SUSSEX BANCORP (Form: 8-K, Received: 01/26/2010 15:31:49)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 20, 2009

SUSSEX BANCORP

(Exact name of registrant as specified in its charter)

New Jersey	0-29030	22-3475473
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

200 Munsonhurst Road
Franklin, New Jersey	07416
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (973) 827-2914

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b,c)

On January 21, 2010, the Registrant issued a press release announcing that it had appointed Mr. Anthony Labozzetta, age 46, as the new President and Chief Executive Officer of the Registrant and Sussex Bank, a New Jersey state chartered commercial bank and wholly owned subsidiary of the Registrant (the “Bank”).

Mr. Labozzetta has more than 24 years of experience in the Northern New Jersey marketplace. Prior to joining the Registrant and the Bank, Mr. Labozzetta served as Executive Vice President of Retail Distribution for the mid-Atlantic division of TD Bank North. Mr. Labozzetta joined TD Bank North when it acquired Interchange Financial Services Corporation at year end 2006, where he served as its Chief Operating Officer.

The Registrant and the Bank are parties to an Employment Agreement with Mr. Labozzetta pursuant to which he will serve as President and Chief Executive Officer of the Registrant and the Bank (the “Employment Agreement”). The Employment Agreement provides for a 3 year term such that, on each anniversary of the Employment Agreement’s commencement date, it shall be automatically extended for an additional year unless either party provides written notice terminating the automatic extension. Accordingly, the remaining term shall, absent a notice terminating the automatic extension, be no less than 2 years and no greater than 3 years. The Employment Agreement provides that Mr. Labozzetta will receive a base salary of $315,000, subject to increase or decrease as determined by the Board of Directors. He has further been granted 50,000 shares of the Registrant’s common stock, subject to forfeiture and restricted from transfer during the “Restricted Period,” as such term is defined in the Employment Agreement. Twenty percent of the shares will vest on December 31, 2012, and an additional twenty percent will vest each December 31 thereafter, subject to acceleration on the event of a change in control of the registrant or Mr. Labozzetta’s death or disability. He will also receive customary fringe benefits, including an automobile or cash allowance, consistent with his position as President and CEO of the Registrant and Bank. The Employment Agreement permits the Company to terminate Mr. Labozzetta’s employment for cause (as defined in the agreement) at any time. In the event Mr. Labozzetta is terminated for any reason other than cause, or in the event Mr. Labozzetta resigns his employment because he is reassigned to a position of lesser rank or status than President and Chief Executive Officer, his place of employment is relocated by more than 50 miles from its location on the date of the Employment Agreement, or his compensation or other benefits are reduced, Mr. Labozzetta, or in the event of his death, his beneficiary, will be entitled to receive his base salary at the time of such termination or resignation for the remaining term of the Employment Agreement, or one year, whichever is greater. In addition, the Company will continue to provide Mr. Labozzetta with certain insurance and other benefits through the end of the term of the Employment Agreement. Mr. Labozzetta’s Employment Agreement provides that upon the occurrence of a change in control, as such term is defined in the Employment Agreement, and in the event Mr. Labozzetta is subsequently terminated for reasons other than cause or in the event Mr. Labozzetta, within 18 months of the change in control, resigns his employment for good cause, he will be entitled to receive a lump sum severance payment equal to 2.99 times his then current base salary, including a “gross-up payment” in the event of any income or excise tax imposed on such payment. The Employment Agreement also prohibits Mr. Labozzetta from competing with the Bank and the Company for a period of one year following termination of his employment. A copy of the Employment Agreement is annexed hereto as Exhibit 10.1

Mr. Labozzetta has no family relationships with any other officer or director of the Registrant or the Bank.

The Registrant and the Bank also announced that Mr. Donald L. Kovach, the current Chairman, President and CEO, will remain in his capacity as Chairman of the Board of Directors. Pursuant to his Mr. Kovach’s employment agreement, Mr. Kovach’s base compensation is to be reduced to one-half of his base compensation prior to his leaving the positions of President and CEO. However, the Boards of the Registrant and the Bank have requested Mr. Kovach to provide additional transitional service to the Registrant and the Bank, for which he will be compensated at a rate equal to $10,000 per month, and continuing, at the discretion of the Board of Directors, for a period of at least 1 year.

(d)

On January 20, 2009, the Registrant announced that Katherine H. Caristia, had been appointed to the Board of Directors of the Registrant. Ms. Caristia formerly served as a member of the Bank’s Board of Directors, and will continue in that capacity. Ms. Caristia will also serve as a member of the Registrant’s audit committee.

There are no arrangements or understandings between the Ms. Caristia and any other persons pursuant to which she was selected as a director. There are no related party transactions between Ms. Caristia and the Registrant or the Bank. There are no material plans, contracts or arrangements to which Ms. Caristia is a party or in which she participates that were entered into or material amended in connection with Ms. Caristia’s appointment to the Board, nor are there any grants or awards to Ms. Caristia, in connection with the same.

(e)

Effective January 21, 2010, the Board of Directors of the Registrant and the Bank adopted the Sussex Bank Amended and Restated Executive Incentive and Deferred Compensation Plan (the “Plan”). Under the Plan, executives of the Registrant and the Bank who are selected to participate in the Plan may earn awards paid in both cash and shares of the Registrant’s common stock, provided that certain company-wide and/or individual performance criteria are met. Performance criteria for each participating executive will be determined annually by the Compensation Committee of the Registrant. Grants of common stock will be subject to a three year vesting requirement, and all awards will be subject to repayment in the event that it is subsequently determined that the performance metrics on which the award is based are subsequently determined not to have been satisfied, due to a financial restatement or otherwise. Participants in the Plan have the option to defer some or all of their cash awards, and some or all of their other cash compensation. Amounts so deferred will earn interest at a rate equal to the average interest rate earned by the Bank on its investment portfolio

Item. 9.01 Financial Statements and Exhibits

(d) Exhibits

	10.1	Employment Agreement of Mr. Anthony Labozzetta dated as of January 20, 2010.
	10.2	The Sussex Bank Amended and Restated Executive Incentive and Deferred Compensation Plan
	99.1	Press release issued on January 20, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Sussex Bancorp, has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUSSEX BANCORP
	(Registrant)

Dated: January 25, 2010	By:	/s/ Candace A. Leatham
		CANDACE A. LEATHAM
		Executive Vice President and Chief Financial Officer

Exhibit 10.1

EMPLOYMENT AGREEMENT

Employment Agreement (the "Employment Agreement") made as of this 20th day of January, 2010, by and between ANTHONY LABOZZETTA , an individual residing at 144 Summit Street, Englewood, New Jersey (the "Employee"), 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 "Bank"), and SUSSEX BANCORP , a New Jersey corporation with its principal place of business located at 200 Munsonhurst Road, Route 517, Franklin, New Jersey 07416 (the "Company"; the Bank and the Company sometimes collectively are referred to herein as "Employer").

WHEREAS , the Board of Directors of the Bank and the Board of Directors of the Company have each determined that it is in the best interests of each of the Bank and the Company to enter into this Agreement with Employee, and each respective Board has authorized the Bank and the Company 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:

1. Employment . The Company and the Bank hereby jointly agree 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 President and Chief Executive Officer of the Company and 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 Board of Directors of the Company and 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 upon the date of this Agreement, an annual base salary (the "Base Salary") of Three Hundred and Fifteen Thousand dollars ($315,000), which shall be payable in installments in accordance with Employer's usual payroll method. Annually thereafter, on or prior to the anniversary date of this Agreement, 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 the date hereof, the Company shall grant Employee an award of 50,000 shares of the Company’s common stock, no par value per share (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 December 31, 2012, with the Restricted Period then ending with regard to an additional twenty percent (20%) of the Restricted Stock on each December 31 st 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 hereunder, Employee shall be deemed to be disabled if he is unable to perform his essential job functions due t 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 the exclusive and unlimited use of an automobile or a cash allowance to be used for the purpose of maintaining an automobile of a type and style commensurate with the Employee's status with Employer.

(b) Insurance. The Employee shall be entitled to receive hospital, health, 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) Supplemental Retirement Plan. Employer will establish a supplemental retirement plan for Employee with terms and benefits that are mutually agreeable to Employee and Employer.

(d) 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 December 31, 2012 (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 each of the Company and the Bank at meetings of their respective Boards called and held for that purpose (after reasonable notice to the Employee and an opportunity for him, together with counsel, to be heard before each 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 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 (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 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 Executive Officer, (ii) relocates the Employee's principal place of employment by more than fifty 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 Executive Officer, (ii) relocate the Employee's principal place of employment by more than thirty 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

(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, for the first five (5) years after the Employment Commencement Date and during the Term, Employee shall be entitled to receive a lump sum payment equal to 2.99 times Employee's then current Base Salary and thereafter, Employee shall be entitled to receive a lump sum payment equal to 2.99 times Employee's then current Base Salary plus 2.99 times the greater of (i) the last bonus actually paid to Employee of (ii) Employee’s then current bonus payment eligibility at the Target level . 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 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 three (3) years.

9. Gross-Up of Payments

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Employer or its successor to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement

or otherwise, but determined without regard to any additional payments required under this Section 9 (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986 as amended and the regulations thereunder (the “Code”) or any interest or penalties are incurred by the Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of this Section 9, all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized firm of accountants selected by the Board (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Employer and the Employee within fifteen (15) business days of the receipt of notice from the Employee that there has been a Payment, or such earlier time as is requested by the Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Employee shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Employer. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Employer to the Employee within five days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Employee, it shall furnish the Employee with a written opinion that failure to report the Excise Tax on the Employee’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Employer and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not

have been made by the Employer should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Employer exhausts its remedies to appeal any determination that Excise Tax is due pursuant to this Section 9 and the Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Employer to or for the benefit of the Employee.

(c) The Employee shall notify the Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Employer of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Employee is informed in writing of such claim and shall apprise the Employer of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Employer notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall:

(i) give the Employer any information reasonably requested by the Employer relating to such claim,

(ii) take such action in connection with contesting such claim as the Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Employer,

(iii) cooperate with the Employer in good faith in order effectively to contest such claim, and

(iv) permit the Employer to participate in any proceedings relating to such claim;

provided, however, that the Employer shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Employer shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Employer shall determine; provided, however, that if the Employer directs the Employee to pay such claim and sue for a refund, the Employer shall advance the amount of such payment to the Employee, and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Employer’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Employee of an amount advanced by the Employer pursuant to Section 9(c), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Employer’s complying with the requirements of Section 9(c) promptly pay to the Employer the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Employer pursuant to Section 9(c), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Employer does not notify the Employee in writing of its intent to contest such denial

of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

10. 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 the National Association of Securities Dealers Automated Quotation System) 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 10 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.

11. 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 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.

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


	SUSSEX BANK


	By:	/s/
		Name:
		Title:


	SUSSEX BANCORP

	By:	/s/
		Name:
		Title:



	EMPLOYEE:


		/s/ Anthony Labozzetta
	Name:	Anthony Labozzetta

Exhibit 10.2

SUSSEXBANK

AMENDED AND RESTATED EXECUTIVE INCENTIVE AND DEFERRED COMPENSATION PLAN

THIS PLAN is adopted this 23rd day of March, 2005 and last amended on January 21, 2010, by SUSSEXBANK, a state-chartered commercial bank located in Franklin, New Jersey ( together with its subsidiaries, the “Company”). The purpose of this SussexBank Executive Incentive and Deferred Compensation Plan (the “Plan”) is to motivate and reward for achieving bank financial and strategic goals as well as to provide specified benefits to a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Company. The Plan includes an option for Participants to defer Compensation or Incentive Awards. This Plan shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

Article 1

Definitions

Whenever used in this Plan, the following words and phrases shall have the meanings specified:

1.1	“ Beneficiary ” means each designated person, or the estate of a deceased Participant, entitled to benefits, if any, upon the death of a Participant determined pursuant to Article 7.

1.2	“ Beneficiary Designation Form ” means the form established from time to time by the Plan Administrator that a Participant completes, signs and returns to the Plan Administrator to designate one or more beneficiaries.

1.3	“ Board ” means the Board of Directors of the Company as from time to time constituted.

1.4	“ Cash Incentive Award ” means that portion of an Incentive Award paid in cash pursuant to Article 3 hereof.

1.5

“ Change of Control ” means (a) the transfer of shares of the Company’s voting common stock such that one entity or one person acquires (or is deemed to acquire when applying Section 318 of the Code) more than fifty percent (50%) of the Company's outstanding voting common stock followed within twelve months by Participant’s Termination of Employment for reasons other than death, disability or retirement; or (b) such definition of Change of Control hereafter promulgated by the Secretary of the Treasury or other authorized regulatory body, in which case such definition shall supersede any other definition of Change of Control in this Plan and shall control the terms of this Plan.

1.6	“ Change of Control Benefit ” means the benefit set forth in Section 5.4.

1.7	“ Code ” means the Internal Revenue Code of 1986, as amended.

1.8	“ Compensation ” means the base salary that would be paid to the Participant during a Plan Year, absent deferrals, not including Incentive Awards and FICA taxes associated with such base salary.

1.9	“Common Stock” means the shares of common stock, no par value, of Sussex Bancorp.

1.10	“ Deferral Account ” means the Company’s accounting of a Participant’s accumulated Deferrals, plus accrued interest.

1.11	“ Deferrals ” means the amount of a Participant’s Compensation and any Cash Incentive Award which the Participant elects to defer according to this Plan.

1.12

“ Disability ” means (a) the Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (b) if the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Company. Upon the request of the Plan Administrator, the Participant must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

1.13	“ Disability Benefit ” means the benefit set forth in Section 5.3.

1.14	“ Early Termination ” means Termination of Employment before Normal Retirement Age for reasons other than death, Disability, Termination for Cause or following a Change of Control.

1.15	“ Early Termination Benefit ” means the benefit set forth in Section 5.2.

1.16	“ Effective Date ” means March 23, 3005.

1.17	“ Election Form ” means the forms established from time to time by the Plan Administrator that a Participant who elects to make Deferrals completes, signs and returns to the Plan Administrator to make an election under the Plan.

1.18	“ Incentive Award ” means for any one Plan Year, a Cash Incentive Award or a Stock Incentive Award, or both, and in either case in the amount determined in accordance with this Plan.

1.19	“ Normal Distribution Date ” means the later of the Normal Retirement Age or Termination of Employment.

1.20	“ Normal Retirement Age ” means the Participant attaining age 65.

1.21	“ Normal Retirement Benefit ” means the benefit set forth in Section 5.1.

1.22

“ Participant ” shall mean any employee of the Company or of Sussex Bancorp (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who, if they elect to make Deferrals, signs a Participation Agreement, an Election Form and a Beneficiary Designation Form, (iv) whose signed Participation Agreement, Election Form and Beneficiary Designation Form, if any, are accepted by the Plan Administrator, (v) who commences participation in the Plan, and (vi) whose Participation Agreement, if any, has not terminated. A Participant shall also mean any employee of the Company or Sussex Bancorp (i) who is selected to participate in the Plan and selected to receive an Incentive Award, and (ii) whose completed Beneficiary Designation Form is accepted by the Plan Administrator.

1.23

“ Participation Agreement ” shall mean a written agreement, as may be amended from time to time, which is entered into by and between the Company and a Participant. Each Participation Agreement executed by a Participant and the Company shall provide for the entire benefit to which such Participant is entitled under the Plan; should there be more than one Participation Agreement, the Participation Agreement bearing the latest date of acceptance by the Company shall supersede all

previous Participation Agreements in their entirety and shall govern such entitlement. The terms of any Participation Agreement may be different for any Participant, and any Participation Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Company and the Participant. For employees who are selected to receive an Incentive Award(s) but do not elect to defer Compensation or such Incentive Awards under the Deferral provisions of the Plan, a Participation Agreement shall not be necessary or required in order for such employee to be considered a Participant.

1.24	“ Plan Administrator ” means the plan administrator described in Article 9.

1.25	“ Plan Year ” means a twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date of this Plan.

1.26	“ Specified Employee ” means a key employee (as defined in section 416(i) of the Code without regard to paragraph (5) thereof) of a corporation any stock in which is publicly traded on an established securities market or otherwise.

1.27	“Stock Incentive Award” means that portion of an Incentive Award paid in shares of Common Stock pursuant to Article 3 hereof, and subject to the restrictions contained therein.

1.28	“ Termination of Employment ” means that the Participant ceases to be employed by the Company or Sussex Bancorp for any reason, voluntary or involuntary, other than by reason of a leave of absence approved by the Company.

1.28

" Unforeseeable Financial Emergency " means a severe financial hardship to a Participant, resulting from a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

Article 2

Selection, Enrollment and Eligibility

2.1

Selection by Plan Administrator . Participation in the Plan shall be limited to a select group of management and highly compensated employees of the Company or of Sussex Bancorp, as determined annually by the Plan Administrator in its sole discretion. From that group, the Plan Administrator shall select annually, in its sole discretion, employees to participate in the Plan.

2.2

Enrollment Requirements . As a condition to participation, each selected employee who also elects to make Deferrals shall complete, execute and return to the Plan Administrator a Participation Agreement, an Election Form and a Beneficiary Designation Form, all within thirty (30) days after the employee is notified by the Plan Administrator of his or her selection to participate in the Plan. In addition, the Plan Administrator shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary. However, for employees who are selected to receive an Incentive Award(s) but do not elect to defer Compensation or such Incentive Awards under the Deferral provisions of the Plan, a Participation Agreement shall not be necessary or required in order for such employee to enroll in the Plan or to be considered a Participant.

2.3

Eligibility; Commencement of Participation . An employee selected to participate in the Plan shall commence participation in the Plan on the first day of the month following the month in which the employee completes all enrollment requirements set forth in this Plan and required by the Plan Administrator, including returning all required documents to the Plan Administrator within the specified time period (the “Participation Date”). If an employee fails to meet all such

requirements within the period required, in accordance with Section 2.2, that employee shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Plan Administrator of the required documents.

2.4

Termination of Participation and/or Deferrals . If the Plan Administrator determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Plan Administrator shall have the right, in its sole discretion, to (i) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant's membership status changes, (ii) prevent the Participant from making future deferral elections and/or (iii) immediately distribute the Participant's then vested Deferral Account and terminate the Participant's participation in the Plan.

Article 3

Incentive Award

3.1	Determination of Incentive Award . Annually, the Plan Administrator shall take the following actions:

3.1.1 Incentive Awards. Annually, the Plan Administrator shall meet and set award opportunity levels and performance objectives for each Participant. The award opportunity levels shall be set as a percentage of a Participant’s Compensation, and shall be established at a “threshold” level, a “target” level and a “maximum” level of attainment of the performance objectives. Performance objectives may be based on the performance of the Company and/or Sussex Bancorp, individual performance criteria, or a combination of the two, as determined by the Plan Administrator in its discretion. In addition, the Plan Administrator shall determine whether award opportunities shall be for Cash Incentive Awards or Stock Incentive Awards, or both, and the level of award opportunities for each. The Plan Administrator shall complete a worksheet in the form of Exhibit A hereto for each Participant.

3.1.2 Stock Incentive Awards. Any portion of an Incentive Award designated as a Stock Incentive Award shall be funded, if earned, in shares of Common Stock. The shares of Common Stock shall be subject to forfeiture in the event a Participant’s employment with the Company or Sussex Bancorp is terminated during the “Restricted Period” (as defined below), and the Common Stock may not be transferred during the Restricted Period. During the Restricted Period, the Common Stock may either be issued in book entry form only, or if issued in certificated form, the Company may retain custody of the certificates, at Company’s option. If the Common Stock is issued in certificated form, the Participant shall execute such stock powers regarding such certificates as the Company shall reasonably request. During the Restricted Period, Participant shall be entitled to receive and retain any cash dividends paid on the Common Stock, and the Participant shall have the right to vote the Common Stock at any shareholders meeting of Sussex Bancorp. For purposes of this Plan, the Restricted Period shall be a period of time commencing on the date Common Stock is granted in satisfaction of a Stock Incentive Award and ending with regard to thirty three and one-third percent (33 & 1/3%) of the Common Stock on the first anniversary of the date if issuance, with the Restricted Period then ending with regard to an additional thirty three and one-third percent (33 & 1/3%) of the Restricted Stock on each anniversary date of issuance thereafter; provided, however, that in the event of a Change in Control, the Participant’s death or Disability, the Restricted Period shall end with regard to all of the Common Stock.

3.2

Incentive Award Payout . By March 14th, the Plan Administrator shall calculate and pay the Incentive Award earned by each Participant for the prior Plan Year. The Participant shall have the option to defer Cash Incentive Awards into a Deferral Account that the Company has established in accordance with Article 4. Unless otherwise applicable in Section 3.3, the Participant needs to be an employee of the Company or Sussex Bancorp at the time of payout under this Section 3.2 to receive an Incentive Award.

3.3

Early Termination . Not withstanding the provisions of Section 3.2 hereof, a Participant may, at the discretion of the Plan Administrator, receive a payout of an Incentive Award even if they are not employed by the Company or Sussex Bancorp on the date the Incentive Award is paid out, in the following circumstances:

3.3.1

Death . In the event of death, the Company will pay to the Participant’s Beneficiary the pro rata portion of the Incentive Award that had been earned by the Participant, based upon the portion of the Plan Year worked by the Participant.

3.3.2

Disability. If a Participant has a Termination of Employment as a result of a Disability, the Participant will receive the pro rata portion of the Incentive Award based on hours actually worked in such partial Plan Year. If a Participant remains an employee of the Company or Sussex Bancorp and has a Disability which results in receipt of long-term disability benefits, the Incentive Award for such Disability period shall be prorated during affected Plan Years so that no Incentive Award will be earned during such period of long-term Disability.

3.3.3

Retirement. Participants who retire will only receive Incentive Awards if they are actively employed on December 31 st of such Plan Year.

3.4 Forfeiture of Incentive Award. In the event an Incentive Award is granted based upon the attainment of a performance objective (whether individual or Company based) and it is subsequently determined, based upon a restatement of the Company’s financial statements or otherwise, that such performance objective was not in fact attained, or not attained to the level originally determined by the Plan Administrator, the Participant receiving such Incentive Award shall forfeit such Incentive Award (or in the event a performance objective is partially satisfied as revised, such portion of the Incentive Award as the Plan Administrator deems appropriate), regardless of whether such Incentive Award is a Cash Incentive Award, a Stock Incentive Award or both. In the event the Participant has elected to defer some or all of a Cash Incentive Award which is forfeited hereunder, the Plan Administrator shall debit such Participant’s Deferral Account for the amount of such forfeiture and any earnings thereon. In the event such Incentive Award is a Stock Incentive Award, Participant shall return such shares to the Company, regardless of whether the Restricted Period with regard to such shares has lapsed.

Article 4

Deferral Account

4.1	Establishing and Crediting . The Company shall establish a Deferral Account on its books for each Participant who elects to defer some or all of his or her Compensation or Cash Incentive Award and shall credit to the Deferral Account the following amounts:

4.1.1

Deferrals . The Compensation or Cash Incentive Award deferred by the Participant as of the time the Compensation or the Cash Incentive Award would have otherwise been paid to the Participant.

4.1.2

Interest . On March 31 of each Plan Year, both pre- and post retirement, interest shall be credited to the Deferral Account at a rate equal to the average interest rate earned by the Company on its investment portfolio. The interest rate calculated under this Section 4.1.2 shall be compounded monthly.

4.2	Statement of Accounts . The Plan Administrator shall provide to the Participant, within ninety (90) days after the end of each Plan Year, a statement setting forth the Deferral Account balance.

4.3

Accounting Device Only . The Deferral Account is solely a device for measuring amounts to be paid under this Plan. The Deferral Account is not a trust fund of any kind. The Participant is a general unsecured creditor of the Company for the payment of benefits. The benefits represent the mere Company promise to pay such benefits. The Participant's rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Participant's creditors.

Article 5

Benefits During Lifetime

5.1	Normal Retirement Benefit . Upon the Normal Distribution Date, the Company shall pay to any Participant for whom a Deferral Account has been established the benefit described in this Section 5.1 in lieu of any other benefit under this Article.

5.1.1

Amount of Benefit . The benefit under this Section 5.1 is the Deferral Account balance at the Participant's Normal Distribution Date.

5.1.2

Payment of Benefit . The Company shall pay the benefit to the Participant as elected by the Participant on the Election Form.

5.2	Early Termination Benefit . Upon the Participant’s Early Termination, the Company shall pay to any Participant for whom a Deferral Account has been established the benefit described in this Section 5.2 in lieu of any other benefit under this Article.

5.2.1

Amount of Benefit . The benefit under this Section 5.2 is the Deferral Account balance at the Participant's Termination of Employment.

5.2.2

Payment of Benefit . The Company shall pay the benefit to the Participant as elected by the Participant on the Election Form.

5.3	Disability Benefit . If the Participant terminates employment due to Disability prior to Normal Retirement Age, the Company shall pay to any Participant for whom a Deferral Account has been established the benefit described in this Section 5.3 in lieu of any other benefit under this Article.

5.3.1

Amount of Benefit . The benefit under this Section 5.3 is one hundred percent (100%) the Deferral Account balance at the Participant's Termination of Employment.

5.3.2

Payment of Benefit . The Company shall pay the benefit to the Participant as elected by the Participant on the Election Form.

5.4.	Change of Control Benefit . Upon a Change of Control, the Company shall pay to any Participant for whom a Deferral Account has been established the benefit described in this Section 5.4 in lieu of any other benefit under this Article.

5.4.1

Amount of Benefit . The benefit under this Section 5.4 is one hundred percent (100%) of the Deferral Account balance on the Participant’s Termination of Employment.

5.4.2

Payment of Benefit . The Company shall pay the benefit to the Participant as elected by the Participant on the Election Form.

5.4.3 Excess Parachute Payment . Notwithstanding any provision of this Plan to the contrary, to the extent any benefit would create an excise tax under the excess parachute rules of Section 280G of the Code, the Company shall reduce the benefit paid under this Plan to the extent it would not be an excess parachute payment.

5.5

Hardship Distribution . Upon the Plan Administrator’s determination (following petition by the Participant) that the Participant has suffered an Unforeseeable Financial Emergency, the Company shall distribute to the Participant all or a portion of the Deferral Account balance as determined by the Plan Administrator, but in no event shall the distribution be greater than is necessary to relieve the financial hardship, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or

otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

5.6 Rules Limiting Payment of Benefits .

5.6.1 Specified Employees . In the case of a Specified Employee, payment of benefits under Sections 5.1, 5.2 or 5.3 shall not be made before the date which is 6 months after the date of separation from service (or, if earlier, the date of death of the Specified Employee).

5.6.2 Acceleration of Benefits . Benefits payable under Plan shall not be accelerated, except as provided under Sections 5.3, 5.4, 5.5 and Article 6.

Article 6

Death Benefits

6.1

Death During Active Service . If a Participant for whom a Deferral Account has been established dies while in the employment of the Company, the Company shall pay to the Beneficiary one hundred percent (100%) of the Deferral Account balance as of the date of the Participant’s death, as elected by the Participant on the Election Form.

6.2

Death During Payment of a Benefit . If the Participant dies after any benefit payments have commenced under this Plan but before receiving all such payments, the Company shall pay to the Beneficiary the remaining Deferral Account balance as of the date of the Participant’s death, in a lump sum within thirty (30) days following the Participant’s death.

6.3

Death After Termination of Employment But Before Benefit Payments Commence . If the Participant is entitled to benefit payments under this Plan, but dies prior to the commencement of said benefit payments, the Company shall pay to the Beneficiary the Deferral Account balance as of the date of the Participant’s death, in a lump sum within thirty (30) days following the Participant’s death.

Article 7

Beneficiaries

7.1

Beneficiary . Each Participant for whom a Deferral Account has been established shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of the Company in which the Participant participates.

7.2

Beneficiary Designation; Change; Spousal Consent . A Participant for whom a Deferral Account has been established shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Plan Administrator or its designated agent. If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Plan Administrator, must be signed by that Participant's spouse and returned to the Plan Administrator. The Participant's beneficiary designation shall be deemed automatically revoked if the beneficiary predeceases the Participant or if the Participant names a spouse as beneficiary and the marriage is subsequently dissolved. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Plan Administrator prior to the Participant’s death.

7.3	Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

7.4

No Beneficiary Designation . If the Participant dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Participant, then the Participant’s spouse shall be the designated Beneficiary. If the Participant has no surviving spouse, the benefits shall be made to the personal representative of the Participant's estate.

7.5

Facility of Payment . If the Plan Administrator determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct payment of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

Article 8

General Limitations

8.1	Termination for Cause . Notwithstanding any provision of this Plan to the contrary, the Company shall not pay any benefit under this Plan that is in excess of the Participant’s Deferrals (i.e., the interest earned on the Deferral Account) if the Board terminates the Participant’s employment for:

(a)

Gross negligence or gross neglect of duties to the Company;

(b)

Commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the Participant’s employment with the Company;

(c)

Fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Participant's employment and resulting in an adverse effect on the Company; or

(d)

If the Participant is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act (“FDIA”)

Article 9

Administration Of Plan

9.1

Plan Administrator Duties . This Plan shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall appoint. Unless and until otherwise changed by the Board of Directors of the Company, the Compensation Committee of Sussex Bancorp shall serve as the Plan Administrator. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and (ii) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan.

9.2	Agents . In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Company.

9.3

Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

9.4

Indemnity of Plan Administrator . The Company shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Plan Administrator or any of its members.

9.5

Company Information . To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the Compensation of its Participants, the date and circumstances of the retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Plan Administrator may reasonably require.

Article 10

Claims and Review Procedures

10.1	Claims Procedure . A Participant or Beneficiary (“claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows:

10.1.1

Initiation – Written Claim . The claimant initiates a claim by submitting to the Company a written claim for the benefits.

10.1.2

Timing of Company Response . The Company shall respond to such claimant within 90 days after receiving the claim. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.

10.1.3

Notice of Decision . If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial. The Company shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(a)

The specific reasons for the denial,

(b)

A reference to the specific provisions of the Plan on which the denial is based,

(c)

A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(d)

An explanation of the Plan’s review procedures and the time limits applicable to such procedures, and

(e)

A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

10.2	Review Procedure . If the Company denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows:

10.2.1

Initiation – Written Request . To initiate the review, the claimant, within 60 days after receiving the Company’s notice of denial, must file with the Company a written request for review.

10.2.2

Additional Submissions – Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Company shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other

information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

10.2.3

Considerations on Review . In considering the review, the Company shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

10.2.4

Timing of Company Response . The Company shall respond in writing to such claimant within 60 days after receiving the request for review. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision.

10.2.5

Notice of Decision . The Company shall notify the claimant in writing of its decision on review. The Company shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(a)

The specific reasons for the denial,

(b)

A reference to the specific provisions of the Plan on which the denial is based,

(c)

A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and

(d)

A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

Article 11

Amendments and Termination

11.1	Termination .

11.1.1 Plan Termination. The Company reserves the right to terminate the Plan at any time with respect to any or all of its participating employees, by action of its Board. Upon the termination of the Plan, the Participation Agreements of the affected Participants shall terminate and their vested Deferral Account balances shall be determined (i) as if they had experienced Early Termination on the date of Plan termination; or (ii) if Plan termination occurs after a Participant’s Normal Retirement Age, then with respect to that Participant as if he or she had retired on the date of Plan termination. The Deferral Account balance shall be paid to the affected Participants in a lump sum within thirty (30) days following such Plan termination. The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination.

11.1.2 Aggregation of Plans . Distributions made as a result of Plan termination shall be made only if the Company terminates and liquidates all agreements, methods, programs, and other arrangements sponsored by the Company that would be aggregated with any terminated and liquidated agreements, methods, programs and other arrangements under Treasury Regulation section 1.409A-1(c), if the Participant had deferrals of compensation under all of the agreements, methods, programs and other arrangements that are terminated and liquidated. No payments in liquidation of the Plan shall be made within 12 months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan, other than payments that would be payable under the terms of the Plan if the action to terminate and liquidate the Plan had not occurred. All payments shall be made within 24 months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan; and the Company does not adopt a new plan that would be aggregated with any terminated and liquidated plan under Treasury

Regulation section 1.409A-1(c), if the Company participated in both plans, at any time within three years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan.

11.2

Amendment . The Company may, at any time, amend or modify the Plan in whole or in part by the action of its Board; provided, however , that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant's vested Deferral Account balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced Early Termination as of the effective date of the amendment or modification, or if the amendment or modification occurs after a Participant’s Normal Retirement Age, as if the Participant had retired as of the effective date of the amendment or modification, and (ii) no amendment or modification of this Section 11.2 of the Plan shall be effective. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification.

11.3	Participation Agreement . Despite the provisions of Sections 11.1 and 11.2 above, if a Participant's Participation Agreement contains benefits or limitations that are not in this Plan document, the Company may only amend or terminate such provisions with the consent of the Participant.

Article 12

Miscellaneous

12.1	Binding Effect . This Plan shall bind the Participant and the Company and their beneficiaries, survivors, executors, administrators and transferees.

12.2

No Guarantee of Employment . This Plan is not a contract for employment. It does not give the Participant the right to remain an employee of the Company, nor does it interfere with the Company's right to discharge the Participant. It also does not require the Participant to remain an employee nor interfere with the Participant's right to terminate employment at any time.

12.3	Non-Transferability . Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

12.4	Tax Withholding . The Company shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.

12.5	Applicable Law . The Plan and all rights hereunder shall be governed by the laws of New Jersey, except to the extent preempted by the laws of the United States of America.

12.6

Unfunded Arrangement . The Participant and the Beneficiary are general unsecured creditors of the Company for the payment of benefits under this Plan. The benefits represent the mere promise by the Company to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Participant's life is a general asset of the Company to which the Participant and the Beneficiary have no preferred or secured claim.

12.7

Reorganization . The Company shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of the Company under this Plan. Upon the occurrence of such event, the term “Company” as used in this Plan shall be deemed to refer to the successor or survivor company.

12.8

Entire Agreement . This Plan and the Participant’s Participation Agreement constitute the entire agreement between the Company and the Participant as to the subject matter hereof. No rights are granted to the Participant by virtue of (i) this Plan other than those specifically set forth herein; or (ii) the Participation Agreement other than those specifically set forth therein.

12.9	Interpretation . Wherever the fulfillment of the intent and purpose of this Plan requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural

12.10

Alternative Action . In the event it shall become impossible for the Company or the Plan Administrator to perform any act required by this Plan, the Company or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Plan and is in the best interests of the Company.

12.11

Headings . Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

12.12

Validity . In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

12.13

Notice . Any notice or filing required or permitted to be given to the Plan Administrator under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

IN WITNESS WHEREOF, the Company has signed this Plan document as of January 21, 2010.

	Company:

	SussexBank

	By:	/s/

	Title:

Exhibit 99.1

SUSSEX BANCORP APPOINTS ANTHONY LABOZZETTA AS

PRESIDENT AND CHIEF EXECUTIVE OFFICER

FRANKLIN, N.J., Jan. 22, 2010 (GLOBE NEWSWIRE) -- Sussex Bancorp (Nasdaq: SBBX - News ) today announced the appointment of Mr. Anthony Labozzetta to serve as President and Chief Executive Officer of the Company and its Sussex Bank subsidiary. Mr. Labozzetta is an experienced banking executive with more than 24 years of experience in the Northern New Jersey marketplace. Mr. Labozzetta recently served as Executive Vice President of Retail Distribution for the Mid-Atlantic Division of TD Bank. Mr. Labozzetta joined TD Bank when its parent company acquired Interchange Financial Services Corporation. While at Interchange, Mr. Labozzetta was an integral part of the management team that grew the company from approximately $900 million in assets to over $1.6 million in assets and 32 retail locations through both organic growth and acquisitions. Mr. Labozzetta had served as the Chief Operating Officer of Interchange prior to its acquisition, after previously serving as Chief Financial Officer and joining the company as Treasurer.

The Company separately announced that Mr. Donald L. Kovach, Chairman, President and Chief Executive Officer, will remain as the Chairman of the Board of the Company and the Bank. In that capacity, he will, among other responsibilities, assist Mr. Labozzetta in his transition into the Sussex County, New Jersey marketplace.

Mr. Labozzetta stated: "I look forward to the opportunities and challenges presented by this position with Sussex. I believe we can mold this bank into the premier community bank franchise in the markets we serve."

Mr. Donald L. Kovach stated: "Our Search Committee reviewed many potential candidates for this position and believed Tony was by far the best qualified. I look forward to working with him to enhance the value of Sussex Bancorp"

Sussex Bancorp is the holding company for Sussex Bank, a community bank serving commercial and individual customers across northern New Jersey, Orange County, New York and Pike and Wayne counties in Pennsylvania through ten branch locations. The Company is also the parent of Tri-State Insurance Agency, a full-service insurance agency located in Sussex County, New Jersey.