Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 23, 2017, the Registrant and the Bank of New Jersey, the Registrants wholly owned subsidiary (the Bank, and collectively with the Registrant, the Employer), entered into an Amended and Restated Employment Agreement (the Agreement) with Nancy E. Graves, the President and Chief Executive Officer of the Registrant and President and Chief Executive Officer of Bank. The Agreement has an initial term of three years, provided that the term shall be extended for an additional year on the first anniversary of the Agreement and on each anniversary thereafter, unless either the Employer or the Ms. Graves delivers written notice to the other party not less than 90 days prior to the applicable anniversary.
Ms. Graves is entitled to a base salary of $450,000, subject to annual review and potential increase, discretionary and/or performance-based annual cash incentive/bonus payments as authorized by the board of directors or compensation committee of the Registrant, and to participate in the equity compensation plans maintained by the Company from time to time. Ms. Graves cash bonus for the 2017 fiscal year shall not exceed $150,000. Ms. Graves is also entitled to a reimbursement of reasonable business expenses and to participate in the benefit plans offered to the Banks employees, generally, such as medical insurance, group term life insurance and a 401(k) plan. Ms. Graves is also eligible to participate in the Registrants long-term equity incentive program and pursuant to the agreement was granted an award of 30,000 shares of the Registrants restricted stock, with one-third vesting annually on December 31, 2017, 2018, and 2019, respectively.
The agreement contemplates termination in various circumstances. In the event of termination by the Employer as a result of Ms. Graves disability, as defined in the agreement, the Registrant will pay to Ms. Graves any bonus or other short-term incentive compensation earned, but not yet paid, and cause any unvested portion of the restricted stock award referenced above to become fully vested. In the event Ms. Graves is terminated other than for cause, as defined in the agreement, or if she resigns for good reason, as also defined in the agreement, she will be entitled to receive severance pay equal the aggregate of her then current base salary plus the average of her last two years annual bonus(es), multiplied by two. In addition, Employer will pay an amount towards Ms. Graves monthly COBRA premiums in an amount equal to the amount the Registrant was paying immediately prior to termination for one year. If Ms. Graves is terminated for cause, she shall not be entitled to any further compensation pursuant to the Agreement.
The Agreement includes non-compete, non-solicitation and confidentiality provisions, as well as a compensation clawback provision.
If Ms. Graves employment is terminated without cause or if she resigns for Good Reason, in each case within one year after a Change in Control, as defined in the Agreement, then she shall receive her a single lump sum amount equal to 299% of the sum of (A) her current rate of annual base salary in effect immediately preceding such termination and (B) the average of her last two years annual bonus(es). In addition, Employer will pay an amount towards Ms. Graves monthly COBRA premiums in an amount equal to what Employer was paying immediately prior to termination for one year. These payments are subject to reduction in the event they
would constitute an excess parachute payment within the meaning of Section 280G of the Internal Revenue Code and be subject to the excise tax imposed by Section 4999 of the Internal revenue Code.
The foregoing descriptions of the employment agreement and change of control agreement with Ms. Graves are qualified in their entirety by reference to the text of the employment agreement and change of control agreement, which are filed as Exhibits 10.1 to this current report on Form 8-K and incorporated herein by reference.