EXHIBIT 10(f) 7
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of this 28th day of November, 2001 by and between PennFed Financial Services,
Inc. (the "Company") and Xxxxxxx X. Xxxxxxx (the "Employee").
WHEREAS, the Employee serves as the Senior Executive Vice President and
Chief Operating Officer of the Company and of the Company's wholly-owned
subsidiary, Penn Federal Saving Bank (the "Bank");
WHEREAS, the Employee has an existing employment agreement with the
Company entered into as of November 28, 2000 (the "Prior Employment Agreement")
which he is willing to terminate in consideration of this Agreement becoming
effective;
WHEREAS, the board of directors of the Company (the "Board of
Directors") believes it is in the best interests of the Company and its
subsidiaries for the Company to enter into this Agreement with the Employee in
order to assure continuity of management of the Company and its subsidiaries;
and
WHEREAS, the Board of Directors has approved and authorized the
execution of this Agreement with the Employee;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Definitions.
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(a) The term "Change in Control" means (1) an acquisition of
securities of the Company or the Bank that is determined by the Board of
Directors to constitute an acquisition of control of the Company or the Bank
within the meaning of the Change in Bank Control Act, 12 U.S.C. ss. 1817(j) and
the Savings and Loan Holding Company Act, 12U.S.C. ss.1467a, and applicable
regulations thereunder; (2) an event that would be required to be reported in
response to Item 1 of the current report on Form 8-K, as in effect on the
Effective Date, pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 0000 (xxx "Xxxxxxxx Xxx"); (3) 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
securities of the Company or the Bank representing 25% or more of the combined
voting power of the Company's or the Bank's outstanding securities; (4)
individuals who are members of the Board of Directors on the Effective Date (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the
Effective Date 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 Company's stockholders was approved by a nominating committee
serving under an Incumbent Board, shall be considered a member of the Incumbent
Board; or (5) approval by the Company's stockholders of a plan of
reorganization, merger or consolidation of the Company, sale of all or
substantially all of the assets of the Company, a similar transaction in which
the Company is not the resulting entity; provided that the term "change in
control" shall not include an acquisition of securities by an employee benefit
plan of the Bank or the Company. In the application of regulations under
the Change in Bank Control Act or the Savings and Loan Holding Company Act,
determinations to be made by the applicable federal banking regulator shall be
made by the Board of Directors.
(b) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company (or its successors) that are part of the
consolidated group of the Company (or its successors) for federal income tax
reporting.
(c) The term "Date of Termination" means the date upon which
the Employee's employment with the Company or the Bank or both ceases, as
specified in a notice of termination pursuant to Section 8 of this Agreement.
(d) The term "Effective Date" means November 28, 2001.
(e) The term "Involuntary Termination" means the termination
of the employment of Employee (i) by either the Company or the Bank or both
without his express written consent; or (ii) by the Employee by reason of a
material diminution of or interference with his duties, responsibilities or
benefits, including (without limitation) any of the following actions unless
consented to in writing by the Employee: (1) a requirement that the Employee be
based at any place other than West Orange, New Jersey, or within 35 miles
thereof, except for reasonable travel on Company or Bank business; (2) a
material demotion of the Employee; (3) a material reduction in the number or
seniority of personnel reporting to the Employee or a material reduction in the
frequency with which, or in the nature of the matters with respect to which such
personnel are to report to the Employee, other than as part of a Bank- or
Company-wide reduction in staff; (4) a reduction in the Employee's salary or a
material adverse change in the Employee's perquisites, benefits, contingent
benefits or vacation, other than prior to a Change in Control as part of an
overall program applied uniformly and with equitable effect to all members of
the senior management of the Bank or the Company; (5) a material permanent
increase in the required hours of work or the workload of the Employee; or (6)
the failure of the Board of Directors (or a board of directors of a successor of
the Company) to elect him as Senior Executive Vice President and Chief Operating
Officer of the Company (or a successor of the Company) or any action by the
Board of Directors (or a board of directors of a successor of the Company)
removing him from any of such offices, or the failure of the board of directors
of the Bank (or any successor of the Bank) to elect him as Senior Executive Vice
President and Chief Operating Officer of the Bank (or any successor of the Bank)
or any action by such board (or board of a successor of the Bank) removing him
from any of such offices. The term "Involuntary Termination" does not include
Termination for Cause or termination of employment due to death or permanent
disability pursuant to Section 7(g) of this Agreement, or suspension or
temporary or permanent prohibition from participation in the conduct of the
affairs of a depository institution under Section 8 of the Federal Deposit
Insurance Act.
(f) The terms "Termination for Cause" and "Terminated for
Cause" mean termination of the employment of the Employee with either the
Company or the Bank, as the case may be, because of the Employee's dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (excluding violations which do not have a material
adverse affect on the Company or the Bank) or final cease-and-desist order, or
(except as provided below) material breach of any provision of this Agreement.
No act or failure to act by the Employee shall be considered willful unless the
Employee acted or failed to act with an
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absence of good faith and without a reasonable belief that his action or failure
to act was in the best interest of the Company. The Employee shall not be deemed
to have been Terminated for Cause unless and until there shall have been
delivered to the Employee a copy of a resolution, duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board of Directors at a meeting of the Board duly called and held for such
purpose (after reasonable notice to the Employee and an opportunity for the
Employee, together with the Employee's counsel, to be heard before the Board),
stating that in the good faith opinion of the Board of Directors the Employee
has engaged in conduct described in the preceding sentence and specifying the
particulars thereof in detail. The opportunity of the Employee to be heard
before the Board shall not affect the right of the Employee to arbitration as
set forth in paragraph 17.
2. Term; Termination of Prior Employment Agreement. The term of this
Agreement shall be a period of five years commencing on the Effective Date,
subject to earlier termination as provided herein. On each anniversary of this
Agreement the term shall be extended for a period of one year in addition to the
then-remaining term, provided that the Company has not given notice to the
Employee in writing at least 90 days prior to such anniversary that the term of
this Agreement shall not be extended further, and provided further that the
Employee has not received an un-satisfactory performance review by either the
Board of Directors or the board of directors of the Bank. The Employee's Prior
Employment Agreement shall terminate immediately prior to the Effective Date.
3. Employment. The Employee is employed as the Senior Executive Vice
President and Chief Operating Officer of the Company and as the Senior Executive
Vice President and Chief Operating Officer of the Bank. As such, the Employee
shall render administrative and management services as are customarily performed
by persons situated in similar executive capacities, and shall have such other
powers and duties as the Board of Directors or the board of directors of the
Bank may prescribe from time to time. The Employee shall also render services to
any subsidiary or subsidiaries of the Company or the Bank as requested by the
Company or the Bank from time to time consistent with his executive position.
The Employee shall devote his best efforts and reasonable time and attention to
the business and affairs of the Company and the Bank to the extent necessary to
discharge his responsibilities hereunder. The Employee may (i) serve on
corporate or charitable boards or committees, and (ii) manage personal
investments, so long as such activities do not interfere materially with
performance of his responsibilities hereunder.
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4. Cash Compensation.
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(a) Salary. The Company agrees to pay the Employee during the
term of this Agreement a base salary (the "Company Salary") the annualized
amount of which shall be not less than the annualized aggregate amount of the
Employee's base salary from the Company and any Consolidated Subsidiaries in
effect at the Effective Date; provided that any amounts of salary actually paid
to the Employee by any Consolidated Subsidiaries shall reduce the amount to be
paid by the Company to the Employee. The Company Salary shall be paid no less
frequently than monthly and shall be subject to customary tax withholding. The
amount of the Employee's Company Salary shall be increased (but shall not be
decreased other than prior to a Change in Control as part of an overall program
applied uniformly and with equitable effect to all members of senior management
of the Company or the Bank) from time to time in accordance with the amounts of
salary approved by the Board of Directors or the board of directors of any of
the Consolidated Subsidiaries after the Effective Date.
(b) Bonuses. The Employee shall be entitled to participate in
an equitable manner with all other executive officers of the Company and the
Bank in such performance-based and discretionary bonuses, if any, as are
authorized and declared by the Board of Directors for executive officers of the
Company and by the board of directors of the Bank for executive officers of the
Bank.
(c) Expenses. The Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in performing
services under this Agreement in accordance with the policies and procedures
applicable to the executive officers of the Company and the Bank, provided that
the Employee accounts for such expenses as required under such policies and
procedures.
(d) Deferral of Non-Deductible Compensation. In the event that
the Employee's aggregate compensation (including compensatory benefits which are
deemed remuneration for purposes of Section 162(m) of the Internal Revenue Code
of 1986 as amended (the "Code")) from the Company and the Consolidated
Subsidiaries for any calendar year exceeds the greater of (i) $1,000,000 or (ii)
the maximum amount of compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section 162(m) of the Code
(the "maximum allowable amount"), then any such amount in excess of the maximum
allowable amount shall be mandatorily deferred with interest thereon at 8% per
annum, compounded annually, to a calendar year such that the amount to be paid
to the Employee in such calendar year, including deferred amounts and interest
thereon, does not exceed the maximum allowable amount. Subject to the foregoing,
deferred amounts including interest thereon shall be payable at the earliest
time permissible. All unpaid deferred amounts shall be paid to the Employee not
later than his Date of Termination unless his Date of Termination is on a
December 31st, in which case, the unpaid deferred amounts shall be paid to the
Employee on the first business day of the next succeeding calendar year. The
provisions of this subsection shall survive any termination of the Employee's
employment and any termination of this Agreement.
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5. Benefits.
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(a) Participation in Benefit Plans. The Employee shall be
entitled to participate, to the same extent as executive officers of the Company
and the Bank generally, in all plans of the Company and the Bank relating to
pension, retirement, thrift, profit-sharing, savings, group or other life
insurance, hospitalization, medical and dental coverage, travel and accident
insurance, education, cash bonuses, and other retirement or employee benefits or
combinations thereof. In addition, the Employee shall be entitled to be
considered for benefits under all of the stock and stock option related plans in
which the Company's or the Bank's executive officers are eligible or become
eligible to participate.
(b) Fringe Benefits. The Employee shall be eligible to
participate in, and receive benefits under, any other fringe benefit plans or
perquisites which are or may become generally available to the Company's or the
Bank's executive officers, including but not limited to supplemental retirement,
incentive compensation, supplemental medical or life insurance plans, company
cars, club dues, physical examinations, financial planning and tax preparation
services.
6. Vacations; Leave. The Employee shall be entitled to annual paid
vacation in accordance with the policies established by the Board of Directors
and the board of directors of the Bank for executive officers, in no event less
than four weeks per year, and to voluntary leaves of absence, with or without
pay, from time to time at such times and upon such conditions as the Board of
Directors may determine in its discretion.
7. Termination of Employment.
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(a) Involuntary Termination. If the Employee experiences an
Involuntary Termination, such termination of employment shall be subject to the
Company's obligations under this Section 7. In the event of the Involuntary
Termination of the Employee, if the Employee has offered to continue to provide
the services contemplated by and on the terms provided in this Agreement and
such offer has been declined, subject to Section 7(b) of this Agreement, the
Company shall, during the lesser period of the remaining term of this Agreement
or three years following the Date of Termination (the "Liquidated Damage
Period"), as liquidated damages (i) pay to the Employee monthly one-twelfth of
the Company Salary at the annual rate in effect immediately prior to the Date of
Termination and one-twelfth of the average annual amount of cash bonus and cash
incentive compensation of the Employee, based on the average amounts of such
compensation earned by the Employee from the Company and the Bank for the two
full fiscal years preceding the Date of Termination; and (ii) maintain
substantially the same group life or key man life insurance, hospitalization,
medical, dental, prescription drug and other health benefits, and long-term
disability insurance (if any) for the benefit of the Employee and his dependents
and beneficiaries who would have been eligible for such benefits if the Employee
had not suffered Involuntary Termination and on terms substantially as favorable
to the Employee including amounts of coverage and deductibles and other costs to
him in effect immediately prior to such Involuntary Termination (the "Employee's
Health Coverage").
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(b) Reduction of the Company's Obligations Under Section 7(a).
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(1) In the event that the Employee becomes entitled
to liquidated damages pursuant to Section 7(a), (i) the Company's obligation
thereunder with respect to cash damages shall be reduced by the amount of the
Employee's cash income, if any, earned from providing personal services during
the Liquidated Damage Period; and (ii) the Company's obligation to maintain
Health Coverage shall be reduced to the extent, if any, that the Employee
receives such benefits, on no less favorable terms, from another employer during
the Liquidated Damage Period. For purposes of this Section 7(b), the term "cash
income" shall include amounts of salary, wages, bonuses, incentive compensation
and fees paid to the Employee in cash but shall not include shares of stock,
stock options, stock appreciation rights or other earned income not paid to the
Employee in cash. To the extent the provisions of this Section 7(b)(1) are
applicable and an overpayment has been made to the Employee as of the expiration
of Liquidated Damage Period, the Employee shall reimburse the Company in an
amount equal to the after tax benefit realized by the Employee from such
overpayment (i.e. amount realized net of all federal, state, local, employment
and medicare taxes). In making the reimbursement calculation it shall be
presumed that the Employee is subject to the highest marginal federal and state
income tax rates.
(2) The Employee agrees that in the event he becomes
entitled to liquidated damages pursuant to Section 7(a), throughout the
Liquidated Damage Period, he shall promptly inform the Company of the nature and
amounts of cash income and the type of health benefits and coverage which he
earns or receives from providing personal services, and shall provide such
documentation of such cash income and such health benefits and coverage as the
Company may request. In the event of changes to such cash income or such health
benefits or coverage from time to time, the Employee shall inform the Company of
such changes, in each case within five days after the change occurs, and shall
provide such documentation concerning the change as the Company may request.
(c) Change in Control; Cut Back; and Tax Gross Up. In the
event that the Employee experiences an Involuntary Termination within the 6
months preceding, at the time of, or within 24 months following a Change in
Control, in addition to the Company's obligations under Section 7(a) of this
Agreement, the Company shall pay to the Employee in cash, within 30 days after
the later of the date of such Change in Control or the Date of Termination, an
amount equal to 299% of the Employee's "base amount" as determined under Section
280G of the Code, less the acceleration and lapse value of options granted to
the Employee by the Company that are taken into account in the determination of
"parachute payments" under 280G(b)(2) of the Code by virtue of vesting
acceleration or deemed vesting acceleration in connection with such Change in
Control. In the event the Employee is requested in connection with or at the
time of a Change in Control to continue employment for an interim period and he
shall die while employed during such interim period, then his estate, or such
person as the Employee may have previously designated in writing, shall be
entitled to the full Change in Control payment described in this paragraph.
While it is not contemplated that the Employee will
receive any amounts or benefits that will constitute "excess parachute payments"
under Section 280G of the Code, in the event that any payments or benefits
provided or to be provided to the Employee pursuant to this Agreement, in
combination with payments or benefits, if any, from other plans or arrangements
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maintained by the Company or any of the Consolidated Subsidiaries, constitute
"excess parachute payments" under Section 280G of the Code that are subject to
excise tax under Section 4999 of the Code, the Company shall pay to the Employee
in cash an additional amount equal to the amount of the Gross Up Payment (as
hereinafter defined). The "Gross Up Payment" shall be the amount needed to
ensure that the amount of such payments and the value of such benefits received
by the Employee (net of such excise tax and any federal, state and local tax on
the Company's payment to him attributable to such excise tax) equals the amount
of such payments and value of such benefits as he would receive in the absence
of such excise tax and any federal, state and local tax on the Company's payment
to him attributable to such excise tax. The Company shall pay the Gross Up
Payment within 30 days after the Date of Termination. For purposes of
determining the amount of the Gross Up Payment, the value of any non-cash
benefits and deferred payments or benefits shall be determined by the Company's
independent auditors in accordance with the principles of Section 280G(d)(3) and
(4) of the Code. In the event that, after the Gross Up Payment is made, the
amount of the excise tax is determined to be less than the amount calculated in
the determination of the actual Gross Up Payment made by the Company, the
Employee shall repay to the Company, at the time that such reduction in the
amount of excise tax is finally determined, the portion of the Gross Up Payment
attributable to such reduction, plus interest on the amount of such repayment at
the applicable federal rate under Section 1274 of the Code from the date of the
Gross Up Payment to the date of the repayment. The amount of the reduction of
the Gross Up Payment shall reflect any subsequent reduction in excise taxes
resulting from such repayment. In the event that, after the Gross Up Payment is
made, the amount of the excise tax is determined to exceed the amount
anticipated at the time the Gross Up Payment was made, the Company shall pay to
the Employee, in immediately available funds, at the time that such additional
amount of excise tax is finally determined, an additional payment ("Additional
Gross Up Payment") equal to such additional amount of excise tax and any
federal, state and local taxes thereon, plus all interest and penalties, if any,
owned by the Employee with respect to such additional amount of excise and other
tax. The Company shall have the right to challenge, on the Employee's behalf,
any excise tax assessment against him as to which the Employee is entitled to
(or would be entitled if such assessment is finally determined to be proper) a
Gross Up Payment or Additional Gross Up Payment, provided that all costs and
expenses incurred in such a challenge shall be borne by the Company and the
Company shall indemnify the Employee and hold him harmless, on an after-tax
basis, from any excise or other tax (including interest and penalties with
respect thereto) imposed as a result of such payment of costs and expenses by
the Company.
(d) Termination for Cause. In the event of Termination for
Cause, the Company shall have no further obligation to the Employee under this
Agreement after the Date of Termination other than deferred amounts under
Section 4(d).
(e) Voluntary Termination. The Employee may terminate his
employment voluntarily at any time by a notice pursuant to Section 8 of this
Agreement. In the event that the Employee voluntarily terminates his employment
other than by reason of any of the actions that constitute Involuntary
Termination under Section 1(e)(ii) of this Agreement ("Voluntary Termination"),
the Company shall be obligated to the Employee for the amount of his Company
Salary and benefits only through the Date of Termination, at the time such
payments are due, and the Company shall have no further obligation to the
Employee under this Agreement except as provided in Section 4(d).
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(f) Death. In the event of the death of the Employee while
employed under this Agreement and prior to any termination of employment, the
Company shall pay to the Employee's estate, or such person as the Employee may
have previously designated in writing, (i) the Company Salary which was not
previously paid to the Employee through the last day of the calendar month in
which Employee's death occurred and, if applicable, the Change in Control
payment set forth in the first paragraph of Section 7(c), provided Employee died
within six months prior or 24 months following such change in control; (ii) the
amounts of any benefits or awards which, pursuant to the terms of any applicable
plan or plans, were earned with respect to the fiscal year in which the Employee
died and which the Employee would have been entitled to receive if he had
continued to be employed, and the amount of any bonus or incentive compensation
for such fiscal year which the Employee would have been entitled to receive if
he had continued to be employed, pro-rated in accordance with the portion of the
fiscal year prior to his death, provided that such amounts shall be payable when
and as ordinarily payable under the applicable plans; and (iii) the unpaid
deferred amounts under Section 4(d).
(g) Permanent Disability. For purposes of this Agreement, the
term "permanently disabled" means that the Employee has a mental or physical
infirmity which permanently impairs his ability to perform substantially his
duties and responsibilities under this Agreement and which results in (i)
eligibility of the Employee under the long-term disability plan of the Company
or the Bank, if any; or (ii) inability of the Employee to perform substantially
his duties and responsibilities under this Agreement for a period of 180
consecutive days. Either the Company or the Bank or both may terminate the
employment of the Employee after having established that the Employee is
permanently disabled.
(h) Regulatory Action. Notwithstanding any other provisions of
this Agreement:
(1) If the Employee is removed and/or permanently
prohibited from participating in the conduct of the affairs of a depository
institution by an order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e)(4) and (g)(1), all
obligations of the Company under this Agreement shall terminate as of the
effective date of the order, but vested rights of the contracting parties shall
not be affected;.
(2) If the Bank is in default (as defined in Section
3(x)(1) of the FDIA), all obligations of the Company under this Agreement shall
terminate as of the date of default, but this provision shall not affect any
vested rights of the contracting parties; and
(3) All obligations of the Company under this
Agreement shall be terminated, except to the extent determined that continuation
of this Agreement is necessary for the continued operation of the Bank: (i) by
the Director of the Office of Thrift Supervision (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 Bank under the authority
contained in Section 13(c) of the FDIA; 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 operation of the Bank or when the Bank 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 any
such action.
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8. Notice of Termination. In the event that the Company or the Bank, or
both, desire to terminate the employment of the Employee during the term of this
Agreement, the Company or the Bank, or both, shall deliver to the Employee a
written notice of termination, stating whether such termination constitutes
Termination for Cause or Involuntary Termination, setting forth in reasonable
detail the facts and circumstances that are the basis for the termination, and
specifying the date upon which employment shall terminate, which date shall be
at least 30 days after the date upon which the notice is delivered, except in
the case of Termination for Cause. In the event that the Employee determines in
good faith that he has experienced an Involuntary Termination of his employment,
he shall send a written notice to the Company stating the circumstances that
constitute such Involuntary Termination and the date upon which his employment
shall have ceased due to such Involuntary Termination. In the event that the
Employee desires to effect a Voluntary Termination, he shall deliver a written
notice to the Company, stating the date upon which employment shall terminate,
which date shall be at least 30 days after the date upon which the notice is
delivered, unless the parties agree to a date sooner.
9. Attorneys Fees. The Company shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Employee as a result of (i) the Employee's contesting or disputing any
termination of employment, or (ii) the Employee's seeking to obtain or enforce
any right or benefit provided by this Agreement or by any other plan or
arrangement maintained by the Company (or its successors) or the Consolidated
Subsidiaries under which the Employee is or may be entitled to receive benefits;
provided that the Company's obligation to pay such fees and expenses is subject
to the Employee's prevailing with respect to the matters in dispute in any
action initiated by the Employee or the Employee's having been determined to
have acted reasonably and in good faith with respect to any action initiated by
the Company or the Bank.
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10. Non-Disclosure and Non-Solicitation.
(a) Non-Disclosure. The Employee acknowledges that he has
acquired, and will continue to acquire while employed by the Company and/or any
Consolidated Subsidiary, special knowledge of the business, affairs, strategies
and plans of the Company and the Consolidated Subsidiaries which has not been
disclosed to the public and which constitutes confidential and proprietary
business information owned by the Company and the Consolidated Subsidiaries,
including but not limited to, information about the customers, customer lists,
software, data, formulae, processes, inventions, trade secrets, marketing
information and plans, and business strategies of the Company and the
Consolidated Subsidiaries, and other information about the products and services
offered or developed or planned to be offered or developed by the Company and/or
the Consolidated Subsidiaries ("Confidential Information"). The Employee agrees
that, without the prior written consent of the Company, he shall not, during the
term of his employment or at any time thereafter, in any manner directly or
indirectly disclose any Confidential Information to any person or entity other
than the Company and the Consolidated Subsidiaries. Notwithstanding the
foregoing, if the Employee is requested or required (including but not limited
to by oral questions, interrogatories, requests for information or documents in
legal proceeding, subpoena, civil investigative demand or other similar process)
to disclose any Confidential Information the Employee shall provide the Company
with prompt written notice of any such request or requirement so that the
Company and/or a Consolidated Subsidiary may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this Section
10(a). If, in the absence of a protective order or other remedy or the receipt
of a waiver from the Company, the Employee is nonetheless legally compelled to
disclose Confidential Information to any tribunal or else stand liable for
contempt or suffer other censure or penalty, the Employee may, without liability
hereunder, disclose to such tribunal only that portion of the Confidential
Information which is legally required to be disclosed, provided that the
Employee exercise his best efforts to preserve the confidentiality of the
Confidential Information, including without limitation by cooperating with the
Company and/or a Consolidated Subsidiary to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
the Confidential Information by such tribunal. On the Date of Termination, the
Employee shall promptly deliver to the Company all copies of documents or other
records (including without limitation electronic records) containing any
Confidential Information that is in his possession or under his control, and
shall retain no written or electronic record of any Confidential Information.
(b) Non-Solicitation. During the three year period next
following the Date of Termination, the Employee shall not directly or indirectly
solicit, encourage, or induce any person while employed by the Company or any
Consolidated Subsidiary to (i) leave the Company or any Consolidated Subsidiary,
(ii) cease his or her employment with the Company or any Consolidated Subsidiary
or (iii) accept employment with another entity or person.
The provisions of this Section 10 shall survive any termination of the
Employee's employment and any termination of this Agreement.
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11. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Company shall require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) by
an assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession or assignment had taken place. Failure of the Company to obtain such
an assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation and benefits from the Company in the same amount and on the same
terms as provided for an Involuntary Termination under Section 7 hereof. For
purposes of implementing the provisions of this Section 11(a), the date on which
any such succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
12. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, to the Company at its home
office, to the attention of the Board of Directors with a copy to the Secretary
of the Company, or, if to the Employee, to such home or other address as the
Employee has most recently provided in writing to the Company.
13. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
14. Headings. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Governing Law. This Agreement shall be governed by the laws of the
State of New Jersey.
17. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement (other than relating to the enforcement of the
provisions of Section 10) shall be settled exclusively by arbitration 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.
18. Equitable and Other Judicial Relief. In the event of an actual or
threatened breach by the Employee of any of the provisions of Section 10, the
Company shall be entitled to
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equitable relief in the form of an injunction from a court of competent
jurisdiction and such other equitable and legal relief as such court deems
appropriate under the circumstances. The parties agree that the Company shall
not be required to post any bond in connection with the grant or issuance of an
injunction (preliminary, temporary and/or permanent) by a court of competent
jurisdiction, and if a bond is nevertheless required, the parties agree that it
shall be in a nominal amount. The parties further agree that in the event of a
breach by the Employee of any of the provisions of Section 10, the Company will
suffer irreparable damage and its remedy at law against the Employee is
inadequate to compensate it for such damage.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Attest: PennFed Financial Services, Inc.
/s/ Xxxxxxx X. Xxxxxxxx
--------------------- ---------------------------
Secretary By: Xxxxxxx X. Xxxxxxxx
Its: Chairman
Employee
/s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx
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