FORM OF FIRST SAVINGS BANK
THREE-YEAR CHANGE IN CONTROL AGREEMENT
This AGREEMENT, originally entered into on November 18, 1998, is amended
and restated in its entirety effective November 15, 2000, by and between First
Savings Bank (the "Bank"), a New-Jersey chartered savings bank, with its
principal administrative office at 1000 Woodbridge Center Drive, Woodbridge, New
Jersey,__________________ ("Executive"), and First Sentinel Bancorp, Inc. (the
"Holding Company"), a corporation organized under the laws of the State of
Delaware which is the holding company for the Bank.
WHEREAS, the Bank recognizes the substantial contribution Executive has
made to the Bank and wishes to protect Executive's position therewith for the
period provided in this Agreement; and
WHEREAS, Executive has agreed to serve in the employ of the Bank.
NOW, THEREFORE, in consideration of the contribution and responsibilities
of Executive, and upon the other terms and conditions hereinafter provided, the
parties hereto agree as follows:
1. TERM OF AGREEMENT
The term of this First Savings Bank Three-Year Change in Control Agreement
(the "Agreement") shall be deemed to have commenced as of the date first above
written and shall continue for a period of thirty-six (36) full calendar months
thereafter. Commencing on the execution of this Agreement, as amended and
restated, the term of this Agreement shall be extended for one day each day, so
that a constant thirty-six (36) calendar month term shall remain in effect,
until such time as the Board of Directors of the Bank (the "Board") or Executive
elects not to extend the term of this Agreement by giving written notice to the
other party in accordance with Section 4 of this Agreement, in which case the
term of this Agreement shall be fixed and shall end on the third anniversary of
the date of such written notice.
2. CHANGE IN CONTROL
(a) Upon the occurrence of a "Change in Control" of the Bank or the
Holding Company (as defined in Section 2(b) this Agreement) followed by the
termination of Executive's employment, other than in connection with a
Termination for Cause, (as defined in Section 2(c) of this Agreement), at any
time during either the term of this Agreement or within a sixty (60) day period
following the one (1) year anniversary date of the Change in Control, the
provisions of Section 3 of this Agreement shall apply. Upon the occurrence of a
Change in Control, Executive shall have the right to elect to voluntarily
terminate his employment at any time during the term of this Agreement following
any demotion, loss of title, office or significant authority, reduction in
Executive's annual compensation or benefits, or relocation of Executive's
principal place of employment by more than twenty-five (25) miles from its
location immediately prior to a Change in Control; PROVIDED, HOWEVER, Executive
may consent in writing to any such
demotion, loss, reduction or relocation. The effect of any written consent of
Executive under this Section 2(a) shall be strictly limited to the terms
specified in such written consent.
(b) For purposes of this Agreement, a "Change in Control" of the Bank or
the Holding Company shall mean an event of a nature that: (i) would be required
to be reported in response to Item 1(a) of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in
Control of the Holding Company or the Bank within the meaning of the Change in
Bank Control Act and the Rules and Regulations promulgated by the Federal
Deposit Insurance Corporation ("FDIC") at 12 C.F.R. SS. 303.4(a), with respect
to the Bank, and the Rules and Regulations promulgated by the Office of Thrift
Supervision ("OTS") (or its predecessor agency), with respect to the Holding
Company, as in effect on the date of this Agreement; or (iii) without limitation
such a Change in Control shall be deemed to have occurred at such time as (A)
any "person" (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of voting securities of the Bank or the
Holding Company representing 20% or more of the Bank's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting securities of the Bank purchased by the Holding Company and any voting
securities purchased by any employee benefit plan of the Holding Company or its
Subsidiaries, or (B) individuals who constitute the Board on the date hereof
(the "Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Holding Company's stockholders was approved by a Nominating Committee solely
composed of members which are Incumbent Board members, shall be, for purposes of
this clause (B), considered as though he were a member of the Incumbent Board,
or (C) a plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Bank or the Holding Company or similar
transaction occurs or is effectuated in which the Bank or Holding Company is not
the resulting entity, or (D) a proxy statement has been distributed soliciting
proxies from stockholders of the Holding Company, by someone other than the
current management of the Holding Company, seeking stockholder approval of a
plan of reorganization, merger or consolidation of the Holding Company or Bank
with one or more corporations as a result of which the outstanding shares of the
class of securities then subject to such plan or transaction are exchanged for
or converted into cash or property or securities not issued by the Bank or the
Holding Company shall be distributed, or (E) a tender offer is made for 20% or
more of the voting securities of the Bank or Holding Company then outstanding.
(c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 of this Agreement upon Termination for Cause. The term
"Termination for Cause" shall mean termination because of Executive's personal
dishonesty, willful misconduct, any breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, regulation (other than traffic violations or similar offenses), final
cease and desist order or material breach of any provision of this Agreement.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to
Executive a Notice of Termination which shall include a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of
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the members of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to Executive and an opportunity for Executive,
together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause, except for compensation and benefits
already accrued or vested. During the period beginning on the date of the Notice
of Termination for Cause pursuant to Section 4 of this Agreement through the
Date of Termination for Cause, stock options and related limited rights granted
to Executive under any stock option plan shall not be exercisable nor shall any
unvested stock awards granted to Executive under any stock benefit plan of the
Holding Company or the Bank vest. At the Date of Termination such stock options
(and related limited rights (if any)) and such unvested stock awards shall
become null and void and shall not be exercisable by or delivered to Executive
at any time subsequent to such Termination for Cause.
3. TERMINATION BENEFITS
Upon the occurrence of a Change in Control, followed at any time during
the term of this Agreement by termination of Executive's employment due to: (1)
the involuntary termination of Executive's employment (other than Termination
for Cause); (2) Executive's voluntary termination of employment during the term
of this Agreement following any demotion, loss of title, office or significant
authority, reduction in annual compensation or benefits, or relocation of
Executive's principal place of employment more than twenty-five (25) miles from
its location immediately prior to a Change in Control (unless Executive so
consents); or (3) Executive's resignation from employment for any reason within
the sixty (60) day period following the one (1) year anniversary date of the
Change in Control, the Bank shall pay Executive, or in the event of Executive's
subsequent death, Executive's beneficiaries or estate, as the case may be, a sum
equal to three (3) times Executive's average annual compensation for the three
(3) most recent taxable years Executive has been employed by the Bank, or such
lesser number of years in the event Executive is employed with the Bank for less
than three (3) years. Annual compensation shall include base salary and any
other taxable income paid by the Holding Company or the Bank, including but not
limited to amounts related to the granting or vesting of restricted stock,
commissions, bonuses, severance payments, retirement benefits and fringe
benefits paid or to be paid to Executive or paid for Executive's benefit during
any such year, as well as profit sharing, employee stock ownership plan and
other retirement contributions or benefits, including to any tax-qualified or
non-tax-qualified plan or arrangement (whether or not taxable) made or accrued
on behalf of Executive for such year. Provided, however, annual compensation
shall not include income attributable to the exercise of stock options. At the
election of Executive, which election is to be made prior to a Change in
Control, such payments shall be made in a lump sum or on an annual basis in
approximately equal installments over a three (3) year period. In the event no
election is made, payment to Executive will be made on a monthly basis in
approximately equal installments during the remaining term of the Agreement.
(b) Upon the occurrence of a Change in Control of the Bank or the
Holding Company followed at any time during the term of this Agreement by
Executive's voluntary or involuntary termination of employment in accordance
with paragraph (a) of this Section 3, other than for Termination for Cause, the
Bank shall cause to be continued life, medical and disability coverage
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substantially identical to the coverage maintained by the Bank or Holding
Company for Executive prior to Executive's severance, except to the extent such
coverage may be changed in its application to all Bank or Holding Company
employees on a nondiscriminatory basis. Such coverage and payments shall cease
upon the expiration of thirty-six (36) full calendar months from the Date of
Termination.
(c) Notwithstanding the preceding paragraphs of this Section 3, in the
event that:
(i) the aggregate payments or benefits to be made or afforded to
Executive, which are deemed to be parachute payments as
defined in Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), or any successor thereof (the
"Termination Benefits"), would be deemed to include an "excess
parachute payment" under Section 280G of the Code; and
(ii) if such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar
($1.00) less than an amount equal to three (3) times
Executive's "base amount," as determined in accordance with
said Section 280G and the Non-Triggering Amount less the
product of the marginal rate of any applicable state and
federal income tax and the Non-Triggering Amount would be
greater than the aggregate value of the Termination Benefits
(without such reduction) minus (i) the amount of tax required
to be paid by the Executive thereon by Section 4999 of the
Code and further minus (ii) the product of the Termination
Benefits and the marginal rate of any applicable state and
federal income tax,
then the Termination Benefits shall be reduced to the Non-Triggering Amount. The
allocation of the reduction required hereby among the Termination Benefits shall
be determined by the Executive.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Bank or by Executive in connection
with a Change in Control shall be communicated by a Notice of Termination to the
other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which indicates the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the instance of Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given);
provided, however, that if a dispute regarding the Executive's termination
exists, the "Date of Termination" shall be determined in accordance with Section
4(c) of this Agreement.
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(c) If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute in connection with a Change in
Control, in the event that the Executive is terminated for reasons other than
Termination for Cause, the Bank will continue to pay Executive full compensation
in effect when the Notice was given (including, but not limited to base salary)
until the earlier of: (1) the resolution of the dispute in accordance with this
Agreement; or (2) the expiration of the remaining term of this Agreement as
determined as of the Date of Termination.
5. SOURCE OF PAYMENTS
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Bank.
Further, the Holding Company guarantees such payment and provision of all
amounts and benefits due hereunder to Executive and, if such amounts and
benefits due from the Bank are not timely paid or provided by the Bank, such
amounts and benefits shall be paid and provided by the Holding Company.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Bank and Executive, except
that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided. No provision of
this Agreement shall be interpreted to mean that Executive is subject to
receiving fewer benefits than those available to Executive without reference to
this Agreement.
Nothing in this Agreement shall confer upon Executive the right to
continue in the employ of the Bank or shall impose on the Bank any obligation to
employ or retain Executive in its employ for any period.
7. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
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(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Holding Company and their respective successors and assigns.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REQUIRED REGULATORY PROVISIONS
Any payments made to Executive pursuant to this Agreement, or otherwise,
are subject to and conditioned upon compliance with 12 U.S.C. SS.1828(k) and any
rules and regulations promulgated thereunder, including 12 C.F.R. Part 359.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall, to the full extent consistent with
law, continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement. In addition, references to the
masculine shall apply equally to the feminine.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of New Jersey.
13. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Executive within fifty
(50) miles from the location of the Bank's main office, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
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however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
14. 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 Bank (which payments are guaranteed by the Holding
Company pursuant to Section 5 of this Agreement) if Executive is successful with
respect to such dispute or question of interpretation pursuant to a legal
judgment, arbitration or settlement.
15. INDEMNIFICATION
The Bank shall provide Executive (including Executive's heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense and shall indemnify Executive (and
Executive's heirs, executors and administrators) to the fullest extent permitted
under New Jersey 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
Bank (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, judgments, court costs and attorneys' fees
and the cost of reasonable settlements.
16. SUCCESSOR TO THE BANK
The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank, to expressly and
unconditionally assume and agree to perform the Bank's obligations under this
Agreement in the same manner and to the same extent that the Bank would be
required to perform such obligations if no such succession or assignment had
taken place.
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SIGNATURES
IN WITNESS WHEREOF, First Savings Bank has caused this Agreement, as
amended and restated, to be executed by their duly authorized officers, and
Executive has signed this Agreement, on the ______ day of ____________, 200__.
ATTEST: FIRST SAVINGS BANK
By:
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SEAL
ATTEST: FIRST SENTINEL BANCORP, INC.
(Guarantor)
By:
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WITNESS: EXECUTIVE
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