Exhibit 10.17

 

EMPLOYMENT AGREEMENT

Employment Agreement (the "Employment Agreement") made as of this   13th   day
of September, 2010, by and between VITO GIANNOLA, an individual residing at
14-67 155th Street, Whitestone, New York 11357, (the "Employee"), and SUSSEX
BANK, a New Jersey state chartered commercial bank with its principal place of
business located at 200 Munsonhurst Road, Route 517, Franklin, New Jersey 07416
(the "Employer").

 

WHEREAS, the Board of Directors of the Bank has determined that it is in the
best interest of the Bank to enter into this Agreement with Employee, and has
authorized the Employer to enter into this Agreement;

 

WHEREAS, the Employee agrees to be employed pursuant to the terms and conditions
of this Agreement;

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein,
and with the intent to be legally bound hereby, the parties hereto hereby agree
as follows:

 

l.   Employment. The Employer hereby agrees to employ the Employee, and the
Employee hereby accepts such employment, upon the terms and conditions set forth
herein.

 

2.   Position and Duties. The Employee shall be employed as Chief Retail Officer
and Executive Vice President of the Bank, to perform such services in that
capacity as are usual and customary for comparable institutions and as shall
from time-to-time be established by the Chief Executive Officer and/or the Board
of Directors of the Bank. Employee agrees that he will devote his full business
time and efforts to his duties hereunder.

 

3.   Compensation. Employer shall pay to the Employee compensation for his
services as follows:

 

(a)   Base Salary. The Employee shall be entitled to receive, commencing on
September 13, 2010, an annual base salary (the "Base Salary") of One Hundred
Fifty Three Thousand dollars ($153,000), which shall be payable in installments
in accordance with Employer's usual payroll method. Annually thereafter, on
September 13th, the Board of Directors shall review the Employee's performance,
the status of Employer and such other factors as the Board of Directors or a
committee thereof shall deem appropriate and shall adjust the Base Salary
accordingly.

 

(b)   Incentive Plans. Employee shall be entitled to participate in the

 

 

Employer’s incentive plan for executive officers of the Employer.

 

(c)   Equity Grant. On September 13, 2010, the Employer shall grant Employee an
award of such number of shares of the Company’s common stock, no par value per
share, which shall have a fair market value, as hereinafter defined, of forty
thousand ($40,000) dollars (the “Restricted Stock”). The Restricted Stock shall
be subject to forfeiture in the event Employee's employment with the Employer is
terminated during the “Restricted Period” (as defined below), and the Restricted
Stock may not be transferred during the Restricted Period. During the Restricted
Period, the Restricted Stock may either be issued in book entry form only, or if
issued in certificated form, the Employer may retain custody of the
certificates, at Employer's option. If the Restricted Stock is issued in
certificated form, Employee shall execute such stock powers regarding such
certificates as the Company shall reasonable request. During the Restricted
Period, Employee shall be entitled to receive and retain any cash dividends paid
on the Restricted Stock, and Employee shall have the right to vote the
Restricted Shares at any shareholders meeting of the Company. For purposes of
this Agreement, the Restricted Period shall be a period of time commencing on
the date hereof and ending with regard to twenty percent (20%) of the Restricted
Stock on August 31, 2013, with the Restricted Period then ending with regard to
an additional twenty percent (20%) of the Restricted Stock on each August 31st
thereafter; provided, however, that in the event of a Change in Control of the
Company (as defined below), the Employee's death or his disability, the
Restricted Period shall end with regard to all of the Restricted Stock. For
purposes of this Agreement, “fair market value” shall be a multi-day average of
the closing price of the stock on five business days immediately preceding the
date of this Agreement. For purposes hereunder, Employee shall be deemed to be
disabled if he is unable to perfom his essential job functions due to a mental
or physical condition for a period of six (6) consecutive months or for shorter
periods aggregating six (6) months during any twelve (12) month period.

 

4.   Other Benefits.

 

(a)   Automobile. The Employee shall be entitled to a cash allowance in the
amount of five hundred ($500) dollars per month to be used for the purpose of
maintaining an automobile.

 

(b)   Insurance. The Employee shall be entitled to receive hospital, health,

 

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medical, and life insurance of a type currently provided to and enjoyed by other
senior officers of Employer, and shall be entitled to participate in any other
employee benefit, incentive or retirement plans offered by Employer to its
employees generally or to its senior management.

 

(c)   Expenses. The Employee shall be entitled to reimbursement for all proper
business expenses incurred by him with respect to the business of the Employer
upon the provision of documentation evidencing such expenses in accordance with
the Employer's expense reimbursement policies and in the same manner and to the
same extent as such expenses are reimbursed to other officers of the Employer.

 

5.   Term. The term of this Agreement shall commence on the date hereof (the
Employment Commencement Date") and continue until August 31, 2013 (the "Initial
Term"). On each anniversary of the Employment Commencement Date (each, an
"Anniversary Date"), the term of this Agreement shall automatically be renewed
for one year (an "Extension Term" and, with the Initial Term, the "Term") unless
either party hereto, by written notice provided at least 90 days prior to the
proposed end of a Term, elects not to renew such that, absent notice of
non-renewal, the Term shall be extended to three (3) years from the Employment
Commencement Date or the most recent Anniversary Date, as applicable.

 

6.   Termination. Employee may be terminated at any time, without prejudice to
Employee's right to compensation or benefits as provided herein. Employee's
rights upon a termination shall be as follows:

 

(a)   Cause. As used in this Agreement, the term "Cause" shall mean
the Employee's personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or a material breach of any
provision of this Agreement. Notwithstanding the above, the Employee shall not
be deemed to have been terminated for cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than three-fourths of the members of the Board of Directors of
the Bank at their meeting called and held for that purpose (after reasonable
notice to the Employee and an opportunity for him, together with counsel, to be
heard before such Board of Directors), finding that in the good faith opinion of
the Board of Directors, the Employee was guilty of conduct justifying
termination for cause and

 

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specifying the particulars thereof in detail; provided, however, that nothing
contained herein shall prohibit Employee from being suspended from his duties
hereunder by a duly authorized agent of the Board upon a good faith
determination that "cause" exists. Such suspension shall  last until such time
as the Board meeting provided for above shall have occurred, provided that such
Board meeting shall occur within a reasonable period of time. During such
suspension Employee shall continue to be an employee, entitled to all salary and
benefits provided for hereunder.

 

(b)   Termination With Cause. Employer shall have the right to terminate
the Employee for “cause”. In the event of such termination, the Employee shall
not be entitled  to any further benefits under this Agreement.

 

(c)   Termination Without Cause. Upon a termination of Employee's employment
hereunder without "cause", in recognition of such termination and Employee’s
agreement to be bound by the covenants contained in Section 9 hereof, Employee
shall be entitled to receive a lump sum severance payment equal to the amount
that would have been paid to Employee for the greater of (i) one year or (ii)
the remaining unexpired term of this Employment Agreement as determined under
Section 5, assuming no renewal or extension of the Term (the “Remaining
Unexpired Term”) at his then current Base Salary with no discounting for early
payment. In addition, Employer shall continue to provide the Employee with
hospital, health, medical and life insurance, and any other like benefits in
effect at the time of such termination for the greater of (i) the period of one
year or (ii) the Remaining Unexpired Term. The Employee shall have no duty to
mitigate damages in connection with his termination by Employer without “cause”.
However, if the Employee obtains new employment and such new employment provides
for hospital, health, medical and life insurance, and other benefits, in a
manner substantially similar to the benefits payable by Employer hereunder,
Employer may permanently terminate the duplicative benefits it is obligated to
provide hereunder.

 

(d)   Death or Disability. This Agreement shall automatically terminate upon the
death or disability of Employee. Upon such termination, Employee shall not be
entitled to any additional compensation hereunder, provided, however that the
forgoing shall not prejudice Employee's right to be paid for all compensation
earned through the date of such termination and the benefits of any insurance
programs maintained for the benefit of Employee or his

 

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beneficiaries in the event of his death or disability.

 

7.   Resignation for Cause. During the term of this Agreement, the Employee
shall be entitled to resign from his employment with Employer, and in
recognition of the termination of Employee’s employment in such circumstances
and Employee's agreement to be bound by the covenants contained in Section 9
hereof, Employee shall receive the payments provided for below, in the event
that the Employee is not in breach of this Agreement and Employer (i) reassigns
the Employee to a position of lesser rank or status than Chief Retail Officer,
(ii) relocates the Employee's principal place of employment by more than 50
miles from its location on the date hereof, or (iii) reduces the Employee's
compensation or other benefits below the level specified herein. Upon the
occurrence of any of these events, the Employee shall have  thirty days to
provide Employer notice of his intention to terminate this Agreement. In the
event the Employee elects to so terminate this Agreement, such termination shall
be treated as a termination without "cause" by Employer under Section 6(c)
hereof, and the Employee shall be entitled to receive all payments and other
benefits called for under such Section 6(c).

 

8.   Change in Control.

 

(a)   Upon the termination of Employee’s employment upon the occurrence of a
Change in Control (as herein defined), Employee shall be entitled to receive the
payments provided for under paragraph (c) hereof. In addition, if within
eighteen (18) months of the occurrence of a Change in Control Employer or its
successor shall (i) reassign the Employee to a position of lesser rank or status
than Chief Retail Officer, (ii) relocate the Employee's principal place of
employment by more than 50 miles from its location prior to consummation of the
Change in Control, or (iii) reduces the Employee's compensation or other
benefits below the level in effect prior to the consummation of Change in
Control, Employee have the right to resign his employment with the Employer or
its successor and thereafter Employee shall become entitled to receive the
payments provided for under paragraph (c) below.

 

(b)   A "Change in Control" shall mean:

 

(i)  a reorganization, merger, consolidation or sale of all or substantially all
of the assets of the Company, or a similar transaction, in any case in which the
holders of the voting stock of the Company prior to such transaction do not hold
a majority of the voting power of the resulting entity; or

 

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(ii)   Individuals who constitute the Incumbent Board (as  herein defined) of
the Company cease for any reason to constitute a majority thereof; or

 

(iii)   Without limitation, a change in control shall be deemed to have occurred
at such time as (i) any “person” (as the term is used in Section 13(d) and 14(d)
of the Exchange Act) other than the Company or the trustees or any
administration of any employee stock ownership plan and trust, or any other
employee benefit plans, established by Employer from time-to-time in is or
becomes a "beneficial owner" (as defined in Rule 13-d under the Exchange Act)
directly or indirectly, of securities of the Company representing 35% or more of
the Company's outstanding securities ordinarily having the right to vote at the
election of directors; or

 

(v)   A tender  offer is made for 35% or more of the voting securities of  the
Company and the shareholders owning beneficially or of record 35% or more of the
outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender and such tendered shares have been accepted by
the tender offeror.

 

For these purposes, "Incumbent Board" means the Board of Directors of the
Company on the date hereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a voting of at
least three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by members or stockholders was approved by the same
nominating committee serving under an Incumbent Board, shall be considered as
though he were a member of the Incumbent Board.

 

(c)   In the event the conditions of Section (a) above are satisfied,
Employee shall be entitled to receive a lump sum payment equal to two (2) times
Employee's then current Base Salary; provided, however, that in no event shall
any payments provided for hereunder constitute an "excess parachute payment"
under Section 280G of the Internal Revenue Code of 1986, as amended or any
successor thereto, and in order to avoid such a result the benefits provided for
hereunder will be reduced, if necessary, to an amount which is One Dollar
($1.00) less than an amount equal to three (3) times Employee's "base amount" as
determined in accordance with such Section 280G. In addition to the foregoing,
Employee shall be entitled to receive from Employer, or its successor, hospital,
health, medical and life insurance on the terms

 

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and at the cost to Employee as Employee was receiving such benefits upon the
date of his termination. Employer’s obligation to continue such insurance
benefits will be for a period of two (2) years.

 

9.    Covenant Not to Compete.

 

(a)   As consideration for the benefits conferred upon Employee hereunder,
including, but not limited to Employee's right to severance under Section 6(c),
Employee agrees that during the term of his employment hereunder and for a
period of one (1) year after the termination of his employment (the “Covenant
Term”) he will not in any way, directly or indirectly, manage, operate, control,
accept employment or a consulting position with or otherwise advise or assist or
be connected with or own or have any other interest in or right with respect to
(other than through ownership of not more than five percent (5%) of the
outstanding shares of a corporation whose stock is listed on a national
securities exchange or on NASDAQ) any enterprise which competes with Employer in
the business of banking in the counties in which Employer conducts its business
on the date of Employee’s termination; provided, however, that this Section 9
shall be of no force and effect following a Change in Control of the Employer.

 

(b)   The Employee agrees that, during Covenant Term, he shall make
himself available to the Employer for consultation from time to time to provide
transition assistance to Employer and/or its successor. Such consultation shall
not be on a full time basis and shall, to the fullest extent possible, be
undertaken on a remote basis so that Employee shall not generally be required to
render such consultations at the business location of the Employer.

 

(c)   In the event that this covenant not to compete shall be found by a court
of competent jurisdiction to be invalid or unenforceable as against public
policy, such court shall exercise discretion in reforming such covenant to the
end that Employee shall be subject to a covenant not to compete that is
reasonable under the circumstances and enforceable by Employer. Employee agrees
to be bound by any such modified covenant not to compete.

 

10.   Miscellaneous.

 

(a)   Governing Law.    In the absence of controlling Federal law, this
Agreement shall be governed by and interpreted under the substantive law of the
State of New

 

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Jersey.

 

(b)   Severability.  If any provision of this Agreement shall be held to
be invalid, void, or unenforceable, the remaining provisions hereof shall in no
way be affected or impaired, and such remaining provisions shall remain in full
force and effect.

 

(c)   Entire Agreement;  Amendment. This Agreement sets for the entire
understanding of the parties with regarding to the subject matter contained
herein and supersedes any and all prior agreements, arrangements or
understandings relating to the subject matter hereof and may only be amended by
written agreement signed by both parties hereto or their duly authorized
representatives.

 

(d)   Successors  and Assigns.  This Agreement shall be binding upon and become
the legal obligation of the successors and assigns of Employer.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

SUSSEX BANK

 

 

 

 

By:

/s/ Anthony Labozzetta

 

 

Name:  Anthony Labozzetta

 

 

Title:    President and CEO

 

 

 

 

EMPLOYEE:

 

 

 

 

 

/s/ Vito Giannola

 

 

Name:  Vito Giannola

 

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