ex10-5.htm


    EXHIBIT
10.5

    


     

    


     

    [CENTRAL
JERSEY BANCORP LETTERHEAD]

     

    December
19, 2008

     

    James S.
Vaccaro

    Central
Jersey Bancorp

    1903
Highway 35

    Oakhurst,
New Jersey 07755

    


    Dear Mr.
Vaccaro:

     

    As you know, Central Jersey Bancorp
(the “Company”) anticipates entering into a Securities Purchase Agreement (the
“Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides, among other things, for the Company’s participation
in the Treasury’s TARP Capital Purchase Program (“CPP”).  In the event
that the Company does not participate or ceases at any time to participate in
the CPP, this letter agreement shall be of no further force or
effect.

     

    In order for the Company to participate
in the CPP and as a condition to the closing of the investment contemplated by
the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to
make changes to its compensation arrangements.  To comply with these
requirements, and in consideration of the benefits that you will receive as a
result of the Company’s participation in the CPP, you hereby agree as
follows:

     

    
      	
               
      

            	
              1.

            	
              No Golden Parachute
      Payments.  No golden parachute payments will be made by
      the Company to you during any “CPP Covered Period.”  A “CPP
      Covered Period” is any period during which (A) you are a senior executive
      officer of the Company, and (B) the Treasury holds an equity or debt
      position acquired from the Company in the
CPP.

            


    

     

    
      	
               
      

            	
              2.

            	
              Recovery of Bonus and
      Incentive Compensation.  Any bonus and/or incentive
      compensation paid to you during a CPP Covered Period is subject to
      recovery or “clawback” by the Company if the payments were based on
      materially inaccurate financial statements or any other materially
      inaccurate performance metric
criteria.

            


    

     

    
      	
               
      

            	
              3.

            	
              Compensation Program
      Amendments.  Each of the Company’s compensation, bonus,
      incentive and other benefit plans, arrangements and agreements (including,
      but not limited to, golden parachute, severance and employment agreements)
      (collectively, “Benefit Plans”) with respect to you is hereby amended
      (notwithstanding any contrary language within such Benefit Plans) to the
      extent necessary to give effect to provisions (1) and (2)
      above.

            


    

     

    In
addition, the Company is required to review its Benefit Plans to ensure that
they do not encourage senior executive officers to take unnecessary and
excessive risks that threaten the value of the Company.  To the extent
that any such review requires revisions to any Benefit Plan with respect to you,
you and the Company agree to negotiate such changes promptly and in good
faith.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              4.

            	
              Definitions and
      Interpretation.  This letter agreement shall be
      interpreted as follows:

            


    

     

    “Senior
executive officer” means the Company’s “senior executive officers” as defined in
Section 111(b)(3) of EESA.

     

    “Golden
parachute payment” has the same meaning as in Section 111(b)(2)(C) of
EESA.

     

    “EESA”
means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation that has been issued by the Department of Treasury and is
in effect as of the “Closing Date,” as defined in the Participation
Agreement.

     

    The term
“Company” includes any entities treated as a single employer with the Company
under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date).  You are
also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter agreement.

     

    The term
“CPP Covered Period” shall be limited by, and interpreted in a manner consistent
with, 31 C.F.R. § 30.11 (as in effect on the Closing Date).

     

    Provisions
(1) and (2) of this letter agreement are intended to, and will be interpreted,
administered and construed to comply with Section 111 of EESA and, to the
maximum extent consistent with the preceding, to permit operation of the Benefit
Plans in accordance with their terms before giving effect to this letter
agreement.

     

    
      	
               
      

            	
              5.

            	
              Miscellaneous.  To
      the extent not subject to federal law, this letter agreement will be
      governed by the laws of the State of New Jersey, without giving effect to
      the conflicts of laws provisions thereof.  This letter agreement
      may be executed in two or more counterparts, each of which shall be deemed
      to be an original.  A signature transmitted by facsimile will be
      deemed to be an original signature.

            


    

     

    Please indicate your acceptance and
agreement to the terms and conditions set forth in this letter agreement by
countersigning same and returning a copy to the Company.  The Board of
Directors of the Company appreciates the concessions you are making and looks
forward to your continued leadership.

     

    
      
        
          
            
              
                	 
      	
                        Very
      truly yours,

                      
	 	 
	 
      	
                        Central
      Jersey Bancorp

                      
	 
      	 
      	 
      
	 	 	 
	 
      	
                        By:

                      	
                        /s/ Robert S. Vuono

                      
	 
      	
                        Name:

                      	
                        Robert
      S. Vuono

                      
	 
      	
                        Title:

                      	
                        Senior
      Executive Vice President,

                      
	 
      	 
      	
                        Chief
      Operating Officer and

                      
	 
      	 
      	
                        Secretary

                      


              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    Intending
to be legally bound by the terms of this letter agreement, I hereby agree with,
acknowledge the sufficiency of the consideration for, and accept the foregoing
terms as of the date set forth below.

     

    


     

    
      
        	
                /s/ James S. Vaccaro

              
	
                James
      S. Vaccaro

              


      

    

    


     

    


     

    Dated:  December
19, 2008