WEST ESSEX BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT is made and entered into this 17th day of February, 1999, by
and among West Essex Bancorp, Inc (the "Holding Company"), a federally-
chartered corporation and holding company for West Essex Bank (the "Bank"), with
its principal administrative office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Executive").
WHEREAS, the Holding Company wishes to continue to assure itself of the
services of Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Holding Company
on a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, Executive shall be nominated
and elected and or appointed to serve as President and Chief Executive Officer
of the Holding Company. Executive shall render administrative and management
services to the Holding Company such as are customarily performed by persons
situated in a similar executive capacity. During said period, Executive also
agrees to serve, if elected, as an officer and director of any subsidiary or
affiliate of the Holding Company.
2. TERMS AND DUTIES.
(a) The period of Executive's employment under this 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 first anniversary date of this Agreement, and continuing at each anniversary
date thereafter, the Board of Directors of the Holding Company ("Board"), may
extend the Agreement an additional year such that the remaining term of the
Agreement shall be three (3) years unless the Executive elects not to extend the
term of this Agreement by giving notice in accordance with Section 9 of the
Agreement. The Board will review the Executive's performance annually for
purposes of determining whether to extend the Agreement, and the rationale and
the results thereof shall be included in the minutes of the Board's meeting. The
Board shall give notice to the Executive as soon as possible after such review
as to whether the Agreement is to be extended.
(b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the
organization, operation and management of the Holding Company and which
activities may include participation in community and civic organizations;
provided, however, that, with the approval of the Board, as evidenced by a
resolution of such Board, from time to time, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or positions
in, companies or organizations, which, in such Board's judgment, will not
present any conflict of interest with the Holding Company, or materially affect
the performance of Executive's duties pursuant to this Agreement.
(c) Notwithstanding anything herein contained to the contrary, Executive's
employment with the Holding Company may be terminated by the Holding Company or
the Executive during the term of this Agreement, subject to the terms and
condition of this Agreement. However, Executive shall not perform, in any
respect, directly or indirectly, during the pendency of his temporary or
permanent suspension or termination from the Institution, duties and
responsibilities formerly performed at the Institution as part of his duties and
responsibilities as President and Chief Executive Officer of the Holding
Company.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Executive shall be entitled to a salary from the Holding Company or
its subsidiaries of not less than $275,000 per year ("Base Salary"). Base
Salary shall include any amounts of compensation deferred by Executive under any
tax-qualified retirement or welfare benefit plan or any other deferred
compensation arrangement maintained by the Holding Company or its subsidiaries.
Executive's Base Salary shall be payable in accordance with the normal payroll
practices of the Holding Company or its subsidiaries. During the period of this
Agreement, Executive's Base Salary shall be reviewed at least annually; the
first such review will be made no later than one year from the date of this
Agreement. Such review shall be conducted by the Board or a Committee designated
by the Board, and the Board or the Committee of the Board may increase
Executive's Base Salary. The increased Base Salary shall become the "Base
Salary" for purposes of the Agreement. In addition to the Base Salary provided
in this Section 3(a), Executive shall be entitled to incentive compensation and
bonuses as provided in any plan of the Holding Company or its subsidiaries in
which Executive is eligible to participate.
(b) The Executive shall be entitled to participate in employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, including the payment for (i)
the use of an automobile and payment for automobile insurance and any costs
associated with its operation and maintenance, (ii) membership to a country club
and the expenses and assessments associated therewith and (iii) attendance to
national and state conventions and educational conferences and the expenses
associated therewith for the Executive and his spouse, and the Holding Company
or its subsidiaries will not, without Executive's prior written consent, make
any changes in such plans, arrangements or perquisites which would materially
adversely affect Executive's rights or benefits thereunder except to the extent
that such changes would affect all of the Holding Company's or its subsidiaries
employees. Without limiting the generality of the foregoing
2
provisions of this Subsection (b), Executive shall be entitled to participate in
or receive benefits under all plans relating to stock options, restricted stock
awards, stock purchases, pension, thrift, supplemental retirement, profit-
sharing, employee stock ownership, group life insurance, medical and other
health and welfare coverage, education, cash or stock bonuses that are now or
hereafter made available by the Holding Company or its subsidiaries in the
future to its senior executives and key management employees, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Nothing paid to the Executive under any such plan or
arrangement will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.
(c) This Holding Company shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by Executive performing
his obligations under this Agreement and may provide such additional
compensation in such form and such amounts as the Board may from time to time
determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Holding Company or its subsidiaries of Executive's full-time
employment hereunder for any reason other than a Change in Control, as defined
in Section 5(a) hereof, Termination for Cause, as defined in Section 8 hereof,
retirement in accordance with the Bank's pension plan or Disability as defined
in Section 7; (ii) Executive's resignation from the Holding Company's employ, in
the manner set forth below, upon any (A) failure to elect or appoint Executive
as President and Chief Executive Officer of the Holding Company unless consented
to by the Executive, (B) material changes in Executive's functions, duties or
responsibilities, which would cause Executive's position to become one of lesser
responsibility, importance or scope from the position and attributes described
in Section 1, above, unless consented to by the Executive, (C) relocation of
Executive's principal place of employment by more than 50 miles from its
location at the effective date of this Agreement, unless consented to by the
Executive, (D) material reduction in the benefits and perquisites to the
Executive from those being provided as of the effective date of this Agreement,
unless consented to by the Executive, (E) liquidation or dissolution of the
Holding Company or its subsidiaries or in the event of any governmental
confiscation of the net worth of the Holding Company or its subsidiaries, or (F)
breach of this Agreement by the Holding Company. Upon the occurrence of any
event described in clauses (A), (B), (C), (D) or (F), above, Executive shall
have the right to elect to terminate his employment under this Agreement by
resignation upon not less than sixty (60) days prior written notice given within
six full calendar months after the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, the Company shall be obligated to pay Executive, or, in the event
of his subsequent death, his beneficiary or beneficiaries, or his estate, as the
case may be a sum equal to: (i) the Base Salary
3
and bonuses in accordance with Section 3(a) of this Agreement, that would have
been paid to Executive for the remaining term of this Agreement had the Event of
Termination not occurred; and (ii) all benefits set forth in Section 3(b) of
this Agreement that would have been paid or provided to Executive for the
remaining term of this Agreement had an Event of Termination not occurred,
provided, however, that any payments pursuant to this subsection shall not,
-------- -------
in the aggregate, exceed three times Executive's Average Annual Compensation for
the five most recent taxable years that Executive has been employed by the
Holding Company or such lesser number of years in the event that Executive shall
have been employed by the Holding Company for less than five years ("Average
Annual Compensation"). Average Annual Compensation shall include all taxable
income paid by the Bank or Holding Company including but not limited to Base
Salary, commissions and bonuses, as well as contributions on behalf of Executive
to any pension and profit sharing plan, director or committee fees and fringe
benefits paid or to be paid to the Executive in any such year and any payment of
expense items without accountability or business purpose or that do not meet the
Internal Revenue Service requirements for deductibility by the Holding Company
or its subsidiaries. In the event that the Holding Company or its subsidiaries
are not in compliance with its minimum capital requirements or if such payments
would cause the Bank's capital to be reduced below its minimum capital
requirements, such payments shall be deferred to the extent required by
applicable law until such time as the Bank is in capital compliance. At the
election of the Executive, which election is to be made prior to the Executive's
Date of Termination, such payments shall be made in a lump sum or paid monthly
during the remaining term of this Agreement following the Executive's
termination. In the event that no lump sum election is made, payment to the
Executive will be made on a monthly basis during the remaining term of this
Agreement. Such payments shall not be reduced in the event the Executive obtains
other employment following termination of employment unless the Executive's
other employment constitutes a breach of Section 11 of this Agreement. In such
event the Bank shall be entitled to seek any remedies available to it for breach
of this Agreement.
(c) Upon the occurrence of an Event of Termination, the Holding Company or
its subsidiaries will cause to be continued life, medical, dental and long-term
disability coverage substantially identical to the coverage maintained by the
Holding Company or its subsidiaries for Executive prior to his termination at no
premium cost to the Executive. Such coverage shall cease upon the expiration of
the remaining term of this Agreement. Any bond outstanding for country club
membership shall be transferred without payment therefore by the Executive and
the Holding Company or its subsidiaries shall pay the annual membership dues and
assessments for the remaining term of this Agreement.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the Bank or
Holding Company shall mean an event of a nature that: (A) would be required to
be reported in response to Item 1 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 1934 (the "Exchange Act"); (B) results in a Change in Control of
the Bank or the Holding Company within the meaning of the Home Owners' Loan Act
of 1933, as amended, the Federal Deposit Insurance Act, and the Rules and
Regulations
4
promulgated by the Office of Thrift Supervision (or its successor agency), as in
effect on the date hereof (provided that in applying the definition of a change
in control as set forth under the rules and regulations of the OTS, the Board
shall substitute its judgment for that of the OTS); or (C) 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 of the Bank's or the Holding Company's employee
benefit plans; or (b) individuals who constitute the Board of the Bank or the
Holding Company on the date of the Conversion (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 of the Conversion or Reorganization
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 Bank's or the Holding Company's stockholders was approved by the same
Nominating Committee serving under an Incumbent Board, 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 in which the Bank or the Holding Company is not the resulting
entity, provided however, that such an event listed above will be deemed to have
occurred or to have been effectuated upon the receipt of all required regulatory
approvals not including the lapse of any statutory waiting periods.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c) and (d) of this Section 5 upon his subsequent termination of
employment at any time during the term of this Agreement due to: (1) Executive's
dismissal; or (2) voluntary resignation following any demotion, loss of title,
office or significant authority or responsibility, reduction in any compensation
or benefits or relocation of his principal place of employment by more than 50
miles from its location immediately prior to the Change in Control, unless such
termination is because of his death or Termination for Cause.
(c) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Holding Company or its subsidiaries shall pay Executive, or in the event of
his subsequent death following such termination, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to three (3) times Executive's "Average Annual
Compensation" (as defined herein) for the five (5) most recent taxable years
that Executive has been employed by the Holding Company or its subsidiaries or
such number of years the Executive has been employed by the Holding Company if
less than five. At the election of the Executive, which election is to be made
prior to a Change in Control, such payment may be made in a lump sum as of the
Executive's Date of Termination. In the event that no election is made, payment
to the Executive will be made on a monthly basis during the remaining term of
5
the Agreement. Such payments shall not be reduced in the event Executive obtains
other employment following termination of employment.
(d) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Holding Company or its subsidiaries will cause to be continued life,
medical, dental and long-term disability coverage substantially equivalent to
the coverage maintained by the Holding Company or its Subsidiaries for Executive
at no premium cost to Executive prior to his severance. Such coverage and
payments shall cease upon the expiration of thirty-six (36) months.
6. CHANGE IN CONTROL RELATED PROVISIONS
Notwithstanding the paragraphs of Section 5, in no event shall the
aggregate payments or benefits to be made or afforded to Executive, under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under Section 280G of the Code or any successor thereto, and in order to avoid
such a result, Termination Benefits will be reduced, if necessary 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. The allocation of the reduction required
hereby among the Termination Benefits provided by the paragraphs of Section 5
shall be determined by the Executive.
7. TERMINATION FOR DISABILITY
(a) If, as a result of Executive's permanent incapacity due to injury or
sickness, such incapacity being determined by a doctor selected by the Holding
Company or its subsidiaries and the Executive, he shall have been absent from
his duties with the Holding Company or its subsidiaries on a full-time basis for
six (6) consecutive months, and within thirty (30) days after written notice of
potential termination is given he shall not have returned to the full-time
performance of his duties, the Holding Company may terminate Executive's
employment for "Disability."
(b) The Holding Company or its subsidiaries will pay Executive, as
disability pay, a an amount equal to one hundred percent (100%) of Executive's
bi-weekly rate of Base Salary on the effective date of such termination on a bi-
weekly basis. 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 Holding 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 Holding Company; (ii) Executive's
death; or (iii) the Executive reaching age 65. Notwithstanding any other
provisions to the contrary, any amounts due under this subsection (b) shall
first be reduced by any benefits payable to the Executive under a disability
insurance policy provided by the Holding Company or any amounts the Holding
Company pays to Executive in the event he returns on a part-time basis or in a
capacity other than that held immediately prior to being terminated for
Disability.
6
(c) The Holding Company or its subsidiaries will cause to be continued
life, medical, dental and disability coverage substantially identical to the
coverage maintained by the Holding Company for Executive prior to his
termination for Disability. Disability coverage under this subsection (c) and
payments shall cease upon the earlier of (i) the date Executive returns to the
full-time employment of the Holding Company in a position qualifying him for
benefits comparable to those received immediately prior to his Disability; (ii)
the Executive's death; or (iii) the Executive reaching the age of 65.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period which Executive is
incapable of performing his duties hereunder by reason of temporary disability.
8. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any 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 this Agreement. In determining incompetence, the acts
or omissions shall be measured against standards generally prevailing in the
savings institutions industry. Notwithstanding the foregoing, Executive shall
not be deemed to have been Terminated for Cause unless and until there shall
have been delivered to him a Notice of Termination that shall include a copy of
a resolution duly adopted by the affirmative vote of not less than a majority of
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 him,
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 reasons thereof in detail. The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause.
9. NOTICE.
(a) Any purported termination by the Holding Company or by Executive shall
be communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate 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 (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of
7
Termination (which, in the case of Termination for Cause, shall not be less than
thirty days from the date such Notice of Termination is given).
(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, except upon the occurrence of a
Change in Control and voluntary termination by the Executive in which case the
Date of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties or, by a binding arbitration award,
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 and
solely in accordance with Section 20 of this agreement. Notwithstanding the
pendency of any such dispute, in the event Executive is terminated for reasons
other than Termination for Cause, the Holding Company or its subsidiaries will
continue to pay Executive his full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary) and
continue him as a participant in all compensation, benefit and insurance plans
in which he was participating when the notice of dispute was given, 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. Amounts paid under this Section are in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
10. POST-TERMINATION OBLIGATIONS.
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 10 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Holding Company or its subsidiaries. Executive
shall, upon reasonable notice, furnish such information and assistance to the
Holding Company as may reasonably be required by the Holding Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.
11. NON-COMPETITION AND NON-DISCLOSURE.
(a) Upon any termination of Executive's employment hereunder pursuant to an
Event of Termination as provided in Section 4 hereof, Executive agrees not to
compete with the Holding Company or its subsidiaries for a period of one (1)
year following such termination in any city, town or county in which the Holding
Company or its subsidiaries have an office or have filed an application for
regulatory approval to establish an office, determined as of the effective date
of such termination except as otherwise agreed to pursuant to a resolution duly
adopted by the Board. Executive agrees that during such period and within said
cities, towns and counties, Executive shall not work in an executive capacity
for any financial institution whose business materially competes with the
depository, lending or other business activities of the Holding Company or its
subsidiaries. The parties hereto, recognizing that irreparable injury will
result to the Holding Company or its subsidiaries, its business and property in
the event of Executive's
8
breach of this Subsection 11 (a) agree that in the event of any such breach by
Executive, the Holding Company will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Nothing herein will be
construed as prohibiting the Holding Company from pursuing any other remedies
available to the Holding Company for such breach or threatened breach, including
the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Holding Company and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Holding Company. Executive will not,
following the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Holding Company or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever except as authorized by the Board. Notwithstanding
the foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Holding Company or its
subsidiaries. Further, Executive may disclose information regarding the
business activities of the Holding Company to the Office of Thrift Supervision
and the Federal Deposit Insurance Corporation pursuant to formal regulatory
requests. In the event of a breach or threatened breach by the Executive of the
provisions of this Section 11, the Holding Company will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Holding Company or affiliates thereof, or from rendering any services to any
person, firm, corporation, other entity to whom such knowledge, in whole or in
part, has been disclosed or is threatened to be disclosed. Nothing herein will
be construed as prohibiting the Holding Company from pursuing any other remedies
available to the Holding Company for such breach or threatened breach, including
the recovery of damages from Executive.
12. SOURCE OF PAYMENTS.
(a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Holding Company.
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement dated February 2, 1999,
between Executive and the Bank, such compensation payments and benefits paid by
the Bank will be subtracted from any amounts due simultaneously to Executive
under similar provisions of this Agreement. Payments pursuant to this Agreement
and the Bank Agreement shall be allocated in proportion to the services rendered
and time expended on such activities by Executive as determined by the Holding
Company and the Bank on a quarterly basis.
9
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto, except that this Agreement shall not affect or operate to reduce any
benefit or compensation inuring to the 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 him without
reference to this Agreement.
14. 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.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
15. 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 as to any act other than that specifically
waived.
16. REQUIRED PROVISIONS.
(a) The Holding Company may terminate the Executive's employment at any
time, but any termination by the Holding Company, other than Termination for
Cause, shall not prejudice Executive's right to compensation or other benefits
under this Agreement. Executive shall not have the right to receive compensation
or other benefits for any period after Termination for Cause as defined in
Section 8 herein above.
(b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Holding Company's affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. (S)1818(e)(3) or (g)(1), the Holding Company's obligations under this
contract shall be suspended as of the date of service,
10
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Holding Company may in its discretion (i) pay the Executive all
or part of the compensation withheld while their contract obligations were
suspended and (ii) reinstate (in whole or in part) any of the obligations which
were suspended.
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Holding Company's affairs by a notice
described in Section 16(b) hereof (the "Notice") during the term of this
Agreement and a Change in Control, as defined herein, occurs, the Holding
Company will assume its obligation to pay and Executive will be entitled to
receive all of the termination benefits provided for under Section 5 of this
Agreement upon the Holding Company's receipt of a dismissal of charges in the
Notice.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Holding Company's affairs by an order issued
under Section 8(e)(4) (12 U.S.C. (S)1818(e)(4) or 8(g)(1)) of the Federal
Deposit Insurance Act (12 U.S.C. (S)1818(e)(4) or (g)(1)), all obligations of
the Holding Company under this contract shall terminate as of the effective date
of the order, but vested rights of the contracting parties shall not be
affected.
(d) If the Holding Company is in default (as defined in Section 3(x)(1) (12
U.S.C. (S)1813(x)(1)) of the Federal Deposit Insurance Act) all obligations of
the Holding Company under this contract shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the
contracting parties.
(e) All obligations of the Holding Company under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Holding Company, (i) by the
Director or his or her designee at the time the Federal Deposit Insurance
Corporation enters into an agreement to provide assistance to or on behalf of
the Holding Company under the authority contained in section 13(c) of the
Federal Deposit Insurance Act, or (ii) by the Director or his or her designee at
the time the Director or his or her designee approves a supervisory merger to
resolve problems related to the operation of the Holding Company or when the
Holding Company is determined by the Director 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.
(f) Any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
(S)1828(k) and 12 C.F.R. (S) 545.121 and any rules and regulations promulgated
thereunder.
17. REINSTATEMENT OF BENEFITS UNDER SECTION 16(b).
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Holding Company's affairs by a notice
described in Section 16(b) hereof (the "Notice") during the term of this
Agreement and a Change in Control, as defined herein, occurs, the Holding
Company will assume its obligation to pay and Executive will be entitled to
receive
11
all of the termination benefits provided for under Section 5 of this Agreement
upon the Holding Company's receipt of a dismissal of charges in the Notice.
18. 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.
19. 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.
20. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New Jersey,
but only to the extent not superseded by Federal law.
21. 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 the employee within fifty
(50) miles from the location of the Holding Company, 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,
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.
In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back pay, including salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.
22. PAYMENT OF LEGAL FEES.
In the event any action is instituted by the Executive or the Holding
Company including under Section 21 of this Agreement all reasonable legal fees
and expenses shall be paid and reimbursed by the party who is not successful on
the merits as determined by a legal judgment, settlement or arbitration award.
12
23. INDEMNIFICATION.
The Holding 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) to the fullest extent 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 Holding
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 be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
24. SUCCESSOR TO THE HOLDING COMPANY.
The Holding Company 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 or the Holding Company,
expressly and unconditionally to assume and agree to perform the Holding
Company's obligations under this Agreement, in the same manner and to the same
extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
13
SIGNATURES
IN WITNESS WHEREOF, West Essex Bancorp, Inc., has caused this agreement to
be executed and its seal to be affixed hereunto by its duly authorized officers,
and Executive has signed this Agreement, on the 2nd day of February, 1999.
ATTEST: [SEAL] WEST ESSEX BANCORP, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________ By: __________________________
Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
For the Entire Board of Directors
WITNESS: EXECUTIVE
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________ By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
14
