENSATION. Upon adoption by the shareholders of the
Company of an equity compensation plan, the Executive shall be
granted an option
award to purchase 45,000 shares of Company common stock. Such
options shall vest
ratably over a three year period commencing on the first
anniversary of the date
of grant; provided, however that the grant agreement evidencing
such options
shall provide that vesting shall accelerate, and the options shall
become
immediately excisable, and remain exercisable for the period
provided for under
the terms of such equity compensation plan, upon the termination of
Executive's
employment hereunder due to Executive's death, his disability (as
described
under Section 3(d) hereof), termination by Employer without Cause,
termination
by Executive for Good Reason or in the event of a Change in Control
(as defined
below).
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<PAGE>
(e) OTHER MATTERS.
(i) The Executive shall be entitled to the use of
an
automobile and/or automobile allowances
consistent with his title and
responsibilities, as determined in the
reasonable discretion of the Boards
of Directors of Employer.
(ii) The Executive shall be paid or reimbursed for
country
club dues and business-related expenses in
accordance with policies and
procedures adopted by the Boards of
Directors of Employer.
5. CHANGE IN CONTROL.
(a) As used in this
Agreement, "Change in Control" means a change of
control of a nature that would be required to be reported in
response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as enacted and in
force on the
date hereof, whether or not the Bank is then subject to such
reporting
requirement; provided,
h
