CHANGE IN CONTROL SEVERANCE AGREEMENT
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Amended and Restated
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into this
26th day of July 2005 ("Effective Date"), by and between Synergy Bank (the
"Savings Bank") and A. Xxxxxxx Xxxxxxxxxx (the "Employee").
WHEREAS, the Employee is currently employed by the Savings Bank as Senior
Vice President of Finance and Accounting and is experienced in certain phases of
the business of the Savings Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Savings Bank and Employee if the Savings Bank should
undergo a change in control (as defined hereinafter in the Agreement) after the
Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity of Senior Vice
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President of Finance and Accounting of the Savings Bank. The Employee's
employment shall be for no definite period of time and the Employee or the Bank
may terminate such employment relationship at any time for any reason or no
reason. The employment at-will relationship remains in full force and effect
regardless of any statements to the contrary made by company personnel or set
forth in any documents other than those explicitly made to the contrary and
signed by the President or the Chairman of the Bank. The Employee shall render
such administrative and management services to the Savings Bank and Synergy
Financial Group, Inc., the parent savings and loan holding company of the
Savings Bank ("Parent") as are currently rendered and as are customarily
performed by persons situated in a similar executive capacity. The Employee's
other duties shall be such as the Board of Directors for the Savings Bank (the
"Board of Directors" or "Board") or its President may from time to time
reasonably direct, including normal duties as an officer of the Savings Bank and
the Parent.
2. Term of Agreement. The term of this Agreement shall be for the period
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commencing on the Effective Date and ending thirty-six (36) months thereafter
("Term"). Additionally, on, or before, each annual anniversary date from the
Effective Date, the Term of this Agreement may be extended for an additional
period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Employee has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended. This Agreement shall be deemed terminated upon the
Employee's termination of employment with the Bank, absent a Change in Control
coincident or prior to such termination of employment.
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3. Termination of Employment in Connection with or Subsequent to a Change
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in Control.
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(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
Change in Control of the Savings Bank or Parent, Employee shall be paid an
amount equal to the product of 2.999 times the Employee's "base amount" as
defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended
(the "Code") and regulations promulgated thereunder. Additionally, the Employee
and his or her dependents shall remain eligible to participate in the medical
and dental insurance programs offered by the Bank to its employees for a period
of not less than eighteen months from the date of termination of employment;
provided that the Employee or such dependents shall pay the comparable COBRA
expense for continuation of such insurance. Said sum shall be paid in one (1)
lump sum not later than the date of such termination of employment and such
payments shall be in lieu of any other future payments which the Employee would
be otherwise entitled to receive. Notwithstanding the forgoing, all sums payable
hereunder shall be reduced in such manner and to such extent so that no such
payments made hereunder when aggregated with all other payments to be made to
the Employee by the Savings Bank or the Parent shall be deemed an "excess
parachute payment" in accordance with Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code") and be subject to the excise tax provided at
Section 4999(a) of the Code. The term "Change in Control" shall refer to: (i)
the sale of all, or substantially all, of the assets of the Savings Bank or the
Parent; (ii) the merger or recapitalization of the Savings Bank or the Parent
whereby the Savings Bank or the Parent is not the surviving entity; (iii) a
change in control of the Savings Bank or the Parent, as otherwise defined or
determined by the Office of Thrift Supervision or regulations promulgated by it;
or (iv) the acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder) of twenty-five percent (25%) or more of the outstanding voting
securities of the Savings Bank or the Parent by any person, trust, entity or
group. The term "person" means an individual other than the Employee, or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The provisions of this Section 3(a) shall survive
the expiration of this Agreement occurring after a Change in Control.
(b) Notwithstanding any other provision of this Agreement to the contrary
except as provided at Sections 4 and 5, Employee may voluntarily terminate his
employment under this Agreement within twelve (12) months following a Change in
Control of the Savings Bank or Parent, and upon the occurrence, or within 180
days thereafter, of any of the following events, which have not been consented
to in advance by the Employee in writing: (i) if Employee would be required to
move his personal residence or perform his principal executive functions more
than thirty-five (35) miles from the Employee's primary office as of the signing
of this Agreement; (ii) if in the organizational structure of the Savings Bank
or Parent, Employee would be required to report to a person or persons other
than the Board of the Savings Bank or its President; (iii) if the Savings Bank
or Parent should fail to maintain the Employee's base compensation in effect as
of the date of the Change in Control and existing employee benefits plans,
including material fringe benefit, stock option and retirement plans, except to
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the extent that such reduction in benefit programs is part of an overall
adjustment in benefits for all employees of the Savings Bank or Parent and does
not disproportionately adversely impact the Employee; (iv) if Employee would be
assigned duties and responsibilities other than those normally associated with
his position as referenced at Section 1, herein; or (v) if Employee's
responsibilities or authority have in any way been materially diminished or
reduced. Upon such voluntary termination of employment by the Executive in
accordance with this subsection, Executive shall thereupon be entitled to
receive the payments described in Section 3(a) of this Agreement. The provisions
of this Section 3(b) shall survive the expiration of this Agreement occurring
after a Change in Control.
4. Other Changes in Employment Status.
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Except as provided for at Section 3, herein, the Board of Directors may
terminate the Employee's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Employee
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive compensation or other
benefits for any period after termination with or without Just Cause.
Termination for "Just Cause" shall include termination because of the Employee's
personal dishonesty, incompetence, 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 material breach of any
provision of the Agreement.
5. Regulatory Exclusions.
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(a) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Savings Bank's affairs by an order issued
under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Savings Bank under
this Agreement shall terminate, as of the effective date of the order, but the
vested rights of the contracting parties shall not be affected.
(b) If the Savings Bank is in default (as defined in Section 3(x)(1) of
FDIA) all obligations under this Agreement shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the
contracting parties.
(c) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Savings Bank: (i) by the Director of the Office of
Thrift Supervision ("Director of OTS"), or his or her designee, at the time that
the Federal Deposit Insurance Corporation ("FDIC") enters into an agreement to
provide assistance to or on behalf of the Savings Bank under the authority
contained in Section 13(c) of FDIA; or (ii) by the Director of the OTS, or his
or her designee, at the time that the Director of the OTS, or his or her
designee approves a supervisory merger to resolve problems related to operation
of the Savings Bank or when the Savings Bank is determined by the Director of
the OTS to be in an unsafe or unsound condition. Any rights of the parties that
have already vested, however, shall not be affected by such action.
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(d) If the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Savings Bank's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)),
the Savings Bank's obligations under the Agreement shall be suspended as of the
date of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Savings Bank may within its discretion (i) pay the
Employee all or part of the compensation withheld while its contract obligations
were suspended and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(e) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 U.S.C. 1828(k) and any regulations
promulgated thereunder.
6. Successors and Assigns.
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(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Savings Bank which shall acquire, directly
or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Savings Bank or Parent.
(b) The Employee shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Savings
Bank.
7. Amendments. No amendments or additions to this Agreement shall be
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binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects whether
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as to validity, construction, capacity, performance or otherwise, by the laws of
the State of New Jersey, except to the extent that Federal law shall be deemed
to apply.
9. Severability. The provisions of this Agreement shall be deemed severable
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and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or the breach thereof, shall be settled exclusively by
arbitration in accordance with the rules then in effect of the district office
of the American Arbitration Association ("AAA") nearest to the home office of
the Bank, and judgment upon the award rendered may be entered in any court
having jurisdiction thereof, except to the extent that the parties may otherwise
reach a mutual settlement of such issue. Further, the settlement of the dispute
to be approved by the Board of the Bank may include a provision for the
reimbursement by the Bank to the Employee for all reasonable costs and expenses,
including reasonable attorneys' fees, arising from such dispute, proceedings or
actions, or the Board of the Bank or the Parent may authorize such reimbursement
of such reasonable costs and expenses by separate action upon a written action
and determination of the Board following settlement of the dispute. Such
reimbursement shall be paid within ten (10) days of Employee furnishing to the
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Bank or Parent evidence, which may be in the form, among other things, of a
canceled check or receipt, of any costs or expenses incurred by Employee. The
provisions of this Section 10 shall survive the expiration of this Agreement.
11. Confidential Information. The Employee acknowledges that during his or
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her employment he or she will learn and have access to confidential information
regarding the Savings Bank and the Parent and its customers and businesses
("Confidential Information"). The Employee agrees and covenants not to disclose
or use for his or her own benefit, or the benefit of any other person or entity,
any such Confidential Information, unless or until the Savings Bank or the
Parent consents to such disclosure or use or such information becomes common
knowledge in the industry or is otherwise legally in the public domain. The
Employee shall not knowingly disclose or reveal to any unauthorized person any
Confidential Information relating to the Savings Bank, the Parent, or any
subsidiaries or affiliates, or to any of the businesses operated by them, and
the Employee confirms that such information constitutes the exclusive property
of the Savings Bank and the Parent. The Employee shall not otherwise knowingly
act or conduct himself (a) to the material detriment of the Savings Bank or the
Parent, or its subsidiaries, or affiliates, or (b) in a manner which is inimical
or contrary to the interests of the Savings Bank or the Parent. Employee
acknowledges and agrees that the existence of this Agreement and its terms and
conditions constitutes Confidential Information of the Savings Bank, and the
Employee agrees not to disclose the Agreement or its contents without the prior
written consent of the Savings Bank. Notwithstanding the foregoing, the Savings
Bank reserves the right in its sole discretion to make disclosure of this
Agreement as it deems necessary or appropriate in compliance with its regulatory
reporting requirements. Notwithstanding anything herein to the contrary, failure
by the Employee to comply with the provisions of this Section may result in the
immediate termination of the Agreement within the sole discretion of the Savings
Bank, disciplinary action against the Employee taken by the Savings Bank,
including but not limited to the termination of employment of the Employee for
breach of the Agreement and the provisions of this Section, and other remedies
that may be available in law or in equity.
12. Entire Agreement. This Agreement together with any understanding or
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modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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