Exhibit 10.1
EMPLOYMENT AGREEMENT
FOR
MICHAEL D. DEVLIN
This
Employment Agreement (the “Agreement”) is effective as
of the 1 st
day of June, 2009 (the
“Effective Date”), by and between Cape Bank, a New
Jersey chartered stock bank (the “Bank”), with its
principal offices at Cape May Court House, New Jersey, and Michael
D. Devlin (“Executive”). Any reference herein to the
“Company” shall mean Cape Bancorp, Inc., the holding
company of the Bank.
WHEREAS , Executive is currently employed as the
President and Chief Executive Officer of the Bank and the Bank
wishes to assure itself of the continued services of Executive for
the period provided in this Agreement; and
WHEREAS , Executive is currently a party to a two-year
employment agreement with the Bank, effective as of January 30,
2008 (the “2008 Agreement”), which designates Executive
as the Chief Operating Officer of the Bank and which terminates on
January 30, 2010; and
WHEREAS , Executive has been appointed the President and
Chief Executive officer of the Bank as a result of the termination
of employment of the prior President and Chief Executive Officer,
and the Bank desires that Executive serve as President and Chief
Executive Officer for a period of at least two years;
and
WHEREAS , in order to induce Executive to remain in the
employ of the Bank and accept the position of President and Chief
Executive Officer for a two-year term, and to provide further
incentives for Executive to achieve the financial and performance
objectives of the Bank, the parties desire to enter into this
Agreement; and
WHEREAS , in consideration of Executive’s agreeing
to continue in the employ of the Bank for the period set forth in
this Agreement, including extensions thereof, the Bank desires to
pay Executive a retention and signing bonus as set forth herein;
and
WHEREAS , this Agreement shall supersede the 2008
Agreement in all respects.
NOW, THEREFORE , in consideration of the mutual covenants
herein contained, and upon the other terms and conditions
hereinafter provided, the parties hereby agree as
follows:
|
1.
|
|
POSITION AND
RESPONSIBILITIES
|
During
the term of this Agreement, Executive agrees to serve as President
and Chief Executive Officer of the Bank (the “Executive
Position”), and will perform all duties and will have all
powers generally associated with such position and as may be set
forth in the Bylaws of the Bank. Without limiting the generality of
the foregoing, Executive shall be responsible for the overall
management of the Bank and shall be responsible for establishing
the business objectives, policies and strategic plans of the Bank,
in conjunction with the Boards of Directors of the Bank
(“Board”) and the Board of Directors of the Company.
Executive shall also be responsible for providing leadership and
direction to all divisions of the Bank and will be the primary
contact between the Board and other officers and employees of the
Bank. During the term of the Agreement, Executive also agrees to
serve, if elected, as an officer and/or director of any subsidiary
or affiliate of the Bank and in such capacity carry out such duties
and responsibilities reasonably appropriate to that
office.
1
(a) Term and Renewal
. The period of Executive’s
employment under this Agreement shall be deemed to have commenced
as of the Effective Date and shall continue for a period of
twenty-four (24) full calendar months (“Initial
Term”), or until the employment relationship is terminated
pursuant to Sections 6 or 7 hereof. Upon the expiration of the
Initial Term, this Agreement may be renewed for an additional
twelve (12) months (the “Renewal Term”) if the
Bank and Executive agree to such renewal, and if the Bank or
Executive gives written notice to the other party at least thirty
(30) days prior to the anniversary date of the Effective Date
of this Agreement expressing an intent or interest to renew the
term of this Agreement for an additional twelve (12) months.
Executive’s employment shall continue during any such Renewal
Term unless the employment relationship is terminated pursuant to
Sections 6 or 7 hereof. On an annual basis, the Board will
conduct a performance evaluation, the results of which will be
considered in determining whether to extend this Agreement at the
end of the Initial Term or, if applicable, the then-current Renewal
Term.
(b) Continued Employment Following
Expiration of Term .
Nothing in this Agreement shall mandate or prohibit a continuation
of Executive’s employment following the expiration of the
term of this Agreement.
|
3.
|
|
LOYALTY AND OUTSIDE
ACTIVITIES
|
During
the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive will devote all of his
business time, attention, skill and efforts to the faithful
performance of his duties under this Agreement, including
activities and duties directed by the Board. Notwithstanding the
preceding sentence, subject to the approval of the Board, Executive
may serve as a member of the board of directors of business,
community and charitable organizations, provided that in each case
such service shall not materially interfere with the performance of
his duties under this Agreement, adversely affect the reputation of
the Bank or any other affiliates of the Bank, or present any
conflict of interest. Executive will present annually to the Board
for its review and approval, a list of organizations in which
Executive is participating or proposes to participate. Such service
to and participation in outside organizations will be presumed for
these purposes to be for the benefit of the Bank, and the Bank will
reimburse Executive his reasonable expenses associated therewith,
to the extent Executive’s expenses are not reimbursed by such
organizations.
|
4.
|
|
COMPENSATION AND
REIMBURSEMENT
|
(a) Base Salary . In consideration of Executive’s
performance of the responsibilities and duties set forth in
Section 1, the Bank will provide Executive the compensation
specified in this Agreement. The Bank will pay Executive a salary
of not less than $240,000 per year (“Base Salary”).
Such Base Salary will be payable in accordance with the customary
payroll practices of the Bank. During the term of this Agreement,
Executive’s Base Salary shall be reviewed at least annually.
Such review may be conducted by the compensation committee (the
“Committee”) designated by the Board, and the Board may
increase, but not decrease Executive’s Base Salary (except
for a decrease that is not in excess of any decrease that is
generally applicable to all employees of the Bank). Any increase in
Base Salary will become the “Base Salary” for purposes
of this Agreement.
2
2
(b) Retention/Signing Bonuses
. In order to induce
Executive to enter into this Agreement and remain in the employ of
the Bank during the term hereof, the Bank has agreed to pay
Executive a signing bonus in the amount of $375,000, payable on the
Effective Date of this Agreement and a retention bonus of $300,000
payable on the first anniversary of the Effective Date, provided
Executive is in the employ of the Bank and the Company on such
date. In addition, Executive shall be entitled to receive a bonus
of $75,000 on July 30, 2009, which was due Executive under the
2008 Agreement and which shall be unaffected by this
Agreement.
(c) Bonus and Incentive
Compensation . In
addition to the signing and retention bonuses set forth in Section
4(b) hereof, Executive will be entitled to participate in any
incentive compensation and bonus plans or arrangements of the Bank.
Such incentive compensation will be paid in cash or stock in
accordance with the terms of such plans or arrangements, or on a
discretionary basis by the Committee. Nothing paid to Executive
under any such plans or arrangements will be deemed to be in lieu
of other compensation to which Executive is entitled under this
Agreement.
(d) Benefit Plans
. Executive will be entitled to
participate in all employee benefit plans, arrangements and
perquisites substantially equivalent to those in which Executive
was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement. The Bank will
not, without Executive’s prior written consent, make any
changes in such plans, arrangements or perquisites which would
adversely affect Executive’s rights or benefits thereunder,
unless such adverse effect resulting from such changes applies
generally in a proportionate manner to all participants under the
affected plan, arrangement or perquisite or such adverse effect is
otherwise required by law. Without limiting the generality of the
foregoing provisions of this Section 4(d), Executive also will
be entitled to participate in any employee benefit plans, including
but not limited to, stock benefit plans, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
or any other employee benefit plan or arrangement made available by
the Bank in the future to its senior executives and key management
employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and
arrangements.
(e) Health, Dental, Life and Disability
Coverage . The Bank
shall provide Executive with life, medical, dental and disability
coverage made available by the Bank to its senior executives and
key management employees, subject to and on a basis consistent with
the terms, conditions and overall administration of such coverage.
In addition, during the Initial Term of the Agreement, the Bank
will provide Executive with term life insurance coverage with a
death benefit of at least $400,000.
(f) Paid Time Off
. Executive will be entitled to four
weeks paid vacation each year during the term of this Agreement
(measured on a fiscal or calendar year basis, in accordance with
the Bank’s customary practices), as well as sick leave,
holidays and other paid absences in accordance with the
Bank’s policies and procedures for senior executives. Any
unused paid time off during an annual period will be treated in
accordance with the Bank’s personnel policies as in effect
from time to time.
3
3
(g) Expense Reimbursements
. During the term of this
Agreement, the Bank will pay or reimburse Executive for all
reasonable travel, entertainment and other reasonable expenses
incurred by Executive during the course of performing his
obligations under this Agreement, including, without limitation,
fees for memberships in such organizations and clubs as Executive
and the Board mutually agree are necessary and appropriate in
connection with the performance of his duties under this Agreement,
upon substantiation of such expenses in accordance with applicable
policies and procedures of the Bank. All reimbursements under this
Section 4(g) shall be paid as soon as practicable by the Bank;
provided, however, that no payment shall be made later than
March 15 of the year immediately following the year in which
the expense was incurred.
Executive’s principal place of employment
will be at the Bank’s principal executive offices. The Bank
will provide Executive at his principal place of employment with a
private office, secretarial and other support services and
facilities suitable to his position with the Bank and necessary or
appropriate in connection with the performance of his duties under
this Agreement.
|
6.
|
|
TERMINATION AND TERMINATION
PAY
|
Subject to Section 7 of this Agreement
which governs the occurrence of a Change in Control,
Executive’s employment under this Agreement may be terminated
in the following circumstances:
(a) Death . Executive’s employment under this
Agreement will terminate upon his death during the term of this
Agreement, in which event Executive’s estate or beneficiary
will receive the compensation due to Executive through the last day
of the calendar month in which his death occurred, and the Bank
will continue to provide the same medical and dental benefits for
Executive’s family for one (1) year after
Executive’s death as was provided immediately prior to
Executive’s death. If Executive’s death occurs during
the Initial Term, Executive will be entitled to an additional
$400,000 under the term life insurance policy acquired by the Bank
for Executive. In the event of Executive’s death prior to
July 30, 2009, the Bank shall pay Executive’s family
$75,000, which represents the bonus due Executive on said date
under the 2008 Agreement.
(b) Retirement . This Agreement will terminate upon
Executive’s “Retirement” under the retirement
benefit plan or plans of the Bank in which he participates.
Executive will not be entitled to the termination benefits
specified in Section 6 or 7 hereof in the event of termination
due to Retirement. For purposes of this Agreement, termination of
Executive’s employment based on Retirement shall include
termination of Executive’s employment by the Board for any
reason after Executive attains the age of sixty-five (65) or
in accordance with any retirement arrangement established by the
Board with Executive’s consent.
4
4
(c) Disability . Termination of Executive’s employment
based on “Disability” may occur if the Executive
is:
|
|
(i)
|
|
Unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than
12 months,
|
|
|
(ii)
|
|
By reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank,
or
|
|
|
(iii)
|
|
Determined to be totally disabled
by the Social Security Administration.
|
|
|
(iv)
|
|
A determination as to whether
Executive has suffered a Disability shall be made by the Board with
objective medical input. In the event of termination due to
Disability, Executive will be entitled to disability benefits, if
any, provided under a long term disability plan sponsored by the
Bank, if any.
|
|
|
(v)
|
|
In the event the Board determines
that Executive is Disabled, Executive will no longer be obligated
to perform services under this Agreement. In addition, Executive
shall be entitled to receive any of the retention bonuses which
have not yet been paid to Executive under Section 4(b) above,
payable at the time set forth in said Section 4(b). Upon
Executive’s termination due to Disability, Executive shall be
entitled to the compensation due Executive through the end of the
month in which the date of termination occurs, and the Bank will
cause to be continued life insurance and non-taxable medical and
dental coverage substantially comparable, as reasonable or
customarily available, to the coverage maintained by the Bank for
Executive prior to his termination for Disability. This coverage
shall cease upon the earlier of (i) two (2) years from
the date of termination, or (ii) the date Executive becomes
eligible for Medicare coverage; provided further that if Executive
is covered by family coverage or coverage for self and a spouse,
then Executive’s family or spouse shall continue to be
covered for the remainder of the two (2) year period, or in
the case of the spouse, until the spouse becomes eligible for
Medicare coverage or obtains health care coverage elsewhere,
whichever period is less.
|
5
5
(d) Termination for
Cause.
|
|
(i)
|
|
The Board may by written notice to
Executive in the form and manner specified in this paragraph,
immediately terminate his employment at any time for
“Cause.” Executive shall have no right to receive
compensation or other benefits for any period after termination for
Cause, except for any benefits that are already vested as of the
date of termination and that are not otherwise subject to
forfeiture under the terms of the applicable plan or program.
Termination for Cause shall mean termination because of, in the
good faith determination of the Board,
Executive’s:
|
|
|
(1)
|
|
material act of dishonesty in
performing Executive’s duties on behalf of the
Bank;
|
|
|
(2)
|
|
willful misconduct that in the
judgment of the Board will likely cause economic damage to the Bank
or injury to the business reputation of the Bank;
|
|
|
(3)
|
|
breach of fiduciary duty involving
personal profit;
|
|
|
(4)
|
|
material breach of the Bank’s
Code of Ethics;
|
|
|
(5)
|
|
material violation of the
Sarbanes-Oxley requirements for officers of public companies that
in the reasonable opinion of the Board will likely cause
substantial financial harm or substantial injury to the reputation
of the Bank;
|
|
|
(6)
|
|
intentional failure to perform
stated duties under this Agreement after written notice thereof
from the Bo
|
|
