Exhibit 10.1

WAIVER AGREEMENT

WAIVER AGREEMENT (this "Waiver"), made as of March 25, 2009, by and between
Somerset Hills Bancorp, a New Jersey corporation with an address at 155
Morristown Road Bernardsville, New Jersey 07924 (the “Company”), and Stewart E.
McClure, Jr., an individual residing at 90 Spring Hill Road, Mendham, New Jersey
07945 (the "Executive").

WITNESSETH :

WHEREAS, the Company and the Executive have entered into that certain Employment
Agreement, made as of March 8, 2001 and amended thereafter (and as may hereafter
be further amended, modified, supplemented, extended, renewed, restated or
replaced, the "Employment Agreement"), which governs the terms and conditions of
the Executive’s employment with the Company;

WHEREAS, as part of the Emergency Economic Stabilization Act of 2008 (“EESA”),
the United States Treasury (the “Treasury”) adopted a program known as the
Capital Purchase Program (“CPP”) pursuant to which the Treasury has invested in
United States insured depository institutions;

WHEREAS, the Company received an investment of $7,414,000 from the Treasury
pursuant to the CPP on January 16, 2009.

WHEREAS, the terms of the CPP were revised by the American Recovery and
Reinvestment Act of 2009 (the “ARRA”), which, among other things, imposed
certain limitations upon the compensation of executive officers of companies
which participated in the CPP;
 

WHEREAS, the Employment Agreement does not comply with the requirements of ARRA,
in that it provides for certain severance payments and a cash bonus to the
Executive; and

WHEREAS, the Executive is willing to waive such portions of the Employment
Agreement which do not comply with the ARRA subject to the terms and conditions
contained herein

NOW THEREFORE, in consideration of the foregoing, and the respective agreements
and covenants contained herein, the parties hereto agree as follows:

1.           Waiver

Subject to the terms and conditions hereof, the Executive hereby agrees to waive
all provisions of the Employment Agreement which would render the Company in
violation of the Section 111 of the EESA, as amended by the ARRA, and the
regulations that may be promulgated thereunder from time to time, including, but
not limited to:

a.           Article 3.1 of the Employment Agreement with respect to the right
of the Executive to receive an annual cash bonus in an amount to be determined
at the discretion of the Company’s Board of Directors, not less than twenty five
thousand ($25,000) dollars;
 

b.           Article 4.4(a) of the Employment Agreement with respect to the
Executive’s estate’s right to receive payments upon Executive’s death;
 

 
c.           Any right to post-employment compensation under Article 7 of the
Employment Agreement, regardless of whether such right arises as a result of a
termination by the Employer, a termination for Good reason by the Employee or a
termination subsequent to a Change in Control by either Employer or Employee;
 

 
 

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provided,  however,  that the  foregoing  waiver will be of no further  force or
effect,  and the Executive will be entitled  to  exercise  all of  his rights
and  remedies  under  the  Employment Agreement, and applicable  law,
automatically upon such time as the Company is no longer prohibited from making
the payments described above under the EESA and regulations thereunder, whether
because the Company’s obligation to the Treasury arising from the Company’s
participation in the CPP shall be satisfied or excused, the EESA shall be
further amended to eliminate the prohibition on severance or otherwise.
 
2.           Further Limitations of Waiver

This Waiver by the Executive of the benefits conferred to him pursuant to the
Employment Agreement shall be construed only to the minimum extent necessary so
that the Company shall be in compliance with the Section 111 of the EESA, the
ARRA and the regulations as may be promulgated from time to time thereunder
(collectively, the “Acts”), and shall not be construed to grant to the Company
additional benefits beyond what is minimally required to comply with the Acts.

3           Entire Agreement; Binding Affect; Employment Agreement to Remain in
Effect.  This Waiver constitutes the entire and final agreement among the
parties with respect to the subject matter hereof and there are no agreements,
understandings, warranties or representations among the parties as to such
subject matter except as set forth herein.  This Waiver will inure to the
benefit and bind the parties hereto and the respective heirs, administrators,
executors, representatives, successors and permitted assigns of the parties
hereto. Except as specifically provided for hereunder, the Employment Agreement
shall remain in full force and effect, shall not be modified or otherwise
revised by this Waiver Agreement.

4.           Defined Terms.  Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Employment Agreement.

5.           Governing Law.  This Waiver is executed and delivered in the State
of New Jersey and it is the desire and intention of the parties that it be in
all respects interpreted according to the laws of the State of New Jersey,
without giving effect to choice of law provisions thereof.

6.           Counterparts.  This Waiver may be executed in counterparts, each of
which will be deemed an original document, but all of which will constitute a
single document.

IN WITNESS WHEREOF, the Company, the Bank and the Executive legally bound, have
executed this Waiver Agreement as of the date first noted above.

 
Somerset Hills Bancorp
             
By:
/s/  Edward B. Deutsch
   
Name:  Edward Deutsch
   
Title:  Chairman of the Board
             
Somerset Hills Bank
             
By:
/s/  Edward B. Deutsch
   
Name:  Edward Deutsch
   
Title:  Chairman of the Board
             
/s/ Stewart E. McClure, Jr.
 
Stewart E. McClure, Jr.