x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended March 31,
2009
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from _____ to
_____
|
COMMUNITY
PARTNERS BANCORP
|
||
(Exact
Name of Registrant as Specified in Its Charter)
|
New
Jersey
|
20-3700861
|
|
(State
of Other Jurisdiction
of
Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
1250
Highway 35 South, Middletown, New Jersey
|
07748
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(732)
706-9009
|
||
(Registrant’s
Telephone Number, Including Area Code)
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large
accelerated filer
|
o |
Accelerated
filer
|
o |
Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
o |
Smaller
reporting company
|
x |
Page
|
|||||
1 | |||||
1 | |||||
2 | |||||
3 | |||||
4 | |||||
5 | |||||
14 | |||||
30 | |||||
30 | |||||
31 | |||||
34 |
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2009
|
2008
|
|||||||
INTEREST
INCOME:
|
||||||||
Loans,
including fees
|
$ | 6,467 | $ | 7,234 | ||||
Investment
securities
|
669 | 749 | ||||||
Federal
funds sold
|
18 | 36 | ||||||
Total
Interest Income
|
7,154 | 8,019 | ||||||
INTEREST
EXPENSE:
|
||||||||
Deposits
|
2,471 | 2,941 | ||||||
Securities
sold under agreements to repurchase
|
70 | 128 | ||||||
Borrowings
|
74 | 83 | ||||||
Total
Interest Expense
|
2,615 | 3,152 | ||||||
Net
Interest Income
|
4,539 | 4,867 | ||||||
PROVISION
FOR LOAN LOSSES
|
150 | 85 | ||||||
Net
Interest Income after Provision for Loan Losses
|
4,389 | 4,782 | ||||||
NON-INTEREST
INCOME:
|
||||||||
Service
fees on deposit accounts
|
156 | 178 | ||||||
Other
loan customer service fees
|
18 | 31 | ||||||
Earnings
from investment in life insurance
|
35 | 38 | ||||||
Net
realized gain on sale of securities
|
487 | - | ||||||
Other
income
|
178 | 131 | ||||||
Total
Non-Interest Income
|
874 | 378 | ||||||
NON-INTEREST
EXPENSES:
|
||||||||
Salaries
and employee benefits
|
2,339 | 2,174 | ||||||
Occupancy
and equipment
|
824 | 818 | ||||||
Professional
|
183 | 206 | ||||||
Insurance
|
234 | 155 | ||||||
Advertising
|
76 | 56 | ||||||
Data
processing
|
242 | 112 | ||||||
Outside
services fees
|
135 | 114 | ||||||
Amortization
of identifiable intangibles
|
77 | 87 | ||||||
Other
operating
|
357 | 322 | ||||||
Total
Non-Interest Expenses
|
4,467 | 4,044 | ||||||
Income
before Income Taxes
|
796 | 1,116 | ||||||
INCOME
TAX EXPENSE
|
284 | 401 | ||||||
Net
Income
|
512 | 715 | ||||||
Preferred
stock dividend and discount accretion
|
(96 | ) | - | |||||
Net
income available to common shareholders
|
$ | 416 | $ | 715 | ||||
EARNINGS
PER COMMON SHARE:
|
||||||||
Basic
|
$ | 0.06 | $ | 0.10 | ||||
Diluted
|
$ | 0.06 | $ | 0.10 | ||||
Weighted
average common shares outstanding (in thousands):
|
||||||||
Basic
|
6,960 | 6,937 | ||||||
Diluted
|
6,966 | 7,080 |
Common
Stock
|
||||||||||||||||||||||||
Preferred
Stock
|
Outstanding
Shares
|
Amount
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
Total
Shareholders’
Equity
|
|||||||||||||||||||
Balance
December 31, 2008
|
$ | - | 6,959,821 | $ | 68,197 | $ | 4,738 | $ | 377 | $ | 73,312 | |||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
income
|
- | - | - | 512 | - | 512 | ||||||||||||||||||
Change
in net unrealized gain (loss)
on
securities available for sale,
net
of reclassification
adjustment
and tax effect
|
- | - | - | - | (379 | ) | (379 | ) | ||||||||||||||||
Total
comprehensive income
|
- | - | - | - | - | 133 | ||||||||||||||||||
Preferred
stock and common stock
warrants
issued
|
8,398 | - | 602 | - | - | 9,000 | ||||||||||||||||||
Preferred
stock discount accretion
|
20 | - | - | (20 | ) | - | - | |||||||||||||||||
Dividends
on preferred stock
|
- | - | - | (76 | ) | - | (76 | ) | ||||||||||||||||
Stock
option compensation expense
|
- | - | 83 | - | - | 83 | ||||||||||||||||||
Balance,
March 31, 2009
|
$ | 8,418 | 6,959,821 | $ | 68,882 | $ | 5,154 | $ | (2 | ) | $ | 82,452 | ||||||||||||
Balance
December 31, 2007
|
$ | - | 6,722,784 | $ | 66,552 | $ | 5,805 | $ | 100 | $ | 72,457 | |||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
income
|
- | - | - | 715 | - | 715 | ||||||||||||||||||
Change
in net unrealized gain (loss)
on
securities available for sale,
net
of tax effect
|
- | - | - | - | 417 | 417 | ||||||||||||||||||
Total
comprehensive income
|
1,132 | |||||||||||||||||||||||
Options
exercised
|
- | 14,519 | 82 | - | - | 82 | ||||||||||||||||||
Cumulative
effect adjustment –
adoption
of accounting for post
retirement
benefit costs
|
- | - | - | (386 | ) | - | (386 | ) | ||||||||||||||||
Balance,
March 31, 2008
|
$ | - | 6,737,303 | $ | 66,634 | $ | 6,134 | $ | 517 | $ | 73,285 |
Three
Months Ended
March
31,
|
||||||||
2009
|
2008
|
|||||||
(in
thousands)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 512 | $ | 715 | ||||
Adjustments
to reconcile net income to net cash provided by (used in)
operating
activities:
|
||||||||
Depreciation
and amortization
|
279 | 251 | ||||||
Provision
for loan losses
|
150 | 85 | ||||||
Intangible
amortization
|
77 | 87 | ||||||
Net
amortization (accretion) of securities premiums and
discounts
|
10 | (4 | ) | |||||
Earnings
from investment in life insurance
|
(35 | ) | (38 | ) | ||||
Stock
option compensation expense
|
83 | - | ||||||
Net
realized gain on sale of securities
|
(487 | ) | - | |||||
Decrease
(increase) in assets:
|
||||||||
Accrued
interest receivable
|
(41 | ) | 140 | |||||
Other
assets
|
(646 | ) | 509 | |||||
(Decrease)
increase in liabilities:
|
||||||||
Accrued
interest payable
|
(81 | ) | (123 | ) | ||||
Other
liabilities
|
131 | (234 | ) | |||||
Net
cash (used in) provided by operating activities
|
(48 | ) | 1,388 | |||||
Cash
flows from investing activities:
|
||||||||
Purchase
of securities available-for-sale
|
(9,269 | ) | (10,754 | ) | ||||
Purchase
of securities held-to-maturity
|
(1,183 | ) | - | |||||
Proceeds
from sales of securities available-for-sale
|
7,940 | |||||||
Proceeds
from repayments and maturities of securities
available-for-sale
|
10,100 | 14,237 | ||||||
Net increase
in loans
|
(14,942 | ) | (6,293 | ) | ||||
Purchases
of premises and equipment
|
(55 | ) | (626 | ) | ||||
Net
cash used in investing activities
|
(7,409 | ) | (3,436 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Net
increase in deposits
|
39,227 | 10,684 | ||||||
Net
increase in securities sold under agreements to repurchase
|
2,127 | 2,811 | ||||||
Proceeds
from issuance of preferred stock
|
9,000 | - | ||||||
Proceeds
from exercise of stock options
|
- | 82 | ||||||
Net
cash provided by financing activities
|
50,354 | 13,577 | ||||||
Net
increase in cash and cash equivalents
|
42,897 | 11,529 | ||||||
Cash
and cash equivalents – beginning
|
23,017 | 10,013 | ||||||
Cash and cash equivalents -
ending
|
$ | 65,914 | $ | 21,542 | ||||
Supplementary
cash flow information:
|
||||||||
Interest
paid
|
$ | 2,696 | $ | 3,275 | ||||
Income
taxes paid
|
$ | 1,476 | $ | - | ||||
Supplementary
schedule of non-cash activities:
|
||||||||
Other
real estate acquired in settlement of loans
|
$ | 1,025 | $ | - |
Three
Months Ended
March
31,
|
||||||||
2009
|
2008
|
|||||||
(Dollars
in thousands, except per share data)
|
||||||||
Net
income
|
$ | 512 | $ | 715 | ||||
Preferred
stock dividend and discount accretion
|
(96 | ) | - | |||||
Net
income available to common shareholders
|
$ | 416 | $ | 715 | ||||
Weighted
average common shares outstanding
|
6,959,821 | 6,937,482 | ||||||
Effect
of dilutive securities, stock options and warrants
|
5,871 | 142,927 | ||||||
Weighted
average common shares outstanding used to
c
alculate
diluted earnings per common share
|
6,965,692 | 7,080,409 | ||||||
Basic
earnings per common share
|
$ | 0.06 | $ | 0.10 | ||||
Diluted
earnings per common share
|
$ | 0.06 | $ | 0.10 |
Three
Months Ended
March
31,
|
|||||||||
2009
|
2008
|
||||||||
(Dollars
in thousands)
|
|||||||||
Unrealized
holding (losses) gains on
available-for-sale
securities
|
$ | (151 | ) | $ | 686 | ||||
Less:
|
Reclassification
adjustments for
gains
(losses) included in net
income
|
487 | - | ||||||
(638 | ) | 686 | |||||||
Tax
effect
|
259 | (269 | ) | ||||||
Net
unrealized (losses) gains
|
$ | (379 | ) | $ | 417 |
Number
of
Shares
|
Weighted
Average
Price
|
Weighted
Average
Remaining
Life
|
Aggregate
Intrinsic
Value
|
||||||||||
Options
outstanding, beginning of year
|
744,696 | $ | 9.28 | ||||||||||
Options
forfeited
|
(17,722 | ) | 6.58 | ||||||||||
Options
granted
|
413,000 | 3.75 | |||||||||||
Options
outstanding, March 31, 2009
|
1,139,974 | $ | 7.32 |
5.96
years
|
$ | -0- | |||||||
Options
exercisable, March 31, 2009
|
791,974 | $ | 8.89 |
4.27
years
|
$ | -0- | |||||||
Option
price range at March 31, 2009
|
$ | 3.35 to $15.79 |
Dividend
yield
|
0.00 | % | |||
Expected
volatility
|
28.35 | % | |||
Risk-free
interest rate
|
1.79 | % | |||
Expected
life
|
7
years
|
||||
Weighted
average fair value
of
options granted
|
$ | 1.28 |
|
Level
1
:
|
Unadjusted
quoted prices in active markets that are accessible at the measurement
date for identical, unrestricted assets or
liabilities.
|
|
Level
2
:
|
Quoted
prices in markets that are not active, or inputs that are observable
either directly or indirectly, for substantially the full term of the
asset or liability.
|
|
Level
3
:
|
Prices
or valuation techniques that require inputs that are both significant to
the fair value measurement and unobservable (i.e. supported with little or
no market activity).
|
Description
|
(Level
1)
Quoted
Prices
in
Active
Markets
for
Identical
Assets
|
(Level
2)
Significant
Other
Observable
Inputs
|
(Level
3)
Significant
Unobservable
Inputs
|
Total
|
||||||||||||
(in
thousands)
|
||||||||||||||||
At March 31, 2009
|
||||||||||||||||
Securities
available for sale
|
$ | - | $ | 47,687 | $ | 109 | $ | 47,796 | ||||||||
At December 31, 2008
|
||||||||||||||||
Securities
available for sale
|
$ | - | $ | 56,549 | $ | 177 | $ | 56,726 |
Fair
Value Measurements Using Significant
Unobservable
Inputs (Level 3)
|
||||||||
Securities
available for sale
|
||||||||
Three
Months
Ended
March
31, 2009
|
Three
Months
Ended
March
31, 2008
|
|||||||
(in
thousands)
|
||||||||
Balance
at beginning of period
|
$ | 177 | $ | 974 | ||||
Total
gains/(losses) – (realized/unrealized):
|
||||||||
Included
in earnings
|
- | - | ||||||
Included
in other comprehensive income (loss)
|
(68 | ) | (104 | ) | ||||
Purchases,
issuances and settlements
|
- | - | ||||||
Transfers
in and/or out of Level 3
|
- | - | ||||||
Balance
at end of period
|
$ | 109 | $ | 870 |
Description
|
(Level
1)
Quoted
Prices
in
Active
Markets
for
Identical
Assets
|
(Level
2)
Significant
Other
Observable
Inputs
|
(Level
3)
Significant
Unobservable
Inputs
|
Total
|
||||||||||||
At March 31, 2009
|
||||||||||||||||
Impaired
loans
|
$
|
-
|
$
|
-
|
$
|
4,334
|
$
|
4,334
|
||||||||
Other
real estate owned
|
$
|
-
|
$
|
-
|
$
|
1,025
|
$
|
1,025
|
||||||||
At December 31, 2008
|
||||||||||||||||
Impaired
loans
|
$
|
-
|
$
|
-
|
$
|
6,175
|
$
|
6,175
|
·
|
Securities –
The fair
value of securities available for sale (carried at fair value) are
determined by obtaining quoted market prices on nationally recognized
securities exchanges (Level 1), or matrix pricing (Level 2), which is a
mathematical technique used widely in the industry to value debt
securities without relying exclusively on quoted market prices for the
specific securities but rather by relying on the securities’ relationship
to other benchmark quoted prices. For certain securities which
are not traded in active markets or are subject to transfer restrictions,
valuations are adjusted to reflect illiquidity and/or non-transferability,
and such adjustments are generally based on available market evidence
(Level 3). In the absence of such evidence, management’s best
estimate is used. Management’s best estimate consists of both
internal and external support on certain Level 3
investments. Internal cash flow models using a present value
formula that includes assumptions market participants would use along with
indicative exit pricing obtained from broker/dealers (where available)
were used to support fair values of certain Level 3
investments.
|
·
|
Impaired loans
–
Impaired loans are those that are accounted for under FASB Statement No.
114,
Accounting by
Creditors for Impairment of a Loan
(“SFAS 114”)
,
in which the Company
has measured impairment generally based on the fair value of the loan’s
collateral. Fair value is generally determined based upon
independent third party appraisals of the properties, or discounted cash
flows based upon the expected proceeds. These assets are
included as Level 3 fair values, based upon the lowest level of input that
is significant to the fair value measurements. For the quarter
ended March 31, 2009, fair value consists of the loan balances of
$4,334,000 net of valuation allowances of $1,288,000. For the
year ended December 31, 2008, fair value consists of loan balances of
$6,175,000, net of a valuation allowance of
$2,257,000. Additional provisions for loan losses on impaired
loans of $42,000 and $2,257,000 were recorded during the three months
ended March 31, 2009 and the year ended December 31, 2008,
respectively.
|
·
|
Other real estate owned
– Real estate properties acquired through, or in lieu of loan
foreclosure are to be sold and are carried at fair value less cost to
sell. Fair value is based upon independent market prices,
appraised value of the collateral or management’s estimation of the value
of the collateral. These assets are included in Level 3 fair
value based upon the lowest level of input that is significant to the fair
value measurement. Two properties were acquired through
foreclosure in the period ending March 31, 2009 and are carried at their
net realizable value of $1,025,000 based on current
appraisals.
|
(Annualized)
Three
Months
ended
March
31,
2009
|
For
the
Year
ended
December
31,
2008
|
||
Performance
Ratios:
|
|||
Return
on average assets
|
0.35%
|
0.15%
|
|
Return
on average tangible assets
|
0.37%
|
0.15%
|
|
Return
on average shareholders' equity
|
2.59%
|
1.09%
|
|
Return
on average tangible shareholders' equity
|
3.83%
|
1.69%
|
|
Average
equity to average assets
|
13.48%
|
13.35%
|
|
Average
tangible equity to average tangible assets
|
9.54%
|
9.03%
|
|
Dividend
payout
|
0.00%
|
0.00%
|
(1) | Included in interest income on loans are loan fees. |
(2) | Includes non-performing loans. |
(3)
|
The
interest rate spread is the difference between the weighted average yield
on average interest earning assets and the weighted average cost of
average interest bearing
liabilities.
|
(4)
|
The
interest rate margin is calculated by dividing annualized net interest
income by average interest earning
assets.
|
Three
Months Ended March 31, 2009
Compared
to Three Months Ended
March
31, 2008
|
||||||||||||
Increase
(Decrease) Due To
|
||||||||||||
Volume
|
Rate
|
Net
|
||||||||||
Interest
Earned On:
|
||||||||||||
Federal
funds sold
|
$ | 215 | $ | (233 | ) | $ | (18 | ) | ||||
Investment
securities
|
(24 | ) | (56 | ) | (80 | ) | ||||||
Loans
|
546 | (1,313 | ) | (767 | ) | |||||||
Total
Interest Income
|
737 | (1,602 | ) | (865 | ) | |||||||
Interest
Paid On:
|
||||||||||||
NOW
deposits
|
1 | (46 | ) | (45 | ) | |||||||
Savings
deposits
|
716 | 145 | 861 | |||||||||
Money
market deposits
|
(216 | ) | (272 | ) | (488 | ) | ||||||
Time
deposits
|
(437 | ) | (361 | ) | (798 | ) | ||||||
Repurchase
agreement
|
(28 | ) | (30 | ) | (58 | ) | ||||||
Short-term
borrowings
|
(10 | ) | - | (10 | ) | |||||||
Long-term
debt
|
- | 1 | 1 | |||||||||
Total
Interest Expense
|
26 | (563 | ) | (537 | ) | |||||||
Net
Interest Income
|
$ | 711 | $ | (1,039 | ) | $ | (328 | ) |
March
31,
|
December
31,
|
|||||||||||||||
2009
|
2008
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(in
thousands, except for percentages)
|
||||||||||||||||
Commercial
and industrial
|
$ | 130,966 | 28.3% | $ | 120,404 | 26.8% | ||||||||||
Real
estate – construction
|
74,279 | 16.1% | 76,128 | 17.0% | ||||||||||||
Real
estate – commercial
|
174,832 | 37.8% | 177,650 | 39.6% | ||||||||||||
Real
estate – residential
|
25,084 | 5.4% | 19,860 | 4.4% | ||||||||||||
Consumer
|
57,532 | 12.4% | 54,890 | 12.2% | ||||||||||||
Other
|
56 | 0.0% | 119 | 0.0% | ||||||||||||
Unearned
fees
|
(283 | ) | (0.0)% | (271 | ) | (0.0)% | ||||||||||
Total
loans
|
$ | 462,466 | 100.0% | $ | 448,780 | 100.0% |
March
31,
|
December
31,
|
|||||||||||
2009
|
2008
|
2008
|
||||||||||
(in
thousands, except percentages)
|
||||||||||||
Balance
at beginning of year
|
$ | 6,815 | $ | 4,675 | $ | 4,675 | ||||||
Provision
charged to expense
|
150 | 85 | 2,301 | |||||||||
Loans
(charged off) recovered, net
|
(231 | ) | - | (161 | ) | |||||||
Balance
of allowance at end of period
|
$ | 6,734 | $ | 4,760 | $ | 6,815 | ||||||
Ratio
of net charge-offs to average
loans
outstanding
|
0.05 | % | 0.00 | % | 0.04 | % | ||||||
Balance
of allowance as a percent of
loans
at period-end
|
1.46 | % | 1.12 | % | 1.52 | % |
March
31,
2009
|
December
31,
2008
|
|||||||
(Dollars
in thousands)
|
||||||||
Commercial
lines of credit
|
$ | 57,464 | $ | 41,220 | ||||
One-to-four
family residential lines of credit
|
29,517 | 29,257 | ||||||
Commitments
to grant commercial and construction
loans
secured by real estate
|
30,910 | 32,092 | ||||||
Commercial
and financial letters of credit
|
9,584 | 8,651 | ||||||
$ | 127,475 | $ | 111,220 |
Tier
I
Capital
to
Average
Assets Ratio
(Leverage
Ratio)
|
Tier
I
Capital
to
Risk
Weighted
Assets
Ratio
|
Total
Capital to
Risk
Weighted
Assets
Ratio
|
|||||||||
March
31,
2009
|
Dec.
31,
2008
|
March
31,
2009
|
Dec.
31,
2008
|
March
31,
2009
|
Dec.
31,
2008
|
||||||
Community
Partners
|
9.94%
|
8.53%
|
11.39%
|
10.00%
|
12.64%
|
11.25%
|
|||||
Two
River
|
9.13%
|
8.38%
|
11.23%
|
9.80%
|
12.48%
|
11.05%
|
|||||
“Adequately
capitalized” institution (under Federal regulations)
|
4.00%
|
4.00%
|
4.00%
|
4.00%
|
8.00%
|
8.00%
|
|||||
“Well
capitalized” institution
(under
Federal regulations)
|
5.00%
|
5.00%
|
6.00%
|
6.00%
|
10.00%
|
10.00%
|
Item 6 . | Exhibits. | |||
10.1
|
*
|
#
|
First
Amendment to the Two River Community Bank Supplemental Executive
Retirement Agreement dated January 1, 2005 by and between Two River
Community Bank and Barry B. Davall, effective as of January 1,
2005
|
|
10.2
|
*
|
#
|
First
Amendment to Change in Control and Assumption Agreement dated June 1,
2007 (the “2007 Davall CIC Agreement”) by and between Community
Partners Bancorp, Two River Community Bank and Barry B. Davall,
made as of October 31, 2008
|
|
10.3
|
*
|
#
|
Continuation
of Benefits Agreement, made as of October 31, 2008, by and between
Community Partners Bancorp, Two River Community Bank and Barry B. Davall
related to the 2007 Davall CIC Agreement
|
|
10.4
|
*
|
#
|
First
Amendment to Change in Control Agreement dated December 14, 2004 (the
“2004 Davall CIC Agreement”) by and between Community Partners Bancorp,
Two River Community Bank and Barry B. Davall, made as of October 31,
2008
|
|
10.5
|
*
|
#
|
Continuation
of Benefits Agreement, made as of October 31, 2008, by and between
Community Partners Bancorp, Two River Community Bank and Barry B. Davall
related to the 2004 Davall CIC Agreement
|
|
10.6
|
*
|
#
|
First
Amendment to Excise Tax Reimbursement Agreement dated on and as of June 1,
2007 by and between Community Partners Bancorp and Barry B. Davall,
entered into as of October 31, 2008
|
|
10.7
|
*
|
#
|
First
Amendment to the Two River Community Bank Supplemental Executive
Retirement Agreement dated January 1, 2005 by and between Two River
Community Bank and Michael J. Gormley, effective as of January 1,
2005
|
10.8
|
*
|
#
|
First
Amendment to Change in Control and Assumption Agreement dated June 1,
2007 (the “2007 Gormley CIC Agreement”) by and between Community
Partners Bancorp, Two River Community Bank and Michael J. Gormley, made as
of October 30, 2008
|
|
10.9
|
*
|
#
|
Continuation
of Benefits Agreement, made as of October 30, 2008, by and between
Community Partners Bancorp, Two River Community Bank and Michael J.
Gormley related to the 2007 Gormley CIC Agreement
|
|
10.10
|
*
|
#
|
First
Amendment to Change in Control Agreement dated December 9, 2004 (the
“2004 Gormley CIC Agreement”) by and between Community Partners Bancorp,
Two River Community Bank and Michael J. Gormley, made as of October 30,
2008
|
|
10.11
|
*
|
#
|
Continuation
of Benefits Agreement, made as of October 30, 2008, by and between
Community Partners Bancorp, Two River Community Bank and Michael J.
Gormley related to the 2004 Gormley CIC Agreement
|
|
10.12
|
*
|
#
|
First
Amendment to Excise Tax Reimbursement Agreement dated on and as of June 1,
2007 by and between Community Partners Bancorp and Michael J. Gormley,
entered into as of October 30, 2008
|
|
10.13
|
*
|
#
|
First
Amendment to the Two River Community Bank Supplemental Executive
Retirement Agreement dated July 7, 2005 by and between Two River Community
Bank and William D. Moss, effective as of January 1,
2005
|
|
10.14
|
*
|
#
|
First
Amendment to Change in Control and Assumption Agreement dated June 1,
2007 (the “2007 Moss CIC Agreement”) by and between Community
Partners Bancorp, Two River Community Bank and William D. Moss, made as of
October 31, 2008
|
|
10.15
|
*
|
#
|
Continuation
of Benefits Agreement, made as of October 31, 2008, by and between
Community Partners Bancorp, Two River Community Bank and William D. Moss
related to the 2007 Moss CIC Agreement
|
|
10.16
|
*
|
#
|
First
Amendment to Change in Control Agreement dated December 27, 2004 (the
“2004 Moss CIC Agreement”) by and between Community Partners Bancorp, Two
River Community Bank and William D. Moss, made as of October 31,
2008
|
10.17
|
*
|
#
|
Continuation
of Benefits Agreement, made as of October 31, 2008, by and between
Community Partners Bancorp, Two River Community Bank and William D. Moss
related to the 2004 Moss CIC Agreement
|
|
10.18
|
*
|
#
|
First
Amendment to Excise Tax Reimbursement Agreement dated on and as of June 1,
2007 by and between Community Partners Bancorp and William D. Moss,
entered into as of October 31, 2008
|
|
10.19
|
*
|
#
|
First
Amendment to the Two River Community Bank Supplemental Executive
Retirement Agreement dated January 1, 2005 by and between Two River
Community Bank and Antha J. Stephens, effective as of January 1,
2005
|
|
10.20
|
*
|
#
|
First
Amendment to the Two River Community Bank Supplemental Executive
Retirement Agreement dated January 1, 2005 by and between Two River
Community Bank and Alan B. Turner, effective as of January 1,
2005
|
|
10.21
|
Letter
Agreement, dated January 30, 2009, including Securities Purchase Agreement
– Standard Terms incorporated by reference therein, between the Registrant
and the United States Department of the Treasury, with respect to the
issuance and sale of the Senior Preferred Stock and the Warrant
(incorporated by reference to Exhibit 10.1 to the Registrant’s Current
Report on Form 8-K filed with the SEC on January 30,
2009)
|
|||
10.22
|
#
|
Form
of Waiver, executed by each of Messrs. Barry B. Davall, Michael J. Gormley
and William D. Moss (incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K filed with the SEC on January 30,
2009)
|
||
10.23
|
#
|
Form
of Senior Executive Officer Agreement, executed by each of Messrs. Barry
B. Davall, Michael J. Gormley and William D. Moss (incorporated by
reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K
filed with the SEC on January 30, 2009)
|
||
31.1
|
*
|
Certification
of Charles T. Parton, interim president and principal executive officer of
the Company, pursuant to Securities Exchange Act Rule
13a-14(a)
|
||
31.2
|
*
|
Certification
of Michael J. Gormley, principal financial officer of the Company,
pursuant to Securities Exchange Act Rule 13a-14(a)
|
||
32
|
*
|
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
The Sarbanes-Oxley Act of 2002, signed by Charles T. Parton, interim
president and principal executive officer of the Company, and Michael J.
Gormley, principal financial officer of the Company
|
||
COMMUNITY PARTNERS BANCORP | |||
Date:
May 15, 2009
|
By:
|
/s/ CHARLES T. PARTON | |
Charles T. Parton | |||
Interim President and Chief Executive Officer | |||
(Principal Executive Officer) |
Date:
May 15, 2009
|
By:
|
/s/ MICHAEL J. GORMLEY | |
Michael J. Gormley | |||
Executive
Vice President, Chief Operating Officer
and
Chief Financial Officer
|
|||
(Principal Financial Officer) |
1.0
|
“Bank”
means,
for all purposes of this Agreement, Two River Community Bank and all of
those entities (including, as of the date of this Amendment, Community
Partners Bancorp and The Town Bank) which are within the same controlled
group of corporations within the meaning of Section 1563(a) of the Code as
is Two River Community Bank and which are, with Two River Community Bank,
deemed to be a single employer by the application of Section 414(b) of the
Code, all of which entities (including Two River Community Bank) shall be
conclusively deemed for all purposes of the Agreement to be a single
entity and a single recipient of the services provided by the Executive to
any such entity, or any combination of such
entities.
|
1.13
|
“Separation
from Service
” means the
termination of the Executive’s
employment
with
the Bank under circumstances which meet the standards set forth in this
Section 1.13, for reasons other than death.
Whether a Separation
from Service takes place shall be determined in accordance with the
applicable provisions of Code Section 409A and all related United States
Department of the Treasury guidance or Regulations, and shall be based
upon whether the facts and circumstances surrounding the termination of
the Executive’s employment indicate that the Bank and the Executive
reasonably anticipate that the Executive either
(i) will
provide no significant
services in any capacity for the Bank or any affiliate following such
termination, or
(ii)
will, as an employee or
independent contractor, provide services to the Bank or any
affiliate of the Bank
following such
termination of employment
at an annual rate which
is not more than twenty percent (20%) of the services rendered, on
average, during the immediately preceding thirty six (36) full calendar
months (
or the full period
for which the Executive provided services to the Bank (whether as an
employee or as an independent contractor) if the Executive has, at the
time of the termination of the Executive’s employment, been providing
services for a period of less than thirty six (36) months
).
|
1.13a
|
“
Specified
Employee
” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as conclusively determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification period.
|
2.1
|
Normal Retirement
Benefit
. Upon Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this
Article.
|
2.1.2
|
Distribution of
Benefit
. The Bank shall distribute the annual benefit to
the Executive in twelve (12) equal monthly installments commencing on the
first day of the month following the Executive’s sixty-seventh (67
th
)
birthday. The annual benefit shall be distributed for fifteen
(15) years.
|
2.3
|
Disability
Benefit
.
Upon
Disability prior to Normal Retirement Age, the Bank shall distribute to
the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.
|
2.3.1
|
Amount
of Benefit
.
The
benefit under this Section 2.3 is the Disability benefit set forth on
Schedule A for the Plan Year that ended immediately prior to the date on
which Disability occurs.
|
2.4.3
|
Parachute
Payments
. The Bank and the Executive (i) acknowledge
that a separate Excise Tax Reimbursement Agreement pertaining to Section
280G of the Code and the excise tax imposed on excess parachute payments
under Section 4999 of the Code has been executed by the Bank and the
Executive, the terms of which are applicable to all compensation payments,
including the compensation payments made under this Agreement, which may
be subject to Section 280G of the Internal Revenue Code of 1986, and (ii)
acknowledge their respective intentions to fully abide by the terms of the
Excise Tax Reimbursement Agreement.
|
2.5
|
Restriction on Timing
of Distributions
. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Separation from Service, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner
specified.
|
2.6
|
Distributions Upon
Income Inclusion Under Section 409A of the Code
. If any
amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the amount the Bank has accrued with respect to the Bank’s
obligations hereunder
that is required
to be included in the Executive’s income. Upon the grant of
such a petition, which grant shall not be unreasonably withheld, the Bank
shall distribute to the Executive immediately available funds in an amount
equal to the portion of the amount the Bank has accrued with respect to
the Bank’s obligations hereunder required to be included in income as a
result of the failure of this Agreement to meet the requirements of Code
Section 409A and related Treasury guidance or Regulations, which amount
shall not exceed the Executive's unpaid amount the Bank has accrued with
respect to the Bank’s obligations hereunder. If the petition is
granted, such distribution shall be made within ninety (90) days of the
date when the Executive's petition is granted. Such a
distribution shall affect and reduce the Executive’s benefits to be paid
under this Agreement.
|
2.7
|
Change in Form or
Timing of Distributions
. All changes in the form or
timing of distributions hereunder must comply with the following
requirements. The
changes:
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Sections 2.1 and 2.3, be made at least
twelve (12) months prior to the first scheduled
distribution;
|
|
(c)
|
must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be
made;
and
|
|
(d)
|
must
take effect not less than twelve (12) months after the election is
made.
|
8.1
|
Amendments
. This
Agreement may be amended only by a written agreement signed for Two River
Community Bank and the Executive. However, Two River Community
Bank may unilaterally amend this Agreement to conform with written
directives to the Bank from its counsel, auditors or banking regulators,
or to comply with legislative changes or tax law, including without
limitation Section 409A of the Code and any and all Treasury regulations
and guidance promulgated
thereunder.
|
8.2
|
Plan Termination
Generally
. This Agreement may be terminated only by a
written agreement signed for Two River Community
Bank and by the Executive. The benefit hereunder shall be the
amount that Two River Community Bank has accrued with respect to Two River
Community Bank’s obligations hereunder as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
|
8.3
|
Plan Terminations
Under Section 409A
. Notwithstanding anything to the
contrary in Section 8.2, if this Agreement terminates in the following
circumstances:
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that
all the Bank's arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the
arrangements;
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
(c)
|
Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
|
9.10
|
Compliance with Code
Section 409A
. This Agreement shall be interpreted and
administered in a manner consistent with Code Section
409A.
|
EXECUTIVE: | TWO RIVER COMMUNITY BANK | |||
/s/Barry B. Davall |
|
By
|
/s/ Charles T. Parton | |
Barry B. Davall | Title | Chairman | ||
/s/ Jean Nelson-Crosby | /s/Barry B. Davall | |||
|
Barry B. Davall, individually | |||
ATTEST: | COMMUNITY PARTNERS BANCORP | |||
/s/Michael W. Kostelnik | By: | /s/Charles T. Parton | ||
Michael W. Kostelnik, Secretary | Charles T. Parton, Chairman | |||
ATTEST: | TWO RIVER COMMUNITY BANK | |||
/s/Michael W. Kostelnik | By: | /s/William D. Moss | ||
Michael W. Kostelnik, Secretary | William D. Moss, President | |||
/s/ Jean Nelson-Crosby | /s/Barry B. Davall | |||
|
Barry B. Davall, individually | |||
ATTEST: | COMMUNITY PARTNERS BANCORP | |||
/s/Michael W. Kostelnik | By: | /s/Charles T. Parton | ||
Michael W. Kostelnik, Secretary | Charles T. Parton, Chairman | |||
ATTEST: | TWO RIVER COMMUNITY BANK | |||
/s/Michael W. Kostelnik | By: | /s/William D. Moss | ||
Michael W. Kostelnik, Secretary | William D. Moss, President | |||
/s/ Jean Nelson-Crosby | /s/Barry B. Davall | |||
|
|
Barry B. Davall, individually | ||
ATTEST: | COMMUNITY PARTNERS BANCORP | |||
/s/Michael W. Kostelnik | By: | /s/Charles T. Parton | ||
Michael W. Kostelnik, Secretary | Charles T. Parton, Chairman | |||
ATTEST: | TWO RIVER COMMUNITY BANK | |||
/s/Michael W. Kostelnik | By: | /s/William D. Moss | ||
Michael W. Kostelnik, Secretary | William D. Moss, President | |||
WITNESS:
|
||||
/s/
Jean Nelson-Crosby
|
/s/Barry B. Davall | |||
Barry B. Davall, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/William
D. Moss
|
||
Michael
W. Kostelnik, Secretary
|
William
D. Moss, President
|
/s/ Jean Nelson-Crosby | /s/Barry B. Davall | |||
|
|
Barry B. Davall | ||
ATTEST: | COMMUNITY PARTNERS BANCORP | |||
/s/Michael W. Kostelnik | By: | /s/Charles T. Parton | ||
Michael W. Kostelnik, Secretary | Charles T. Parton, Chairman | |||
Joinder: | ||||
ATTEST: | TWO RIVER COMMUNITY BANK | |||
/s/Michael W. Kostelnik | By: | /s/William D. Moss | ||
Michael W. Kostelnik, Secretary | William D. Moss, President | |||
1.0
|
“Bank”
means, for all purposes of this Agreement, Two River Community Bank and
all of those entities (including, as of the date of this Amendment,
Community Partners Bancorp and The Town Bank) which are within the same
controlled group of corporations within the meaning of Section 1563(a) of
the Code as is Two River Community Bank and which are, with Two River
Community Bank, deemed to be a single employer by the application of
Section 414(b) of the Code, all of which entities (including Two River
Community Bank) shall be conclusively deemed for all purposes of the
Agreement to be a single entity and a single recipient of the services
provided by the Executive to any such entity, or any combination of such
entities.
|
1.13
|
“Separation
from Service
”
means the termination of the Executive’s
employment
with
the Bank under circumstances which meet the standards set forth in this
Section 1.13, for reasons other than death.
Whether
a Separation from Service takes place shall be determined in accordance
with the applicable provisions of Code Section 409A and all related United
States Department of the Treasury guidance or Regulations, and shall be
based upon whether the facts and circumstances surrounding the termination
of the Executive’s employment indicate that the Bank and the Executive
reasonably anticipate that the Executive either
(i)
will
provide
no significant services in any capacity for the Bank or any affiliate
following such termination, or
(ii)
will,
as an employee or independent contractor, provide services to
the Bank or any affiliate of the Bank
following
such termination of employment
at
an annual rate which is not more than twenty percent (20%) of the services
rendered, on average, during the immediately preceding thirty six (36)
full calendar months (
or
the full period for which the Executive provided services to the Bank
(whether as an employee or as an independent contractor) if the Executive
has, at the time of the termination of the Executive’s employment, been
providing services for a period of less than thirty six (36)
months
).
|
1.13a
|
“
Specified
Employee
” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as conclusively determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification period.
|
2.1
|
Normal
Retirement Benefit.
Upon Normal Retirement Age, the Bank
shall distribute to the Executive the benefit described in this Section
2.1 in lieu of any other benefit under this
Article.
|
2.1.2
|
Distribution
of Benefit
. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on
the first day of the month following the Executive’s sixty-fifth (65
th
)
birthday. The annual benefit shall be distributed for fifteen
(15)
years.
|
2.3
|
Disability
Benefit
.
Upon
Disability prior to Normal Retirement Age, the Bank shall distribute to
the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this
Article.
|
2.3.1
|
Amount
of Benefit
.
The
benefit under this Section 2.3 is the Disability benefit set forth on
Schedule A for the Plan Year that ended immediately prior to the date on
which Disability
occurs.
|
2.4.3
|
Parachute
Payments
. The Bank and the Executive (i) acknowledge
that a separate Excise Tax Reimbursement Agreement pertaining to Section
280G of the Code and the excise tax imposed on excess parachute payments
under Section 4999 of the Code has been executed by the Bank and the
Executive, the terms of which are applicable to all compensation payments,
including the compensation payments made under this Agreement, which may
be subject to Section 280G of the Internal Revenue Code of 1986, and (ii)
acknowledge their respective intentions to fully abide by the terms of the
Excise Tax Reimbursement
Agreement.
|
2.5
|
Restriction
on Timing of Distributions
. Notwithstanding any provision of
this Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Separation from Service, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner
specified.
|
2.6
|
Distributions
Upon Income Inclusion Under Section 409A of the Code
. If
any amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the amount the Bank has accrued with respect to the Bank’s
obligations hereunder
that
is required to be included in the Executive’s income. Upon the
grant of such a petition, which grant shall not be unreasonably withheld,
the Bank shall distribute to the Executive immediately available funds in
an amount equal to the portion of the amount the Bank has accrued with
respect to the Bank’s obligations hereunder required to be included in
income as a result of the failure of this Agreement to meet the
requirements of Code Section 409A and related Treasury guidance or
Regulations, which amount shall not exceed the Executive's unpaid amount
the Bank has accrued with respect to the Bank’s obligations
hereunder. If the petition is granted, such distribution shall
be made within ninety (90) days of the date when the Executive's petition
is granted. Such a distribution shall affect and reduce the
Executive’s benefits to be paid under this
Agreement.
|
2.7
|
Change
in Form or Timing of Distributions
. All changes in the
form or timing of distributions hereunder must comply with the following
requirements. The
changes:
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
(b)
|
must,
for benefits distributable under Sections 2.1 and 2.3, be made at least
twelve (12) months prior to the first scheduled
distribution;
|
(c)
|
must, for benefits
distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the commencement
of distributions for a minimum of five (5) years from the date the first
distribution was originally scheduled to be made;
and
|
(d)
|
must
take effect not less than twelve (12) months after the election is
made.
|
8.1
|
Amendments
. This
Agreement may be amended only by a written agreement signed for Two River
Community Bank and the Executive. However, Two River Community
Bank may unilaterally amend this Agreement to conform with written
directives to the Bank from its counsel, auditors or banking regulators,
or to comply with legislative changes or tax law, including without
limitation Section 409A of the Code and any and all Treasury regulations
and guidance promulgated
thereunder.
|
8.2
|
Plan
Termination Generally
. This Agreement may be terminated
only by a written agreement signed for Two River
Community Bank and by the Executive. The benefit hereunder
shall be the amount that Two River Community Bank has accrued with respect
to Two River Community Bank’s obligations hereunder as of the date the
Agreement is terminated. Except as provided in Section 8.3, the
termination of this Agreement shall not cause a distribution of benefits
under this Agreement. Rather, after such termination benefit
distributions will be made at the earliest distribution event permitted
under Article 2 or Article
3.
|
8.3
|
Plan
Terminations Under Section 409A
. Notwithstanding
anything to the contrary in Section 8.2, if this Agreement terminates in
the following
circumstances:
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that
all the Bank's arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the
arrangements;
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
(c)
|
Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
|
|
then
Two River Community Bank may distribute the amount that Two River
Community Bank has accrued with respect to its obligations hereunder,
determined as of the date of the termination of the Agreement, to the
Executive in a lump sum subject to the above
terms.
|
9.10
|
Compliance
with Code Section 409A
. This Agreement shall be
interpreted and administered in a manner consistent with Code Section
409A.
|
EXECUTIVE: | TWO RIVER COMMUNITY BANK | |||
/s/ Michael J. Gormley |
|
By
|
/s/ Charles T. Parton | |
Michael J. Gormley | Title | Chairman | ||
ATTEST: | ||||
/s/Linda Austin
|
||||
/s/Linda Austin | /s/Michael J. Gormley | |||
|
Michael J. Gormley, individually | |||
ATTEST: | COMMUNITY PARTNERS BANCORP | |||
/s/Michael W. Kostelnik | By: | /s/Charles T. Parton | ||
Michael W. Kostelnik, Secretary | Charles T. Parton, Chairman | |||
ATTEST: | TWO RIVER COMMUNITY BANK | |||
/s/Michael W. Kostelnik | By: | /s/William D. Moss | ||
Michael W. Kostelnik, Secretary | William D. Moss, President | |||
WITNESS:
|
||||
/s/
Linda Austin
|
/s/Michael J. Gormley | |||
Michael J. Gormley, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/William
D. Moss
|
||
Michael
W. Kostelnik, Secretary
|
William
D. Moss, President
|
WITNESS:
|
||||
/s/Linda
Austin
|
/s/Michael J. Gormley | |||
Michael J. Gormley, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/William
D. Moss
|
||
Michael
W. Kostelnik, Secretary
|
William
D. Moss, President
|
WITNESS:
|
||||
/s/Linda
Austin
|
/s/Michael J. Gormley | |||
Michael J. Gormley, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/William
D. Moss
|
||
Michael
W. Kostelnik, Secretary
|
William
D. Moss, President
|
WITNESS:
|
||||
/s/Linda
Austin
|
/s/Michael J. Gormley | |||
Michael J. Gormley, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
Joinder:
|
||||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/William
D. Moss
|
||
Michael
W. Kostelnik, Secretary
|
William
D. Moss, President
|
1.0
|
“Bank”
means,
for all purposes of this Agreement, Two River Community Bank and all of
those entities (including, as of the date of this Amendment, Community
Partners Bancorp and The Town Bank) which are within the same controlled
group of corporations within the meaning of Section 1563(a) of the Code as
is Two River Community Bank and which are, with Two River Community Bank,
deemed to be a single employer by the application of Section 414(b) of the
Code, all of which entities (including Two River Community Bank) shall be
conclusively deemed for all purposes of the Agreement to be a single
entity and a single recipient of the services provided by the Executive to
any such entity, or any combination of such
entities.
|
1.13
|
“Separation
from Service
” means the
termination of the Executive’s
employment
with
the Bank under circumstances which meet the standards set forth in this
Section 1.13, for reasons other than death.
Whether a Separation
from Service takes place shall be determined in accordance with the
applicable provisions of Code Section 409A and all related United States
Department of the Treasury guidance or Regulations, and shall be based
upon whether the facts and circumstances surrounding the termination of
the Executive’s employment indicate that the Bank and the Executive
reasonably anticipate that the Executive either
(i) will
provide no significant
services in any capacity for the Bank or any affiliate following such
termination, or
(ii)
will, as an employee or
independent contractor, provide services to the Bank or any
affiliate of the Bank
following such
termination of employment
at an annual rate which
is not more than twenty percent (20%) of the services rendered, on
average, during the immediately preceding thirty six (36) full calendar
months (
or the full period
for which the Executive provided services to the Bank (whether as an
employee or as an independent contractor) if the Executive has, at the
time of the termination of the Executive’s employment, been providing
services for a period of less than thirty six (36) months
).
|
1.13a
|
“
Specified
Employee
” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as conclusively determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification period.
|
2.1
|
Normal Retirement
Benefit
. Upon Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this
Article.
|
2.1.2
|
Distribution of
Benefit
. The Bank shall distribute the annual benefit to
the Executive in twelve (12) equal monthly installments commencing on the
first day of the month following the Executive’s sixty-fifth (65
th
)
birthday. The annual benefit shall be distributed for fifteen
(15) years.
|
2.3
|
Disability
Benefit
.
Upon
Disability prior to Normal Retirement Age, the Bank shall distribute to
the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.
|
2.3.1
|
Amount
of Benefit
.
The
benefit under this Section 2.3 is the Disability benefit set forth on
Schedule A for the Plan Year that ended immediately prior to the date on
which Disability occurs.
|
2.4.3
|
Parachute
Payments
. The Bank and the Executive (i) acknowledge
that a separate Excise Tax Reimbursement Agreement pertaining to Section
280G of the Code and the excise tax imposed on excess parachute payments
under Section 4999 of the Code has been executed by the Bank and the
Executive, the terms of which are applicable to all compensation payments,
including the compensation payments made under this Agreement, which may
be subject to Section 280G of the Internal Revenue Code of 1986, and (ii)
acknowledge their respective intentions to fully abide by the terms of the
Excise Tax Reimbursement Agreement.
|
2.5
|
Restriction on Timing
of Distributions
. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Separation from Service, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner
specified.
|
2.6
|
Distributions Upon
Income Inclusion Under Section 409A of the Code
. If any
amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the amount the Bank has accrued with respect to the Bank’s
obligations hereunder
that is required
to be included in the Executive’s income. Upon the grant of
such a petition, which grant shall not be unreasonably withheld, the Bank
shall distribute to the Executive immediately available funds in an amount
equal to the portion of the amount the Bank has accrued with respect to
the Bank’s obligations hereunder required to be included in income as a
result of the failure of this Agreement to meet the requirements of Code
Section 409A and related Treasury guidance or Regulations, which amount
shall not exceed the Executive's unpaid amount the Bank has accrued with
respect to the Bank’s obligations hereunder. If the petition is
granted, such distribution shall be made within ninety (90) days of the
date when the Executive's petition is granted. Such a
distribution shall affect and reduce the Executive’s benefits to be paid
under this Agreement.
|
2.7
|
Change in Form or
Timing of Distributions
. All changes in the form or
timing of distributions hereunder must comply with the following
requirements. The
changes:
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Sections 2.1 and 2.3, be made at least
twelve (12) months prior to the first scheduled
distribution;
|
|
(c)
|
must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be
made;
and
|
|
(d)
|
must
take effect not less than twelve (12) months after the election is
made.
|
8.1
|
Amendments
. This
Agreement may be amended only by a written agreement signed for Two River
Community Bank and the Executive. However, Two River Community
Bank may unilaterally amend this Agreement to conform with written
directives to the Bank from its counsel, auditors or banking regulators,
or to comply with legislative changes or tax law, including without
limitation Section 409A of the Code and any and all Treasury regulations
and guidance promulgated
thereunder.
|
8.2
|
Plan Termination
Generally
. This Agreement may be terminated only by a
written agreement signed for Two River Community
Bank and by the Executive. The benefit hereunder shall be the
amount that Two River Community Bank has accrued with respect to Two River
Community Bank’s obligations hereunder as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
|
8.3
|
Plan Terminations
Under Section 409A
. Notwithstanding anything to the
contrary in Section 8.2, if this Agreement terminates in the following
circumstances:
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that
all the Bank's arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the
arrangements;
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
(c)
|
Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
|
9.10
|
Compliance with Code
Section 409A
. This Agreement shall be interpreted and
administered in a manner consistent with Code Section
409A.
|
EXECUTIVE: | TWO RIVER COMMUNITY BANK | |||
/s/
William D. Moss
|
By |
/s/
Charles T. Parton
|
||
William D. Moss | Title |
Chairman
|
||
|
|
WITNESS:
|
||||
/s/
Jean
Nelson-Crosby
|
/s/William D. Moss | |||
William
D. Moss, individually
|
||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Michael
J. Gormley
|
||
Michael
W. Kostelnik, Secretary
|
Michael
J. Gormley,
|
|||
Executive
Vice President
|
WITNESS:
|
||||
/s/
Jean
Nelson-Crosby
|
/s/William D. Moss | |||
William
D. Moss, individually
|
||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Michael
J. Gormley
|
||
Michael
W. Kostelnik, Secretary
|
Michael
J. Gormley
|
|||
Executive
Vice President
|
WITNESS:
|
||||
/s/
Jean Nelson-Crosby
|
/s/William D. Moss | |||
William D. Moss, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/
Michael J.
Gormley
|
||
Michael
W. Kostelnik, Secretary
|
Michael
J. Gormley
|
|||
Executive
Vic President
|
WITNESS:
|
||||
/s/
Jean Nelson-Crosby
|
/s/William D. Moss | |||
William D. Moss, individually | ||||
ATTEST:
|
COMMUNITY
PARTNERS BANCORP
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/Charles
T. Parton
|
||
Michael
W. Kostelnik, Secretary
|
Charles
T. Parton, Chairman
|
|||
ATTEST:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Michael
W. Kostelnik
|
By:
|
/s/
Michael J.
Gormley
|
||
Michael
W. Kostelnik, Secretary
|
Michael
J. Gormley
|
|||
Executive
Vice
President
|
/s/ Jean Nelson-Crosby | /s/William D. Moss | |||
|
|
William D. Moss | ||
ATTEST: | COMMUNITY PARTNERS BANCORP | |||
/s/Michael W. Kostelnik | By: | /s/Charles T. Parton | ||
Michael W. Kostelnik, Secretary | Charles T. Parton, Chairman | |||
Joinder: | ||||
ATTEST: | TWO RIVER COMMUNITY BANK | |||
/s/Michael W. Kostelnik | By: | /s/Michael J. Gormley | ||
Michael W. Kostelnik, Secretary | Michael J. Gormley, | |||
Executive
Vice President
|
1.0
|
“Bank”
means,
for all purposes of this Agreement, Two River Community Bank and all of
those entities (including, as of the date of this Amendment, Community
Partners Bancorp and The Town Bank) which are within the same controlled
group of corporations within the meaning of Section 1563(a) of the Code as
is Two River Community Bank and which are, with Two River Community Bank,
deemed to be a single employer by the application of Section 414(b) of the
Code, all of which entities (including Two River Community Bank) shall be
conclusively deemed for all purposes of the Agreement to be a single
entity and a single recipient of the services provided by the Executive to
any such entity, or any combination of such
entities.
|
1.13
|
“Separation
from Service
” means the
termination of the Executive’s
employment
with
the Bank under circumstances which meet the standards set forth in this
Section 1.13, for reasons other than death.
Whether a Separation
from Service takes place shall be determined in accordance with the
applicable provisions of Code Section 409A and all related United States
Department of the Treasury guidance or Regulations, and shall be based
upon whether the facts and circumstances surrounding the termination of
the Executive’s employment indicate that the Bank and the Executive
reasonably anticipate that the Executive either
(i) will
provide no significant
services in any capacity for the Bank or any affiliate following such
termination, or
(ii)
will, as an employee or
independent contractor, provide services to the Bank or any
affiliate of the Bank
following such
termination of employment
at an annual rate which
is not more than twenty percent (20%) of the services rendered, on
average, during the immediately preceding thirty six (36) full calendar
months (
or the full period
for which the Executive provided services to the Bank (whether as an
employee or as an independent contractor) if the Executive has, at the
time of the termination of the Executive’s employment, been providing
services for a period of less than thirty six (36) months
).
|
1.13a
|
“
Specified
Employee
” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as conclusively determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification period.
|
2.1
|
Normal Retirement
Benefit
. Upon Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this
Article.
|
2.1.2
|
Distribution of
Benefit
. The Bank shall distribute the annual benefit to
the Executive in twelve (12) equal monthly installments commencing on the
first day of the month following the Executive’s sixty-fifth (65
th
)
birthday. The annual benefit shall be distributed for fifteen
(15) years.
|
2.3
|
Disability
Benefit
.
Upon
Disability prior to Normal Retirement Age, the Bank shall distribute to
the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.
|
2.3.1
|
Amount
of Benefit
.
The
benefit under this Section 2.3 is the Disability benefit set forth on
Schedule A for the Plan Year that ended immediately prior to the date on
which Disability occurs.
|
2.4.3
|
Parachute
Payments
. The Bank and the Executive (i) acknowledge
that a separate Excise Tax Reimbursement Agreement pertaining to Section
280G of the Code and the excise tax imposed on excess parachute payments
under Section 4999 of the Code has been executed by the Bank and the
Executive, the terms of which are applicable to all compensation payments,
including the compensation payments made under this Agreement, which may
be subject to Section 280G of the Internal Revenue Code of 1986, and (ii)
acknowledge their respective intentions to fully abide by the terms of the
Excise Tax Reimbursement Agreement.
|
2.5
|
Restriction on Timing
of Distributions
. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Separation from Service, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner
specified.
|
2.6
|
Distributions Upon
Income Inclusion Under Section 409A of the Code
. If any
amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the amount the Bank has accrued with respect to the Bank’s
obligations hereunder
that is required
to be included in the Executive’s income. Upon the grant of
such a petition, which grant shall not be unreasonably withheld, the Bank
shall distribute to the Executive immediately available funds in an amount
equal to the portion of the amount the Bank has accrued with respect to
the Bank’s obligations hereunder required to be included in income as a
result of the failure of this Agreement to meet the requirements of Code
Section 409A and related Treasury guidance or Regulations, which amount
shall not exceed the Executive's unpaid amount the Bank has accrued with
respect to the Bank’s obligations hereunder. If the petition is
granted, such distribution shall be made within ninety (90) days of the
date when the Executive's petition is granted. Such a
distribution shall affect and reduce the Executive’s benefits to be paid
under this Agreement.
|
2.7
|
Change in Form or
Timing of Distributions
. All changes in the form or
timing of distributions hereunder must comply with the following
requirements. The
changes:
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Sections 2.1 and 2.3, be made at least
twelve (12) months prior to the first scheduled
distribution;
|
|
(c)
|
must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be
made;
and
|
|
(d)
|
must
take effect not less than twelve (12) months after the election is
made.
|
8.1
|
Amendments
. This
Agreement may be amended only by a written agreement signed for Two River
Community Bank and the Executive. However, Two River Community
Bank may unilaterally amend this Agreement to conform with written
directives to the Bank from its counsel, auditors or banking regulators,
or to comply with legislative changes or tax law, including without
limitation Section 409A of the Code and any and all Treasury regulations
and guidance promulgated
thereunder.
|
8.2
|
Plan Termination
Generally
. This Agreement may be terminated only by a
written agreement signed for Two River Community
Bank and by the Executive. The benefit hereunder shall be the
amount that Two River Community Bank has accrued with respect to Two River
Community Bank’s obligations hereunder as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
|
8.3
|
Plan Terminations
Under Section 409A
. Notwithstanding anything to the
contrary in Section 8.2, if this Agreement terminates in the following
circumstances:
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that
all the Bank's arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the
arrangements;
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
(c)
|
Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
|
9.10
|
Compliance with Code
Section 409A
. This Agreement shall be interpreted and
administered in a manner consistent with Code Section
409A.
|
EXECUTIVE: | TWO RIVER COMMUNITY BANK | |||
/s/ Antha J. Stephens |
|
By
|
/s/ William D. Moss | |
Antha J. Stephens | Title | President & CEO | ||
1.0
|
“Bank”
means,
for all purposes of this Agreement, Two River Community Bank and all of
those entities (including, as of the date of this Amendment, Community
Partners Bancorp and The Town Bank) which are within the same controlled
group of corporations within the meaning of Section 1563(a) of the Code as
is Two River Community Bank and which are, with Two River Community Bank,
deemed to be a single employer by the application of Section 414(b) of the
Code, all of which entities (including Two River Community Bank) shall be
conclusively deemed for all purposes of the Agreement to be a single
entity and a single recipient of the services provided by the Executive to
any such entity, or any combination of such
entities.
|
|
|
1.13
“Separation
from Service
” means the
termination of the Executive’s
employment
with
the Bank under circumstances which meet the standards set forth in this
Section 1.13, for reasons other than death.
Whether a Separation
from Service takes place shall be determined in accordance with the
applicable provisions of Code Section 409A and all related United States
Department of the Treasury guidance or Regulations, and shall be based
upon whether the facts and circumstances surrounding the termination of
the Executive’s employment indicate that the Bank and the Executive
reasonably anticipate that the Executive either
(i) will
provide no significant
services in any capacity for the Bank or any affiliate following such
termination, or
(ii)
will, as an employee or
independent contractor, provide services to the Bank or any
affiliate of the Bank
following such
termination of employment
at an annual rate which
is not more than twenty percent (20%) of the services rendered, on
average, during the immediately preceding thirty six (36) full calendar
months (
or the full period
for which the Executive provided services to the Bank (whether as an
employee or as an independent contractor) if the Executive has, at the
time of the termination of the Executive’s employment, been providing
services for a period of less than thirty six (36) months
).
|
|
The
Executive’s
employment
relationship will be treated as continuing intact while the
Executive
is on military leave,
sick leave, or other bona fide leave of absence if the period of such
leave of absence does not exceed six (6) months, or if longer,
for
so long as
the
Executive’s
right to reemployment
with the
Bank
is provided either by
statute or by contract. If the period of leave exceeds six (6)
months and there is no right to reemployment, a
Separation from
Service
will be deemed to have occurred as of the first da
y
immediately following
such six (6) month period.
|
1.13a
|
“
Specified
Employee
” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as conclusively determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification period.
|
2.1
|
Normal Retirement
Benefit
. Upon Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this
Article.
|
2.1.2
|
Distribution of
Benefit
. The Bank shall distribute the annual benefit to
the Executive in twelve (12) equal monthly installments commencing on the
first day of the month following the Executive’s sixty-fifth (65
th
)
birthday. The annual benefit shall be distributed for fifteen
(15) years.
|
2.3
|
Disability
Benefit
.
Upon
Disability prior to Normal Retirement Age, the Bank shall distribute to
the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.
|
2.3.1
|
Amount
of Benefit
.
The
benefit under this Section 2.3 is the Disability benefit set forth on
Schedule A for the Plan Year that ended immediately prior to the date on
which Disability occurs.
|
2.4.3
|
Parachute
Payments
. The Bank and the Executive (i) acknowledge
that a separate Excise Tax Reimbursement Agreement pertaining to Section
280G of the Code and the excise tax imposed on excess parachute payments
under Section 4999 of the Code has been executed by the Bank and the
Executive, the terms of which are applicable to all compensation payments,
including the compensation payments made under this Agreement, which may
be subject to Section 280G of the Internal Revenue Code of 1986, and (ii)
acknowledge their respective intentions to fully abide by the terms of the
Excise Tax Reimbursement Agreement.
|
2.5
|
Restriction on Timing
of Distributions
. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Separation from Service, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner
specified.
|
2.6
|
Distributions Upon
Income Inclusion Under Section 409A of the Code
. If any
amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the amount the Bank has accrued with respect to the Bank’s
obligations hereunder
that is required
to be included in the Executive’s income. Upon the grant of
such a petition, which grant shall not be unreasonably withheld, the Bank
shall distribute to the Executive immediately available funds in an amount
equal to the portion of the amount the Bank has accrued with respect to
the Bank’s obligations hereunder required to be included in income as a
result of the failure of this Agreement to meet the requirements of Code
Section 409A and related Treasury guidance or Regulations, which amount
shall not exceed the Executive's unpaid amount the Bank has accrued with
respect to the Bank’s obligations hereunder. If the petition is
granted, such distribution shall be made within ninety (90) days of the
date when the Executive's petition is granted. Such a
distribution shall affect and reduce the Executive’s benefits to be paid
under this Agreement.
|
2.7
|
Change in Form or
Timing of Distributions
. All changes in the form or
timing of distributions hereunder must comply with the following
requirements. The
changes:
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Sections 2.1 and 2.3, be made at least
twelve (12) months prior to the first scheduled
distribution;
|
|
(c)
|
must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be
made;
and
|
|
(d)
|
must
take effect not less than twelve (12) months after the election is
made.
|
8.1
|
Amendments
. This
Agreement may be amended only by a written agreement signed for Two River
Community Bank and the Executive. However, Two River Community
Bank may unilaterally amend this Agreement to conform with written
directives to the Bank from its counsel, auditors or banking regulators,
or to comply with legislative changes or tax law, including without
limitation Section 409A of the Code and any and all Treasury regulations
and guidance promulgated
thereunder.
|
8.2
|
Plan Termination
Generally
. This Agreement may be terminated only by a
written agreement signed for Two River Community
Bank and by the Executive. The benefit hereunder shall be the
amount that Two River Community Bank has accrued with respect to Two River
Community Bank’s obligations hereunder as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
|
8.3
|
Plan Terminations
Under Section 409A
. Notwithstanding anything to the
contrary in Section 8.2, if this Agreement terminates in the following
circumstances:
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that
all the Bank's arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the
arrangements;
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
(c)
|
Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
|
9.10
|
Compliance with Code
Section 409A
. This Agreement shall be interpreted and
administered in a manner consistent with Code Section
409A.
|
EXECUTIVE:
|
TWO
RIVER COMMUNITY BANK
|
|||
/s/Alan
B. Turner
|
By
|
/s/Charles
T. Parton
|
||
Alan
B. Turner
|
Title |
Chairman
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Community Partners
Bancorp;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
/s/ CHARLES T. PARTON
|
|
Name:
|
Charles
T. Parton
|
Title:
|
Interim
President and Chief Executive
Officer
|
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Community Partners
Bancorp;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
/s/ MICHAEL J. GORMLEY
|
|
Name:
|
Michael
J. Gormley
|
Title:
|
Executive
Vice President, Chief Operating Officer
|
and
Chief Financial Officer (Principal Financial
Officer
|
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, thefinancial condition and results of operations of the Company. |
/s/ CHARLES T. PARTON
|
|
Name:
|
Charles
T. Parton
|
Title:
|
Interim
President and Chief Executive Officer
|
Date:
|
May
15, 2009
|
/s/ MICHAEL J. GORMLEY
|
|
Name:
|
Michael
J. Gormley
|
Title:
|
Executive
Vice President, Chief Operating Officer
|
and
Chief Financial Officer
|
|
(Principal
Financial Officer)
|
|
Date:
|
May
15, 2009
|