ASB HOLDING COMPANY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is effective this 1st day of January 2003, (hereinafter
the ("Effective Date") by and between ASB Holding Company, Bloomfield, New
Jersey (hereinafter the "Company") and Xxxxxx Xxxxxxxxx (hereinafter the
"Executive").
WITNESSETH
WHEREAS, the Executive has heretofore been employed by American Savings
Bank of NJ (the "Savings Bank") and the Company as the President and is
experienced in all phases of the business of the Savings Bank; and
WHEREAS, the Company desires to be ensured of the Executive's continued
active participation in the business of the Company; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Company and in consideration of the Executive's agreeing to remain in the
employ of the Company, the parties desire to specify the continuing employment
relationship between the Company and the Executive;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereby agree as follows:
1. Employment. The Company hereby employs the Executive in the capacity
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of President. The Executive hereby accepts said employment and agrees to render
such administrative and management services to the Company as are currently
rendered and as are customarily performed by persons situated in a similar
executive capacity. The Executive shall promote the business of the Company. The
Executive's other duties shall be such as the Board of Directors for the Company
(the "Board of Directors" or "Board") may from time to time reasonably direct,
including normal duties as an officer of the Company.
2. Term of Employment. The term of employment of Executive under this
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Agreement shall be for the period commencing on the Effective Date and ending
thirty-six (36) months thereafter (hereinafter the "Term"). Additionally, on, or
before, each annual anniversary date from the Effective Date, the Term of
employment under this Agreement shall be extended for up to an additional period
beyond the then effective expiration date upon a determination and resolution of
the Board of Directors that the performance of the Executive has met the
requirements and standards of the Board, and that the Term of such Agreement
shall be extended annually for an additional year so that the contract is always
for a thirty-six (36) month term. References herein to the Term of this
Agreement shall refer both to the initial term and successive terms.
3. Compensation, Benefits and Expenses.
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(a) Base Salary. The Company shall compensate and pay the
Executive during the Term of this Agreement a minimum base salary at the rate of
$250,000 per annum (hereinafter the "Base Salary"), payable in cash not less
frequently than monthly; provided, that the rate of such salary shall be
reviewed by the Board of Directors not less often than annually, and the
Executive shall be entitled to receive increases at such percentages or in such
amounts as determined by the Board of Directors. The Base Salary may not be
decreased without the Executive's express written consent. The Base Salary shall
be offset by any Base Salary paid to the Executive by the Savings Bank.
(b) Discretionary Bonus. The Executive shall be entitled to
participate in an equitable manner with all other senior management employees of
the Company in discretionary bonuses that may be authorized and declared by the
Board of Directors to its senior management executives from time to time. No
other compensation shall be deemed a substitute for the Executive's right to
participate in such discretionary bonuses and as declared by the Board.
(c) Participation in Benefit and Retirement Plans. The Executive
shall be entitled to participate in and receive the benefits of any plan of the
Company which may be or may become applicable to senior management relating to
pension or other retirement benefit plans, supplementary retirement plan,
profit-sharing, stock options or incentive plans, or other plans, benefits and
privileges given to employees and executives of the Company, to the extent
commensurate with his then duties and responsibilities, as fixed by the Board of
Directors of the Company.
(d) Participation in Medical Plans and Insurance Policies. The
Executive shall be entitled to participate in and receive the benefits of any
plan or policy of the Company which may be or may become applicable to senior
management relating to life insurance, short and long term disability, medical,
dental, eye-care, prescription drugs or medical reimbursement plans. During the
term of the Executive's employment with the Company, the Executive's dependent
family may participate in such programs, with the cost of premiums paid in part
by the Company and by the Executive in accordance with policies established by
the Board of Directors. Additionally, upon termination without cause or as a
result of a change in control, the Executive and Executive's dependent family
shall be eligible to participate in medical and dental insurance plans sponsored
by the Company with the total cost of such premiums paid by the Company for the
remainder of this Agreement.
(e) Vacations and Sick Leave. The Executive shall be entitled to
paid annual vacation leave in accordance with the policies as established from
time to time by the Board of Directors, which shall, in no event, be less than
six weeks per annum. The Executive shall also be entitled to an annual sick
leave benefit as established by the Board for senior management employees of the
Company.
(f) Expenses. The Company shall reimburse the Executive or
otherwise provide for or pay for or pay for all reasonable expenses incurred by
the Executive in furtherance of, or in connection with, the business of the
Company, including, but not by way of limitation, premium country club dues,
automobile and traveling expenses, and all reasonable entertainment expenses,
subject to such reasonable documentation and other limitations as may be
established by the Board of Directors of the Company. If such expenses are paid,
in the first instance, by the Executive, the Company shall reimburse the
Executive therefor.
(g) Automobile. The Company will provide the Executive with an
automobile for business use. Upon termination of employment of the Executive for
any reason other than Just Cause, the Company will transfer title of ownership
of such automobile to the Executive and the Executive will pay any applicable
taxes. It is expected that if the Company is leasing the automobile, the Company
will exercise the purchase option to buy the automobile.
(h) Changes in Benefits. The Company shall not make any changes
in such plans, benefits or privileges previously described in Section 3(c), (d)
and (e) which would adversely affect the Executive's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Company and does not result in a proportionately
greater adverse change in the rights of, or benefits to the Executive, as
compared with any other executive officer of the Company. Nothing paid to
Executive under any plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the salary payable to Executive
pursuant to Section 3(a) hereof.
4. Loyalty; Noncompetition.
(a) The Executive shall devote his full time and attention to the
performance of his employment under this Agreement. During the term of the
Executive's employment under this Agreement, the Executive shall not engage in
any business or activity contrary to the business affairs or interests of the
Company.
(b) Nothing contained in this Section 4 shall be deemed to
prevent or limit the right of Executive to invest in the capital stock or other
securities of any business dissimilar from that of the Company, or, solely as a
passive or minority investor, in any business.
5. Standards. During the term of this Agreement, the Executive shall
perform his duties in accordance with such reasonable standards expected of
executives with comparable positions in comparable organizations and as may be
established from time to time by the Board of Directors.
6. Termination and Termination Pay. The Executive's employment under
this Agreement shall be terminated upon any of the following occurrences:
(a) The death of the Executive during the Term of this Agreement,
in which event the Executive's estate shall be entitled to receive the
compensation due the Executive through the last day of the calendar month in
which Executive's death shall have occurred.
(b) The Board of Directors may terminate the Executive's
employment at any time, but any termination by the Board of Directors other than
termination for Just Cause, shall not discharge or release the Company's
obligation to pay or in any manner impair the Executive's right to compensation
or other benefits under this Agreement. The Executive shall have no right to
receive compensation or other benefits for any period after termination for
"Just Cause". The Board may, within its sole discretion, acting in good faith,
terminate the Executive for Just Cause and shall notify such Executive
accordingly. Termination for "Just Cause" shall include termination because of
the Executive'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.
(c) Except as provided pursuant to Section 9 hereof, in the event
Executive's employment under this Agreement is terminated by the Board of
Directors without Just Cause, the Company shall be obligated to continue to pay
the Executive the salary provided pursuant to Section 3(a) for a period of
thirty-six (36) months thereafter, and the cost of Executive obtaining all
health, life, disability, and other benefits which the Executive would be
eligible to participate in through such date based upon the benefit levels
substantially equal to those being provided Executive at the date of termination
of employment.
(d) The voluntary termination by the Executive during the Term of
this Agreement with the delivery of no less than 60 days written notice to the
Board of Directors, other than pursuant to Section 9(b), in which case the
Executive shall be entitled to receive only the compensation, vested rights, and
all employee benefits up to the date of such termination.
7. Regulatory Exclusions. Notwithstanding anything herein to the
contrary, any payments made to the Executive pursuant to the Agreement, or
otherwise, shall be subject to and conditioned upon compliance with 12 USC
ss.1828(k) and any regulations promulgated thereunder.
8. Disability. If the Executive shall become disabled or incapacitated
to the extent that he is unable to perform his duties hereunder, by reason of
medically determinable physical or mental impairment, as determined by a doctor
engaged by the Board of Directors, the Company will pay Executive, as disability
pay, a weekly payment equal to one hundred percent (100%) of Executive's weekly
rate of Base Salary, on the effective date of such termination. These disability
payments shall commence on the effective date of Executive's termination and
will end on the earlier of (i) the date Executive returns to the full-time
employment of the Company in the same capacity as he was employed prior to his
termination for Disability and pursuant to an employment agreement between
Executive and the Company; (ii) Executive's full-time employment by another
employer; (iii) Executive's death; or (iv) the expiration of the term of
Executive's disability insurance policy at age 65 as currently provided by the
Company. Such benefits noted herein shall be reduced by any benefits otherwise
provided to the Executive during such period under the provisions of disability
insurance coverage in effect for the Executive paid by the Company. It is the
intent of both parties that such benefits shall be paid two-thirds by the
Executive's existing disability insurance policy and one-third by the Company.
Thereafter, Executive shall be eligible to receive benefits provided by the
Company, if any, under the provisions of disability insurance coverage in effect
for Company employees. Upon returning to active full-time employment, the
Executive's full compensation as set forth in this Agreement shall be reinstated
as of the date of commencement of such activities. In the event that the
Executive returns to active employment on other than a full-time basis, then his
compensation (as set forth in Section 3(a) of this Agreement) shall be reduced
in proportion to the time spent in said employment, or as shall otherwise be
agreed to by the parties.
9. Change in Control.
(a) Notwithstanding any provision herein to the contrary, in the
event of the involuntary termination of Executive's employment during the Term
of this Agreement following any Change in Control of the Savings Bank or
Company, or within 24 months thereafter of such Change in Control, absent Just
Cause, Executive shall be paid an amount equal to the product of 2.999 times the
Executive's "base amount" as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (hereinafter the "Code") and regulations
promulgated thereunder. Said sum shall be paid, at the option of Executive,
either in one (1) lump sum within thirty (30) days of such termination of
service or in periodic payments over the next 36 months or the remaining term of
this Agreement, whichever is less, as if Executive's employment had not been
terminated, and such payments shall be in lieu of any other future payments
which the Executive would be otherwise entitled to receive under Section 6 of
this Agreement. Notwithstanding the forgoing, all sums payable hereunder shall
be reduced in such manner and to such extent that the Savings Bank shall make
payments to the Executive under the Employment Agreement between the Savings
Bank and the Executive upon such termination of employment. 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 Executive by the Savings Bank or the Company shall be
deemed an "excess parachute payment" in accordance with Section 280G of 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 control of voting proxies
whether related to stockholders or mutual members by any person, other than the
Board of Directors of the Savings Bank, to direct more than 25% of the
outstanding votes of the Savings Bank by any person or by persons acting as a
group within the meaning of Section 13(d) of the Exchange Act; (ii) an event
whereby the OTS, FDIC or any other department, agency or quasi-agency of the
federal government cause or bring about, without the consent of the Savings
Bank, a change in the corporate structure or organization of the Savings Bank;
(iii) an event whereby the OTS, FDIC or any other agency or quasi-agency of the
federal government cause or bring about, without the consent of the Savings
Bank, a taxation or involuntary distribution of retained earnings or proceeds
from the sale of securities to depositors, borrowers, any government agency or
organization or civic or charitable organization; or (iv) a merger or other
business combination between the Savings Bank and another corporate entity
whereby the Savings Bank is not the surviving entity.
The term "Change in Control" shall also refer to: (i) the sale of
all, or a material portion, of the assets of the Savings Bank or the Company;
(ii) the merger or recapitalization of the Savings Bank or the Company whereby
the Savings Bank or the Company is not the surviving entity; (iii) a change in
control of the Savings Bank or the Company, 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 Company by any person, trust, entity or group. The term "person" means an
individual other than the Executive, or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein. A
Change in Control shall not include a transaction whereby American Savings, MHC
shall merge into the Company or the Savings Bank and a new parent holding
company of the Company or the Savings Bank is formed.
(b) Notwithstanding any other provision of this Agreement to
the contrary, Executive may voluntarily terminate his employment during the Term
of this Agreement following a Change in Control of the Savings Bank or the
Company, or within twenty-four (24) months following such Change in Control, and
Executive shall thereupon be entitled to receive the payment described in
Section 9(a) of this Agreement, upon the occurrence, or within 120 days
thereafter, of any of the following events, which have not been consented to in
advance by the Executive in writing: (i) if Executive would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Executive's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Company,
Executive would be required to report to a person or persons other than the
Board of Directors of the Company; (iii) if the Company should fail to maintain
Executive's base compensation in effect as of the date of the Change in Control
and the existing employee benefits plans, including material fringe benefit,
stock option and retirement plans; (iv) if Executive would be assigned duties
and responsibilities other than those normally associated with his position as
referenced at Section 1, herein; (v) if Executive's responsibilities or
authority have in any way been materially diminished or reduced; or (vi) if
Executive would not be reelected to the Board of Directors of the Company.
10. Source of Payments. All payments provided in this Agreement shall
be timely paid in cash or check from the general funds of the Company. The
Company unconditionally guarantees payment and provision of all amounts and
benefits due hereunder to Executive.
11. Withholding. All payments required to be made by the Company
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Company may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
12. Payment of Costs and Legal Fees. All reasonable costs and legal
fees paid or incurred by Executive pursuant to any dispute or question of
interpretation relating to this Agreement shall be paid or reimbursed by the
Company if Executive is successful pursuant to a legal judgement, arbitration or
settlement.
13. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Company which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Company.
(b) The Company shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation, to all or
substantially all the business or assets of the Company, expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Agreement, in the same manner and to the same extent that the Company would
be required to perform if no such succession or assignment had taken place.
(c) Since the Company is contracting for the unique and
personal skills of the Executive, the Executive shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Company.
14. Indemnification.
(a) The Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, and shall indemnify
Executive (and his heirs, executors and administrators) as permitted under
federal law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the Company
(whether or not he continues to be a director or officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not to be limited to, judgements, court costs, and attorneys' fees
and the cost of reasonable settlements.
(b) Any payments made to Executive pursuant to this Section 14
are subject to and conditioned upon compliance with 12 C.F.R. Section 545.121
and any rules or regulations promulgated thereunder.
15. Amendment: Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing, signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Company to sign on its
behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
16. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of New
Jersey.
17. Nature of Obligations. Nothing contained herein shall create or
require the Company to create a trust of any kind to fund any benefits which may
be payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Company hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Company.
18. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.
20. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled 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 Company, 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. Furthermore, the settlement of the dispute to be
approved by the Board of the Company may include a provision for the
reimbursement by the Company to the Executive for all reasonable costs and
expenses, including reasonable attorneys' fees, arising from such dispute,
proceedings or actions, or the Board of the Company 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 Executive
furnishing to the Company evidence, which may be in the form, among other
things, of a canceled check or receipt, of any costs or expenses incurred by
Executive.
21. Confidential Information. The Executive acknowledges that during
his employment he will learn and have access to confidential information
regarding the Company and its customers and businesses (hereinafter
"Confidential Information"). The Executive agrees and covenants not to disclose
or use for his own benefit, or the benefit of any other person or entity, any
such Confidential Information, unless or until the Company consents to such
disclosure or use or such information becomes common knowledge in the industry
or is otherwise legally in the public domain. The Executive shall not knowingly
disclose or reveal to any unauthorized person any Confidential Information
relating to the Company, or any subsidiaries or affiliates, or to any of the
businesses operated by them, and the Executive confirms that such information
constitutes the exclusive property of the Company. The Executive shall not
otherwise knowingly act or conduct himself (a) to the material detriment of the
Company, or its subsidiaries, or affiliates, or (b) in a manner which is
inimical or contrary to the interests of the Company. Executive acknowledges and
agrees that the existence of this Agreement and its terms and conditions
constitutes Confidential Information of the Company, and the Executive agrees
not to disclose the Agreement or its contents without the prior written consent
of the Company. Notwithstanding the foregoing, the Company 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.
22. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
