8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 12, 1999
PULASKI BANCORP, INC.
(Exact name of Registrant as specified in its Charter)
Federal 0- 22-3652847
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
130 Mountain Avenue, Springfield, New Jersey 07081
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 564-9000
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Item 1. Changes in Control of Registrant
On July 12, 1999, Pulaski Bancorp, Inc. (the "Company") became a
savings and loan holding company in accordance with the terms of an Agreement
and Plan of Reorganization (the "Agreement"), by and between Pulaski Savings
Bank (the "Bank"), a federally chartered stock savings bank, Pulaski Interim
Savings Bank ("Interim"), a savings and loan chartered interim stock savings
association, and the Company, a federally chartered stock corporation. Pursuant
to the Agreement: (1) the Company was organized as a wholly owned subsidiary of
the Bank; (2) Interim was organized as a wholly owned subsidiary of the Company;
(3) Interim merged with and into the Bank, with the Bank as the surviving
institution, and (4) upon such merger, (i) the outstanding shares of common
stock, par value $.01 per share, of the Bank became, by operation of law, on a
one-for-one basis, common stock, par value $.01 per share, of the Company, (ii)
the common stock of Interim held by the Company was converted into common stock
of the Bank and (iii) the common stock of the Company held by the Bank was
canceled. Accordingly, the Bank became a wholly owned subsidiary of the Company
and the shareholders of the Bank, including Pulaski Bancorp, M.H.C., the Bank's
federally chartered mutual holding company, became shareholders of the Company.
The common stock of the Bank was previously registered under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
with the OTS. Pursuant to Rule 12g-3 promulgated under the Exchange Act, the
Company's common stock is deemed automatically registered under the Exchange
Act. In addition, the common stock of the Company has been substituted for the
common stock of the Bank on the Nasdaq SmallCap Market under the symbol "PLSK."
Item 7. Financial Statements, Pro Forma Information and Exhibits
The Index of Exhibits immediately precedes the attached exhibits.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PULASKI BANCORP, INC.
Date: July 12, 1999 By: /s/ Thomas Bentkowski
-------------------------------------
Thomas Bentkowski
President and Chief Executive Officer
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EXHIBIT INDEX
The following exhibits are filed as part of this report:
Exhibit 2.0 Agreement and Plan of Reorganization
Exhibit 3.1 Charter of Pulaski Bancorp, Inc.
Exhibit 3.2 Bylaws of Pulaski Bancorp, Inc.
Exhibit 4.0 Form of Common Stock Certificate
Exhibit 10.1 Employment Agreement by and between Pulaski Bancorp,
M.H.C., Pulaski Savings Bank and Thomas Bentkowski
Exhibit 10.2 Employment Agreement by and between Pulaski Bancorp,
M.H.C., Pulaski Savings Bank and Lee Wagstaff
Exhibit 10.3 Change in Control Agreement by and between Pulaski Bancorp,
M.H.C., Pulaski Savings Bank and Kevin Aylward
Exhibit 10.4 Change in Control Agreement by and between Pulaski Bancorp,
M.H.C., Pulaski Savings Bank and Valerie Kaminski
Exhibit 10.5 Amended and Restated Pulaski Savings Bank 1997 Stock-Based
Incentive Plan
Exhibit 10.6 Pulaski Savings Bank Employee Stock Ownership Plan Trust
Agreement
APPENDIX A
PULASKI SAVINGS BANK
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated January 28, 1999, is
by and between PULASKI SAVINGS BANK, a federally chartered stock savings bank
(the "Bank"); PULASKI BANCORP, INC., a federal corporation (in organization)
(the "Stock Holding Company"); and PULASKI INTERIM SAVINGS BANK, a to-be-formed
interim federal stock savings bank ("Interim").
The parties hereto desire to enter into an Agreement and Plan of
Reorganization whereby the corporate structure of the Bank will be reorganized
into the stock holding company form of ownership. The result of such
reorganization will be that immediately after the Effective Date (as defined in
Article V below), all of the issued and outstanding shares of common stock, par
value $1.00 per share, of the Bank will be held by the Stock Holding Company,
and the holders of the issued and outstanding shares of common stock of the Bank
will become the holders of the issued and outstanding shares of common stock of
the Stock Holding Company.
The reorganization of the Bank will be accomplished by the following
steps: (1) the formation of the Stock Holding Company as a wholly owned
subsidiary of the Bank; (2) the formation of an interim federally chartered
stock savings bank ("Interim"), which will be wholly owned by the Stock Holding
Company; and (3) the merger of Interim into the Bank, with the Bank as the
surviving corporation. Pursuant to such merger: (i) each of the issued and
outstanding shares of common stock of the Bank will be converted by operation of
law into an equal number of issued and outstanding shares of common stock of the
Stock Holding Company; (ii) each of the issued and outstanding shares of common
stock of Interim will be converted automatically by operation of law into an
equal number of issued and outstanding shares of common stock of the Bank; and
(iii) the shares of common stock of the Stock Holding Company held by the Bank
will be canceled.
NOW, THEREFORE, in order to consummate this Agreement and Plan of
Reorganization, and in consideration of the mutual covenants herein set forth,
the parties agree as follows:
ARTICLE I
MERGER OF INTERIM INTO
THE BANK AND RELATED MATTERS
1.1 On the Effective Date, Interim will be merged with and into the
Bank (the "Merger") and the separate existence of Interim shall cease, and all
assets and property (real, personal and
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mixed, tangible and intangible, chooses in action, rights and credits) then
owned by Interim, or which would inure to it, shall immediately and
automatically, by operation of law and without any conveyance, transfer, or
further action, become the property of the Bank. The Bank shall be deemed to be
a continuation of Interim, and the Bank shall succeed to the rights and
obligations of Interim.
1.2 Following the Merger, the existence of the Bank shall continue
unaffected and unimpaired by the Merger, with all the rights, privileges,
immunities and powers, and subject to all the duties and liabilities, of a
savings bank organized under federal law. The Charter and Bylaws of the Bank, as
presently in effect, shall continue in full force and effect and shall not be
changed in any manner whatsoever by the Merger.
1.3 From and after the Effective Date, and subject to the actions of
the Board of Directors of the Bank, the business presently conducted by the Bank
(whether directly or through its subsidiaries) will continue to be conducted by
it, as a wholly owned subsidiary of Stock Holding Company, and the present
directors and officers of the Bank will continue in their present positions. The
home office and branch offices of the Bank in existence immediately prior to the
Effective Date shall continue to be the home office and branch offices,
respectively, of the Bank from and after the Effective Date.
ARTICLE II
CONVERSION OF STOCK
2.1 The terms and conditions of the Merger, the mode of carrying the
same into effect, and the manner and basis of converting the common stock of the
Bank into common stock of the Stock Holding Company pursuant to this Agreement
shall be as follows:
A. On the Effective Date, each share of common stock, par
value $0.01 per share, of the Bank issued and outstanding immediately prior to
the Effective Date shall automatically by operation of law be converted into and
shall become one share of common stock, par value $0.01 per share, of the Stock
Holding Company (the "Stock Holding Company Common Stock") Each share of common
stock of Interim issued and outstanding immediately prior to the Effective Date
shall, on the Effective Date, automatically by operation of law be converted
into and become one share of common stock, $1.00 par value per share, of the
Bank and shall not be further converted into shares of the Stock Holding
Company, so that from and after the Effective Date all of the issued and
outstanding shares of common stock of the Bank shall be held by the Stock
Holding Company.
B. On the Effective Date, any stock based benefit plans of the
Bank (the "Benefit Plans") in effect at the Effective Date shall automatically,
by operation of law, be continued as Benefit Plans of the Bank and/or the Stock
Holding Company. Each option to purchase shares of the Bank common stock under
the Bank's stock option plan outstanding at that time will be
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automatically converted into an identical option, with identical price, terms
and conditions, to purchase an identical number of shares of Stock Holding
Company Common Stock in lieu of shares of the Bank common stock. The Stock
Holding Company and the Bank may make appropriate amendments to the Benefit
Plans to reflect the adoption of the Benefit Plans as the plans of the Stock
Holding Company, without adverse effect on the Benefit Plans and their
participants.
C. From and after the Effective Date, each holder of an
outstanding certificate or certificates that, prior thereto, represented shares
of the Bank common stock, shall, upon surrender of the same to the designated
agent of the Bank, be entitled to receive in exchange therefor a certificate or
certificates representing the number of whole shares of Stock Holding Company
Common Stock into which the shares theretofore represented by the certificate or
certificates so surrendered shall have been converted, as provided in the
foregoing provisions of this Section 2.1. Until so surrendered, each such
outstanding certificate which, prior to the Effective Date, represented shares
of the Bank common stock shall be automatically deemed for all purposes to
evidence the ownership of the equal number of whole shares of Stock Holding
Company Common Stock. Former holders of shares of the Bank common stock will not
be required to exchange their Bank common stock certificates for new
certificates evidencing the same number of shares of Stock Holding Company
Common Stock. If in the future the Stock Holding Company determines to effect an
exchange of stock certificates, instructions will be sent to all holders of
record of Stock Holding Company Common Stock.
D. All shares of Stock Holding Company Common Stock into which
shares of the Bank common stock shall have been converted pursuant to this
Article II shall be deemed to have been issued in full satisfaction of all
rights pertaining to such converted shares.
E. On the Effective Date, the holders of certificates formerly
representing the Bank common stock outstanding on the Effective Date shall cease
to have any rights with respect to the common stock of the Bank, and their sole
rights shall be with respect to the Stock Holding Company Common Stock into
which their shares of the Bank common stock shall have been converted by the
Merger.
ARTICLE III
CONDITIONS
3.1 The obligations of the Bank, Stock Holding Company and Interim to
effect the Merger and otherwise consummate the transactions which are the
subject matter hereof shall be subject to satisfaction of the following
conditions:
A. To the extent required by applicable law, rules, and
regulations, the holders of the outstanding shares of the Bank common stock
shall, at a meeting of the stockholders of the
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Bank duly called, have approved this Agreement by the necessary required
affirmative vote (under federal law) of the outstanding shares of the Bank
common stock.
B. Any and all approvals from the Office of Thrift Supervision
(the "OTS"), the Securities and Exchange Commission and any other state or
federal governmental agency having jurisdiction necessary for the lawful
consummation of the Merger and the issuance and delivery of Stock Holding
Company Common Stock as contemplated by this Agreement shall have been obtained.
C. The Bank shall have received either (i) a ruling from the
Internal Revenue Service or (ii) an opinion from its legal counsel, to the
effect that the Merger will be treated as a non-taxable transaction under
applicable provisions of the Internal Revenue Code of 1986, as amended, and that
no gain or loss will be recognized by the stockholders of the Bank upon the
exchange of the Bank common stock held by them solely for Stock Holding Company
Common Stock.
ARTICLE IV
TERMINATION
4.1 This Agreement may be terminated at the election of any of the
parties hereto if any one or more of the conditions to the obligations of any of
them hereunder if any one or more of the conditions to the obligations of any of
them hereunder shall not have been satisfied and shall have become incapable of
fulfillment and shall not be waived. This Agreement may also be terminated at
any time prior to the Effective Date by the mutual consent of the respective
Boards of Directors of the parties.
4.2 In the event of the termination of this Agreement pursuant to any
of the foregoing provisions, no party shall have any further liability or
obligation of any nature to any other party under this Agreement.
ARTICLE V
EFFECTIVE DATE OF MERGER
Upon satisfaction or waiver (in accordance with the provisions of this
Agreement) of each of the conditions set forth in Article III, the parties
hereto shall execute and cause to be filed the Merger Agreement and such
certificates or further documents as shall be required by the OTS and applicable
state laws and with such other federal or state regulatory agencies as may be
required. Upon approval by the OTS and endorsement of such Merger Agreement by
the OTS and, if necessary, applicable state authorities, the Merger and other
transactions contemplated by
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this Agreement shall become effective. The Effective Date for all purposes
hereunder shall be the date of such endorsement by the OTS.
ARTICLE VI
MISCELLANEOUS
6.1 Any of the terms or conditions of this Agreement, which may legally
be waived, may be waived at any time by any party hereto that is entitled to the
benefit thereof, or any of such terms or conditions may be amended or modified
in whole or in part at any time, to the extent authorized by applicable law, by
an agreement in writing, executed in the same manner as this Agreement.
6.2 Any of the terms or conditions of this Agreement may be amended or
modified in whole or in part at any time, to the extent permitted by applicable
law, rules, and regulations, by an amendment in writing, provided that any such
amendment or modification is not materially adverse to the Bank, the Stock
Holding Company or their stockholders. In the event that any governmental agency
requests or requires that the transactions contemplated herein be modified in
any respect as a condition of providing a necessary regulatory approval or
favorable ruling, or that in the opinion of counsel such modification is
necessary to obtain such approval or ruling, this Agreement may be modified, at
any time before or after adoption thereof by the stockholders of the Bank, by an
instrument in writing, provided that the effect of such amendment would not be
materially adverse to the Bank, the Stock Holding Company or their stockholders.
6.3 This Agreement shall be governed by and construed under the laws of
the United States.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Reorganization as of the date first above written.
PULASKI SAVINGS BANK
/s/ Thomas Bentkowski
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Thomas Bentkowski
President and Chief Executive Officer
PULASKI BANCORP, INC.
/s/ Thomas Bentkowski
-------------------------------------
Thomas Bentkowski
President and Chief Executive Officer
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PULASKI INTERIM SAVINGS BANK
/s/ Thomas Bentkowski
-------------------------------------
Thomas Bentkowski
President and Chief Executive Officer
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ATTACHMENT A-1
FEDERAL MHC SUBSIDIARY HOLDING COMPANY CHARTER
FOR
PULASKI BANCORP, INC.
Section 1. Corporate Title.
The full corporate title of the MHC subsidiary holding company is
Pulaski Bancorp, Inc. (the "Holding Company").
Section 2. Domicile.
The domicile of the Holding Company is in the city of Springfield, in
the State of New Jersey.
Section 3. Duration.
The duration of the Holding Company is perpetual.
Section 4. Purpose and Powers.
The purpose of the Holding Company is to pursue any or all of the
lawful objectives of a federal mutual holding company chartered under Section
10(o) of the Home Owners' Loan Act, 12 U.S.C. 1467a(o), and to exercise all the
express, implied, and incidental powers conferred thereby and by all acts
amendatory thereof and supplemental thereto, subject to the Constitution and
laws of the United States as they are now in effect, or as they may hereafter be
amended, and subject to all lawful and applicable rules, regulations, and orders
of the Office of Thrift Supervision ("Office").
Section 5. Capital Stock.
The total number of shares of all classes of the capital stock which
the Holding Company has authority to issue is fifteen million shares
(15,000,000), of which thirteen million shares (13,000,000) shall be common
stock, par value $.01 per share and of which two million shares (2,000,000)
shall be preferred stock, par value $.01 per share. The shares may be issued
from time to time as authorized by the Board of Directors without further
approval of shareholders except as otherwise provided in this Section 5 or to
the extent that such approval is required by governing law, rule, or regulation.
The consideration for the issuance of the shares shall be paid in full before
their issuance and shall not be less than the par value. Neither promissory
notes nor future services shall constitute payment or part payment for the
issuance of shares of the Holding Company. The consideration for the shares
shall be cash, tangible or intangible property (to the extent direct investment
in such property would be permitted), labor, or services actually performed for
the Holding Company, or any combination of the foregoing. In the absence of
actual fraud in the transaction, the value of such property, labor, or services,
as determined by the Board of Directors of the Holding Company, shall be
conclusive. Upon payment of such consideration, such shares
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shall be deemed to be fully paid and nonassessable. In the case of a stock
dividend, that part of the surplus of the Holding Company which is transferred
to common stock or paid-in capital accounts upon the issuance of shares as a
stock dividend shall be deemed to be the consideration for their issuance.
Except for shares issued in the initial organization of the Holding
Company, no shares of capital stock (including shares issuable upon conversion,
exchange, or exercise of other securities) shall be issued, directly or
indirectly, to officers, directors, or controlling persons of the Holding
Company other than as part of a general public offering or as qualifying shares
to a director, unless their issuance or the plan under which they would be
issued has been approved by a majority of the total votes eligible to be cast at
a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or series of capital stock to
vote as a separate class or series or to more than one vote per share: provided,
that this restriction on voting separately by class or series shall not apply:
(i) to any provision which would authorize the holders of
preferred stock, voting as a class or series, to elect some
members of the Board of Directors, less than a majority
thereof, in the event of default in the payment of dividends
on any class or series of preferred stock;
(ii) to any provision which would require the holders of preferred
stock, voting as a class or series, to approve the merger or
consolidation of the Holding Company with another corporation
or the sale, lease, or conveyance (other than by mortgage or
pledge) of properties or business in exchange for securities
of a corporation other than the Holding Company if the
preferred stock is exchanged for securities of such other
corporation: provided, that no provision may require such
approval for transactions undertaken with the assistance or
pursuant to the direction of the Office or the Federal Deposit
Insurance Corporation;
(iii) to any amendment which would adversely change the specific
terms of any class or series of capital stock as set forth in
this Section 5 (or in any supplementary sections hereto),
including any amendment which would create or enlarge any
class or series ranking prior thereto in rights and
preferences. An amendment which increases the number of
authorized shares of any class or series of capital stock, or
substitutes the surviving Holding Company in a merger or
consolidation for the Holding Company, shall not be considered
to be such an adverse change.
A description of the different classes and series (if any) of the
Holding Company's capital stock and a statement of the designations, and the
relative rights, preferences, and limitations of the shares of each class of and
series (if any) of capital stock are as follows:
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A. Common Stock. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of the common
stock shall exclusively possess all voting power. Each holder
of shares of common stock shall be entitled to one vote for
each share held by such holder and there shall be no right to
cumulate votes in an election of directors.
Whenever there shall have been paid, or declared and set aside
for payment, to the holders of the outstanding shares of any
class of stock having preference over the common stock as to
the payment of dividends, the full amount of dividends and of
sinking fund, or retirement fund, or other retirement
payments, if any, to which such holders are respectively
entitled in preference to the common stock, then dividends may
be paid on the common stock and on any class or series of
stock entitled to participate therewith as to dividends out of
any assets legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of
the Holding Company, the holders of the common stock (and the
holders of any class or series of stock entitled to
participate with the common stock in the distribution of
assets) shall be entitled to receive, in cash or in kind, the
assets of the Holding Company available for distribution
remaining after: (i) payment or provision for payment of the
Holding Company's debts and liabilities; (ii) distributions or
provision for distributions in settlement of a liquidation
account; and (iii) distributions or provision for
distributions to holders of any class or series of stock
having preference over the common stock in the liquidation,
dissolution, or winding up of the Holding Company. Each share
of common stock shall have the same relative rights as and be
identical in all respects with all the other shares of common
stock.
B. Preferred Stock. The Holding Company may provide in
supplementary sections to its charter for one or more classes
of preferred stock, which shall be separately identified. The
shares of any class may be divided into and issued in series,
with each series separately designated so as to distinguish
the shares thereof from the shares of all other series and
classes. The terms of each series shall be set forth in a
supplementary section to the charter. All shares of the same
class shall be identical except as to the following relative
rights and preferences, as to which there may be variations
between different series:
(a) the distinctive serial designation and the number of
shares constituting such series;
(b) the dividend rate or the amount of dividends to be
paid on the shares of such series, whether dividends
shall be cumulative and, if so, from which date(s)
the payment date(s) for dividends, and the
participating or other special rights, if any, with
respect to dividends;
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(c) the voting powers, full or limited, if any, of the
shares of such series;
(d) whether the shares of such series shall be redeemable
and, if so, the price(s) at which, and the terms and
conditions on which, such shares may be redeemed;
(e) the amount(s) payable upon the shares of such series
in the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Holding Company;
(f) whether the shares of such series shall be entitled
to the benefit of a sinking or retirement fund to be
applied to the purchase or redemption of such shares,
and if so entitled, the amount of such fund and the
manner of its application, including the price(s) at
which such shares may be redeemed or purchased
through the application of such fund;
(g) whether the shares of such series shall be
convertible into, or exchangeable for, shares of any
other class or classes of stock of the Holding
Company and, if so, the conversion price(s) or the
rate(s) of exchange, and the adjustments thereof, if
any, at which such conversion or exchange may be
made, and any other terms and conditions of such
conversion or exchange;
(h) the price or other consideration for which the shares
of such series shall be issued; and
(i) whether the shares of such series which are redeemed
or converted shall have the status of authorized but
unissued shares of serial preferred stock and whether
such shares may be reissued as shares of the same or
any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The Board of Directors shall have authority to divide, by the adoption
of supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established
by a supplementary charter section adopted by the Board of Directors, the
Holding Company shall file with the Secretary to the Office a dated copy of that
supplementary section of this charter establishing and designating the series
and fixing and determining the relative rights and preferences thereof.
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Section 6. Beneficial Ownership Provision.
Notwithstanding anything contained in the Holding Company's charter or
bylaws to the contrary, no person other than Pulaski Bancorp, M.H.C., the parent
holding company of the Holding Company, shall directly or indirectly offer to
acquire or acquire the beneficial ownership of more than 10% of any class of any
equity security of the Holding Company. This limitation shall not apply to a
transaction in which the Stock Holding Company forms a holding company without
change in the respective beneficial ownership interests of its stockholders
other than pursuant to the exercise of any dissenter and appraisal rights, the
purchase of shares by underwriters in connection with a public offering, or the
purchase of shares by a tax-qualified employee stock benefit plan which is
exempt from the approval requirements under Section 574.3(c)(1)(vi) of the
Office's Regulations.
In the event shares are acquired in violation of this Section 6, all
shares beneficially owned by any person in excess of 10% shall be considered
"excess shares" and shall not be counted as shares entitled to vote and shall
not be voted by any person or counted as voting shares in connection with any
matters submitted to the shareholders for a vote.
For the purposes of this Section 6, the following definitions apply:
(i) The term "person" includes an individual, a group
acting in concert, a corporation, a partnership, an
association, a joint stock company, a trust, any
unincorporated organization or similar company, a
syndicate or any other group formed for the purpose
of acquiring, holding or disposing of the equity
securities of the Holding Company.
(ii) The term "offer" includes every offer to buy or
otherwise acquire, solicitation of an offer to sell,
tender offer for, or request or invitation for
tenders of, a security or interest in a security for
value.
(iii) The term "acquire" includes every type of
acquisition, whether effected by purchase, exchange,
operation of law or otherwise.
(iv) The term "acting in concert" means (a) knowing
participation in a joint activity or conscious
parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) a
combination or pooling of voting or other interests
in the securities of an issuer for a common purpose
pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether
written or otherwise.
Section 7. Preemptive Rights.
Holders of the capital stock of the Holding Company are not entitled to
preemptive rights with respect to any shares of the Holding Company that may be
issued.
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Section 8. Directors.
The Holding Company shall be under the direction of a Board of
Directors. The authorized number of directors, as stated in the Holding
Company's bylaws, shall be not be less than five nor more than 15 except when a
greater or lesser number is approved by the Director of the Office, or his or
her delegate.
Section 9. Conduct of Business.
The following provisions are inserted for the management of the
business and the conduct of the affairs of the Holding Company, and for further
definition, limitation and regulation of the powers of the Holding Company and
of its directors and shareholders:
A. Any action required or permitted to be taken by the
shareholders of the Holding Company must be effected at a duly called
annual or special meeting of shareholders of the Holding Company and
may not be effected by any consent in writing by such shareholders.
B. Special meetings of shareholders of the Holding Company may
be called only by the Board of Directors pursuant to a resolution
adopted by a majority of the Whole Board or as otherwise provided in
the Bylaws. The term "Whole Board" means the total number of authorized
directorships (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented
to the Board for adoption).
Section 10. Tender and Exchange Offers.
A. The Board of Directors of the Holding Company, when
evaluating any offer of another Person (as hereinafter defined in this Section
11) to: (1) make a tender or exchange offer for any equity security of the
Holding Company; (2) merge or consolidate the Holding Company with another
corporation or entity; or (3) purchase or otherwise acquire all or substantially
all of the properties and assets of the Holding Company, may, in connection with
the exercise of its judgment in determining what is in the best interest of the
Holding Company and its shareholders, give due consideration to all relevant
factors, including, without limitation, those factors that directors of any
subsidiary of the Holding Company may consider in evaluating any action that may
result in a change or potential change in the control of the subsidiary, and the
social and economic effect of acceptance of such offer: on the Holding Company's
present and future customers and employees and those of its Subsidiaries (as
hereinafter defined ); on the communities in which the Holding Company and its
Subsidiaries operate or are located; on the ability of the Holding Company to
fulfill its corporate objective as a savings and loan holding company under
applicable laws and regulations; and on the ability of its subsidiary savings
bank to fulfill the objectives of a federally chartered stock form savings bank
under applicable statutes and regulations.
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B. For the purposes of this Section 10:
1. A "Person" includes an individual, a firm, a
group acting in concert, a corporation, a
partnership, an association, a joint
venture, a pool, a joint stock company, a
trust, an unincorporated organization or
similar company, a syndicate or any other
group formed for the purpose of acquiring,
holding or disposing of securities or any
other entity.
2. "Subsidiary" means any corporation of which
a majority of any class of equity security
is owned, directly or indirectly, by the
Holding Company.
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Section 11. Amendment of Charter.
Except as provided in Section 5, no amendment, addition, alteration,
change, or repeal of this charter shall be made, unless such is proposed by the
Board of Directors of the Holding Company, approved by the shareholders by a
majority of the votes eligible to be cast at a legal meeting, unless a higher
vote is otherwise required, and approved or preapproved by the Office.
PULASKI BANCORP, INC.
Attest: ____________________________ By:__________________________________
Valerie Kaminski Thomas Bentkowski
Corporate Secretary President and Chief Executive Officer
OFFICE OF THRIFT SUPERVISION
Attest: By:__________________________________
--------------------------
Secretary to the OTS
Declared effective on
the _____ day of __________, 1999
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ATTACHMENT A-2
BYLAWS OF
PULASKI BANCORP, INC.
ARTICLE I. DOMICILE
The domicile of Pulaski Bancorp, Inc. (the "Holding Company") is 130
Mountain Avenue, Springfield, in the County of Union, in the State of New
Jersey.
ARTICLE II. SHAREHOLDERS
Section l. Place of Meetings. All annual and special meetings of
shareholders shall be held at the home office of the Holding Company or at such
other convenient place as the board of directors may determine.
Section 2. Annual Meeting. A meeting of the shareholders of the Holding
Company for the election of directors and for the transaction of any other
business of the Holding Company shall be held annually within 150 days after the
end of the Holding Company's fiscal year which shall be, unless otherwise
specified by the Board, the third Wednesday of April if not a legal holiday, and
if a legal holiday, then on the next day following which is not a legal holiday,
at 4:00 p.m., or at such other date and time within such 150 day period as the
board of directors may determine.
Section 3. Special Meetings. Special meetings of the shareholders for
any purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision ("OTS") or the Federal Stock Charter of the Holding
Company, may be called only by the board of directors pursuant to a resolution
adopted by a majority of the total number of directors that the Holding Company
would have if there were no vacancies on the Board of Directors (hereinafter the
"Whole Board").
Section 4. Conduct of Meetings. Annual and special meetings shall be
conducted by the chairman of the annual or special meeting in accordance with
the written procedures agreed to by the board of directors. The board of
directors shall designate, when present, either the chairman of the board or
president to preside at such meetings.
Section 5. Notice of Meetings. Written notice stating the place, day
and hour of the meeting and the purpose(s) for which the meeting is called shall
be delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, the secretary, or the directors calling the meeting,
to each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the mail, addressed to
the shareholder at the address as it appears on the stock transfer books or
records of the Holding Company as of the record date prescribed in Section 6 of
this Article II, with postage prepaid. When any shareholders' meeting, either
annual or special, is adjourned for 30 days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting. It shall not be
necessary to give any notice of the time and place of any meeting
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adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken.
Section 6. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the board of directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more than
60 days and, in case of a meeting of shareholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken; provided, however, that if no record date is fixed
by the Board of Directors, the record date for determining shareholders entitled
to notice of or to vote at a meeting of shareholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the next day preceding the day on
which the meeting is held, and, for determining shareholders entitled to receive
payment of any dividend or other distribution or allotment or rights or to
exercise any rights of change, conversion or exchange of stock or for any other
purpose, the record date shall be at the close of business on the day on which
the Board of Directors adopts a resolution relating thereto. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such determination shall apply to any
adjournment.
Section 7. Voting Lists. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the Holding Company shall make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment, arranged in alphabetical
order, with the address and the number of shares held by each. This list of
shareholders shall be kept on file at the home office of the Holding Company and
shall be subject to inspection by any shareholder at any time during usual
business hours, for a period of 20 days prior to such meeting. Such list shall
also be produced and kept open at the time and place of the meeting and shall be
subject to the inspection by any shareholder during the entire time of the
meeting. The original stock transfer book shall constitute prima facie evidence
of the shareholders entitled to examine such list or transfer books or to vote
at any meeting of shareholders.
In lieu of making the shareholder list available for inspection by
shareholders as provided in the preceding paragraph, the board of directors may
elect to follow the procedures prescribed in the OTS's Regulations as now or
hereafter in effect.
Section 8. Quorum. A majority of the outstanding shares of the Holding
Company entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If less than a majority of the outstanding
shares is represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to constitute less than a quorum. If a quorum is present, the
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affirmative vote of the majority of the shares represented at the meeting and
entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the Holding Company's charter. Directors, however,
are elected by a plurality of the votes cast at an election of directors.
Section 9. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney in fact. Proxies may be given telephonically or electronically as long
as the holder uses a procedure for verifying the identity of the shareholder.
Proxies solicited on behalf of the management shall be voted as directed by the
shareholder or, in the absence of such direction, as determined by a majority of
the board of directors. No proxy shall be valid more than eleven months from the
date of its execution except for a proxy coupled with an interest.
Section 10. Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, in the absence of written
directions to the Holding Company to the contrary, at any meeting of the
shareholders of the Holding Company any one or more of such shareholders may
cast, in person or by proxy, all votes to which such ownership is entitled. In
the event an attempt is made to cast conflicting votes, in person or by proxy,
by the several persons in whose names shares of stock stand, the vote or votes
to which those persons are entitled shall be cast as directed by a majority of
those holding such and present in person or by proxy at such meeting, but no
votes shall be cast for such stock if a majority cannot agree.
Section 11. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by any officer, agent or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine. Shares held by an
administrator, executor, guardian or conservator may be voted by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name. Shares held in trust in an IRA or Keogh
Account, however, may be voted by the holding company if no other instructions
are received. Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority to do so
is contained in an appropriate order of the court or other public authority by
which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee and
thereafter the pledgee, shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Holding Company,
nor shares held by another corporation, if a majority of the shares entitled to
vote for the election of directors of such other corporation are held by the
Holding Company, shall be voted at any meeting or counted in determining the
total number of outstanding shares at any given time for purposes of any
meeting.
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Section 12. No Cumulative Voting. Each holder of shares of common stock
shall be entitled to one vote for each share held by such holder. No holder of
such shares shall be entitled to cumulative voting for any purpose.
Section 13. Inspectors of Election. In advance of any meeting of
shareholders, the board of directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10% of the votes represented at the meeting shall, make such
appointment at the meeting. If appointed at the meeting, the majority of the
votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the board of
directors in advance of the meeting, or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the OTS, the duties of
such inspectors shall include: determining the number of shares of stock and the
voting power of each share, the shares represented at the meeting, the existence
of a quorum, and the authenticity, validity and effect of proxies; receiving
votes, ballots, or consents; hearing and determining all challenges and
questions in any way arising in connection with the rights to vote; counting and
tabulating all votes or consents; determining the result; and such acts as may
be proper to conduct the election or vote with fairness to all shareholders.
Section 14. Nominating Committee. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at least 30 days prior to the date
of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the Holding Company. No nominations for
directors except those made by the nominating committee shall be voted upon at
the annual meeting unless other nominations by shareholders are made in writing
and delivered to the secretary of the Holding Company at least 30 days prior to
the date of the annual meeting. Upon delivery, such nominations shall be posted
in a conspicuous place in each office of the Holding Company. Ballots bearing
the names of all persons nominated by the nominating committee and by
shareholders shall be provided for use at the annual meeting. However, if the
nominating committee shall fail or refuse to act at least 30 days prior to the
annual meeting, nominations for directors may be made at the annual meeting by
any shareholder entitled to vote and shall be voted upon.
Section 15. New Business. At any annual meeting of the shareholders,
only such business shall be conducted as shall have been brought before the
meeting (i) by or at the direction of the Board of Directors or (ii) by any
stockholder of the Holding Company who is entitled to vote with respect thereto
and who complies with the notice procedures set forth in this Section 15. For
business to be properly brought before an annual meeting by a stockholder, the
business must relate
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to a proper subject matter for stockholder action and the stockholder must have
given timely notice thereof in writing to the Secretary of the Holding Company.
To be timely, a stockholder's notice must be delivered or mailed to and received
at the principal executive offices of the Holding Company not less than ninety
(90) days prior to the date of the annual meeting; provided, however, that in
the event that less than one hundred (100) days' notice or prior public
disclosure of the date of the meeting is given or made to shareholders, notice
by the stockholder to be timely must be received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter such
stockholder proposes to bring before the annual meeting: (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the Holding Company's books, of the stockholder proposing such
business, (iii) the class and number of shares of the Holding Company's capital
stock that are beneficially owned by such stockholder and, (iv) any material
interest of such stockholder in such business. Notwithstanding anything in these
Bylaws to the contrary, no business shall be brought before or conducted at an
annual meeting except in accordance with the provisions of this Section 15. The
Officer of the Holding Company or other person presiding over the annual meeting
shall, if the facts so warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
provisions of this Section 15 and, if he should so determine, he shall so
declare to the meeting and any such business so determined to be not properly
brought before the meeting shall not be transacted.
At any special meeting of the shareholders, only such business shall be
conducted as shall have been brought before the meeting by or at the direction
of the Board of Directors.
Section 16. Informal Action by Shareholders. Subject to the rights of
the holders of any class or series of preferred stock of the Holding Company,
any action required or permitted to be taken by the shareholders of the Holding
Company must be effected at an annual or special meeting of shareholders of the
Holding Company and may not be effected by any consent in writing by such
shareholders.
ARTICLE III. BOARD OF DIRECTORS
Section l. General Powers. The business and affairs of the Holding
Company shall be under the direction of its board of directors. The board of
directors shall annually elect a chairman of the board and a president from
among its members and shall designate, when present, either the chairman of the
board or the president to preside at its meetings.
Section 2. Number and Term. The board of directors shall consist of six
(6) members and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually.
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Section 3. Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw immediately after,
and at the same place as, the annual meeting of shareholders. The board of
directors may provide, by resolution, the time and place, for the holding of
additional regular meetings without other notice than such resolution. Directors
may participate in a meeting by means of a conference telephone or similar
communications device through which all persons participating can hear each
other at the same time. Participation by such means shall constitute presence in
person for all purposes.
Section 4. Qualification. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the Holding
Company unless the Holding Company is a wholly owned subsidiary of a holding
company.
Section 5. Special Meetings. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the president
or by three of the directors. The persons authorized to call special meetings of
the board of directors may fix any place, as the place for holding any special
meeting of the board of directors called by such persons.
Members of the board of directors may participate in special meetings
by means of conference telephone, or by means of similar communications
equipment by which all persons participating in the meeting can hear and speak
to each other. Such participation shall constitute presence in person for all
purposes.
Section 6. Notice. Written notice of any special meeting shall be given
to each director at least 24 hours prior thereto when delivered personally or by
telegram, or at least 48 hours prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the mail so addressed, with postage
prepaid if mailed, or when delivered to the telegraph company if sent by
telegram. Any director may waive notice of any meeting by a writing filed with
the secretary. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
Section 7. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the board of directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time. Notice of any adjourned meeting shall be
given in the same manner as prescribed by Section 6 of this Article III.
Section 8. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the OTS or
by these bylaws.
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Section 9. Action Without a Meeting. Any action required or permitted
to be taken by the board of directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors.
Section 10. Resignation. Any director may resign at any time by sending
a written notice of such resignation to the home office of the Holding Company
addressed to the chairman of the board or secretary. Unless otherwise specified
such resignation shall take effect upon receipt by the chairman of the board or
president. More than three consecutive absences from regular meetings of the
board of directors, unless excused by resolution of the board of directors,
shall automatically constitute a resignation, effective when such resignation is
accepted by the board of directors.
Section 11. Vacancies. Any vacancy occurring in the board of directors
may be filled by the affirmative vote of a majority of the remaining directors,
although less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected to serve until the next election of directors by
the shareholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the board of directors for a
term of office continuing only until the next election of directors by the
shareholders.
Section 12. Compensation. Directors, as such, may receive a stated fee
for their services. By resolution of the board of directors, a reasonable fixed
sum, and reasonable expenses of attendance, if any, may be allowed for actual
attendance at each regular or special meeting of the board of directors. Members
of either standing or special committees may be allowed such compensation for
actual attendance at committee meetings as the board of directors may determine.
Section 13. Presumption of Assent. A director of the Holding Company
who is present at a meeting of the board of directors at which action on any
Holding Company matter is taken shall be presumed to have assented to the action
taken unless his dissent or abstention shall be entered in the minutes of the
meeting or unless he shall file a written dissent to such action with the person
acting as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the secretary of the Holding Company
within five days after the date a copy of the minutes of the meeting is
received. Such right to dissent shall not apply to a director who voted in favor
of such action.
Section 14. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director may be removed only for cause by a vote
of the holders of a majority of the shares then entitled to vote at an election
of directors. Whenever the holders of the shares of any class are entitled to
elect one or more directors by the provisions of the Charter or supplemental
sections thereto, the provisions of this section shall apply, in respect to the
removal of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.
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ARTICLE IV. EXECUTIVE AND OTHER COMMITTEES
Section l. Appointment. The board of directors, by resolution adopted
by a majority of the full board, may designate the chief executive officer and
two or more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
Section 2. Authority. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
Charter or bylaws of the Holding Company, or recommending to the shareholders a
plan of merger, consolidation, or conversion; the sale, lease or other
disposition of all or substantially all of the property and assets of the
Holding Company otherwise than in the usual and regular course of its business;
a voluntary dissolution of the Holding Company; a revocation of any of the
foregoing; or the approval of a transaction in which any member of the executive
committee, directly or indirectly, has any material beneficial interest.
Section 3. Tenure. Subject to the provisions of Section 8 of this
Article IV, the terms of the members of the executive committee shall be set by
the board of directors.
Section 4. Meetings. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating the
place, date and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
Section 5. Quorum. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 6. Action Without a Meeting. Any action required or permitted
to be taken by the executive committee at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the members of the executive committee.
Section 7. Vacancies. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.
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Section 8. Resignations and Removal. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the Holding Company. Unless otherwise
specified, such resignation shall take effect upon its receipt; the acceptance
of such resignation shall not be necessary to make it effective.
Section 9. Procedure. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
Section 10. Other Committees. The board of directors may by resolution
establish an audit, loan, or other committees composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
Holding Company and may prescribe the duties, constitution and procedures
thereof.
ARTICLE V. OFFICERS
Section l. Positions. The officers of the Holding Company shall be a
president, one or more vice presidents, a secretary and a treasurer or
comptroller, each of whom shall be elected by the board of directors. The board
of directors may also designate the chairman of the board as an officer. The
president shall be a director of the Holding Company. The offices of the
secretary and treasurer or comptroller may be held by the same person and a vice
president may also be either the secretary or the treasurer or comptroller. The
board of directors may designate one or more vice presidents as executive vice
president or senior vice president. The board of directors may also elect or
authorize the appointment of such other officers as the business of the Holding
Company may require. The officers shall have such authority and perform such
duties as the board of directors may from time to time authorize or determine.
In the absence of action by the board of directors, the officers shall have such
powers and duties as generally pertain to their respective offices.
Section 2. Election and Term of Office. The officers of the Holding
Company shall be elected annually at the first meeting of the board of directors
held after each annual meeting of the shareholders. If the election of officers
is not held at such meeting, such election shall be held as soon thereafter as
possible. Each officer shall hold office until a successor has been duly elected
and qualified or until the officer's death, resignation or removal in the manner
hereinafter provided. Election or appointment of an officer, employee or agent
shall not of itself create contractual rights. The board of directors may
authorize the Holding Company to enter into an employment contract with any
officer in accordance with regulations of the OTS; but no such contract shall
impair the right of the board of directors to remove any officer at any time in
accordance with Section 3 of this Article V.
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Section 3. Removal. Any officer may be removed by the board of
directors whenever in its judgment the best interests of the Holding Company
will be served thereby, but such removal, other than for cause, shall be without
prejudice to the contractual rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term.
Section 5. Remuneration. The remuneration of the officers shall be
fixed from time to time by the board of directors.
ARTICLE VI. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section l. Contracts. To the extent permitted by regulations of the
OTS, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the board of directors may authorize any officer,
employee, or agent of the Holding Company to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Holding Company.
Such authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the Holding
Company and no evidence of indebtedness shall be issued in its name unless
authorized by the board of directors. Such authority may be general or confined
to specific instances.
Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Holding Company shall be signed by one or more officers, employees
or agents of the Holding Company in such manner as shall from time to time be
determined by the board of directors.
Section 4. Deposits. All funds of the Holding Company not otherwise
employed shall be deposited from time to time to the credit of the Holding
Company in any duly authorized depositories as the board of directors may
select.
ARTICLE VII. CERTIFICATES FOR SHARES
AND THEIR TRANSFER
Section l. Certificates for Shares. Certificates representing shares of
capital stock of the Holding Company shall be in such form as shall be
determined by the board of directors and approved by the OTS. Such certificates
shall be signed by the chief executive officer or by any other officer of the
Holding Company authorized by the board of directors, attested by the secretary
or an assistant secretary, and sealed with the corporate seal or a facsimile
thereof. The signatures of such officers upon a certificate may be facsimiles if
the certificate is manually signed on behalf of a transfer agent or a registrar,
other than the Holding Company itself or one of its employees. Each certificate
for shares of capital stock shall be consecutively numbered or otherwise
identified. The
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name and address of the person to whom the shares are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
Holding Company. All certificates surrendered to the Holding Company for
transfer shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares has been surrendered and
cancelled, except that in case of a lost or destroyed certificate, a new
certificate may be issued upon such terms and indemnity to the Holding Company
as the board of directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of capital stock of
the Holding Company shall be made only on its stock transfer books. Authority
for such transfer shall be given only by the holder of record or by his legal
representative, who shall furnish proper evidence of such authority, or by his
attorney authorized by a duly executed power of attorney and filed with the
Holding Company. Such transfer shall be made only on surrender for cancellation
of the certificate for such shares. The person in whose name shares of capital
stock stand on the books of the Holding Company shall be deemed by the Holding
Company to be the owner for all purposes.
ARTICLE VIII. RELIANCE UPON BOOKS, REPORTS AND RECORDS
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Holding Company shall, in the performance of
his or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Holding Company and upon such information,
opinions, reports or statements presented to the Holding Company by any of its
officers or employees, or committees of the Board of Directors so designated, or
by any other person as to matters which such director or committee member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Holding Company.
ARTICLE IX. FISCAL YEAR
The fiscal year of the Holding Company shall end on December 31 of each
year. The appointment of accountants shall be subject to annual ratification by
the shareholders.
ARTICLE X. DIVIDENDS
Subject to the terms of the Holding Company's Charter and the
regulations and orders of the OTS, the board of directors may, from time to
time, declare, and the Holding Company may pay, dividends on its outstanding
shares of capital stock.
ARTICLE XI. CORPORATE SEAL
The board of directors shall provide a Holding Company seal, which
shall be two concentric circles between which shall be the name of the Holding
Company. The year of incorporation or an emblem may appear in the center.
11
<PAGE>
ARTICLE XII. INDEMNIFICATION
The Holding Company shall indemnify all officers, directors and
employees of the Holding Company, and their heirs, executors and administrators,
to the fullest extent permitted under federal law against all expenses and
liabilities reasonably incurred by them in connection with or arising out of any
action, suit or proceeding in which they may be involved by reason of their
having been a director or officer of the Holding Company, whether or not they
continue 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.
ARTICLE XIII. AMENDMENTS
These bylaws may be amended in a manner consistent with regulations of
the Office and shall be effective after: (i) approval of the amendment by a
majority vote of the authorized board of directors, or by the affirmative vote
of at least a majority of the voting power of all of the then-outstanding shares
of the capital stock of the Holding Company entitled to vote generally in the
election of directors (after giving effect to the provisions of Section 6 of the
Charter), voting together as a single class. When the Holding Company fails to
meet its quorum requirements, solely due to vacancies on the board, then the
affirmative vote of a majority of the sitting board will be required to amend
the bylaws.
12
COMMON STOCK COMMON STOCK
CERTIFICATE NO. SHARES
PAR VALUE $.01 CUSIP 745357 10 3
SEE REVERSE FOR CERTAIN DEFINITIONS
PULASKI BANCORP, INC.
ORGANIZED UNDER THE LAWS OF THE UNITED STATES
THIS CERTIFIES THAT
is the owner of:
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK $.01 PAR VALUE
PER SHARE OF PULASKI BANCORP, INC.
a stock company organized under the laws of the United States.
The shares represented by this certificate are transferable only on the
stock transfer books of the Company by the holder of record hereof, or by his
duly authorized attorney or legal representative, upon the surrender of this
certificate properly endorsed. This certificate and the shares represented
hereby are issued and shall be held subject to all the provisions of the Charter
of the Company and any amendments thereto (copies of which are on file with the
Transfer Agent), to all of which provisions the holder by acceptance hereof,
assents.
This certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar. The shares evidenced by this certificate are
not of an insurable type and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.
IN WITNESS WHEREOF, PULASKI BANCORP, INC. has caused this certificate
to be executed by the facsimile signatures of its duly authorized officers and
has caused a facsimile of its corporate seal to be hereunto affixed.
Dated: [SEAL]
President and Chief Executive Officer Secretary
<PAGE>
PULASKI BANCORP, INC.
The Charter of the Company contains certain provisions that restrict
persons, other than Pulaski Bancorp, M.H.C., the parent holding company of the
Company, from directly or indirectly offering to acquire or acquiring, the
beneficial ownership of more than 10% of any class of any equity security of the
Company. The Charter contains a provision pursuant to which the shares
beneficially held in excess of such 10% limitation shall be considered "excess
shares" and shall not be counted as shares entitled to vote and shall not be
voted by any person or counted as voting shares in connection with any matters
submitted to the stockholders for a vote. These restrictions are not applicable
to certain reorganization transactions described in the Charter, the purchase of
shares by underwriters in connection with a public offering, or the purchase of
shares by a tax-qualified employee stock benefit plan which is exempt from the
approval requirements under Section 574.3(c)(1)(vi) of the Office of Thrift
Supervision's regulations.
The Board of Directors of the Company is authorized by resolution(s),
from time to time adopted, to provide for the issuance of serial preferred stock
in series and to fix and state the voting powers, designations, preferences and
relative, participating, optional, or other special rights of the shares of each
such series and the qualifications, limitations and restrictions thereof. The
Company will furnish to any shareholder upon request and without charge a full
description of each class of stock and any series thereof.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFTS MIN ACT - __________ custodian __________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act
--------------------
(State)
JT TEN - As joint tenants with right of
survivorship and not as tenants
in common
</TABLE>
Additional abbreviations may also be used though not in
the above list.
For value received, __________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFICATION NUMBER OF ASSIGNEE
- - --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- - -------------------------------------------------- shares of the common stock
represented by this certificate and do hereby irrevocably constitute and appoint
- - -------------------------------------------------------------------------------,
attorney, to transfer the said stock on the books of the within-named Company
with full power of substitution in the premises.
DATED
---------------------- ---------------------------
---------------------------
NOTICE: The signature(s) to
this assignment must
correspond with the name(s)
as written upon the face of
the certificate in every
particular, without
alteration or enlargement
or any change whatever.
SIGNATURE(S) GUARANTEED:
-------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION,
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15
FORM OF
PULASKI SAVINGS BANK
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of June 19, 1997 by and among
Pulaski Savings Bank (the "Bank"), a federally chartered savings bank, with its
principal administrative office at 130 Mountain Avenue, Springfield, New Jersey,
Pulaski Bancorp, M.H.C., a federally chartered mutual holding company, the
holding company for the Bank (the "Holding Company"), and Thomas Bentkowski
("Executive").
WHEREAS, the Bank wishes 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 Bank 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 agrees to
serve as President and Chief Executive Officer of the Bank. Executive shall
render administrative and management services to the Bank 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 of
the Holding Company or any subsidiary of the Bank.
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 on each anniversary
thereafter, the disinterested members of the board of directors of the Bank
("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 written notice in accordance with
Section 9 of this Agreement. The Board will review the Agreement and Executive's
performance annually for purposes of determining whether to extend the Agreement
and the rationale and 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,
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<PAGE>
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 Bank and 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 Bank, or materially affect the performance of Executive's
duties pursuant to this Agreement.
(c) Notwithstanding anything herein to the contrary, Executive's
employment with the Bank may be terminated by the Bank or the Executive during
the term of this Agreement, subject to the terms and conditions of this
Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Bank shall pay Executive as compensation a salary of $144,600
per year ("Base Salary"). Base Salary shall include any amounts of compensation
deferred by Executive under any qualified or unqualified plan maintained by the
Bank. Such Base Salary shall be payable at the same time as salaries are paid to
all other employees of the Bank. 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 by a Committee of the Board, delegated
such responsibility by the Board. The Committee or the Board may increase
Executive's Base Salary. Any increase in Base Salary shall become the "Base
Salary" for purposes of this Agreement. In addition to the Base Salary provided
in this Section 3(a), the Bank shall also provide Executive, at no premium cost
to Executive, with all such other benefits as are provided uniformly to
permanent full-time employees of the Bank.
(b) The Executive shall be entitled to participate in any 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, and the Bank 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 such changes are made
applicable to all Bank employees on a non-discriminatory basis. Without limiting
the generality of the foregoing provisions of this Subsection (b), Executive
shall be entitled to participate in or receive benefits under any employee
benefit plans including but not limited to, retirement plans, supplemental
retirement plans, pension plans, profit-sharing plans, health-and-accident
plans, medical coverage or any other employee benefit plan or arrangement made
available by the Bank 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. Executive shall be
entitled to incentive compensation and bonuses as provided in any plan of the
Bank in which Executive is eligible to participate. Nothing paid to the
Executive under any such
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<PAGE>
plan or arrangement will be deemed to be in lieu of other compensation to which
the Executive is entitled under this Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of
this Section 3 and other compensation provided for by paragraph (b) of this
Section 3, the Bank shall pay or reimburse Executive for all reasonable travel
and other reasonable expenses incurred in the performance of Executive's
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. The
Executive shall be provided at his option, with an automobile expense allowance
or the use of a recent model automobile which will be owned or leased by the
Bank or the Holding Company, as may be mutually agreed upon by the Executive and
the Bank. All reasonable expenses associated therewith shall be borne by the
Bank.
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 Bank or the Holding Company of Executive's full-time
employment hereunder for any reason other than a termination governed by Section
5(a) hereof, for Disability as defined in Section 7 hereof, or Termination for
Cause, as defined in Section 8 hereof; (ii) Executive's resignation from the
Bank's employ upon any (A) failure to elect or reelect or to appoint or
reappoint Executive as President and Chief Executive Officer, unless consented
to by the Executive, (B) a material change in Executive's function, duties, or
responsibilities, which change would cause Executive's position to become one of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Section 1, above, unless consented to by Executive, (C) a
relocation of Executive's principal place of employment by more than 25 miles
from its location at the effective date of this Agreement, unless consented to
by the Executive, (D) a 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, or (E) a liquidation or
dissolution of the Bank or Holding Company, or (F) breach of this Agreement by
the Bank. Upon the occurrence of any event described in clauses (A), (B), (C),
(D), (E) 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 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, as defined in Section 9, the Bank shall be obligated to pay
Executive, or, in the event of his death subsequent to an Event of Termination,
his beneficiary or beneficiaries, or his estate, as the case may be a sum equal
to the sum of: (i) the amount of the remaining payments that the Executive would
have earned if he had continued his employment with the Bank during the
remaining term of this Agreement at the Executive's Base Salary at the Date of
Termination; and (ii) the amount equal to the annual contributions that would
have been made on Executive's behalf to any employee benefit plans of the Bank
or the Holding Company during the remaining term of this
- 3 -
<PAGE>
Agreement based on contributions made (on an annualized basis) at the Date of
Termination; provided, however, that any payments pursuant to this subsection
and subsection 4(c) below 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 Bank, or such lesser number of years in
the event that Executive shall have been employed by the Bank for less than five
years. In the event the Bank is not in compliance with its minimum capital
requirements or if such payments pursuant to this subsection (b) would cause the
Bank's capital to be reduced below its minimum regulatory capital requirements,
such payments shall be deferred until such time as the Bank or successor thereto
is in capital compliance. At the election of the Executive, which election is to
be made prior to the commencement of payments due pursuant to this Section 4,
such payments shall be made in a lump sum as of the Executive's Date of
Termination. The lump sum payment shall be equal to the total amount of all
future payments which would otherwise accrue during the term of this Agreement,
discounted to present value from the time such payment would have become payable
to the date of the Event of Termination. For purposes of calculating amounts
payable in an Event of Termination "present value" shall be equal to the prime
rate as published in the Wall Street Journal. In the event that 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. Such payments
shall not be reduced in the event the Executive obtains other employment
following termination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause
to be continued life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Bank or the Holding Company for
Executive prior to his termination at no premium cost to the Executive, except
to the extent such coverage may be changed in its application to all Bank or
Holding Company employees. Such coverage shall cease upon the expiration of the
remaining term of this Agreement or in the event the Executive obtains other
employment following termination of employment.
(d) Upon the occurrence of an Event of Termination, the Executive shall
have the opportunity to purchase country club memberships covering the Executive
for an amount equal to the Bank's remaining cost of the memberships, if such a
transfer is permitted by the country clubs.
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: (i) 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, as amended (the "Exchange Act"); or (ii) 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 or
the Rules and Regulations promulgated by the Office of Thrift Supervision
("OTS") (or its predecessor agency), as in effect on the date hereof (provided,
that in applying the definition of change in control as set forth under the
rules and regulations of the OTS, the Board shall substitute its
- 4 -
<PAGE>
judgment for that of the OTS); 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 representing 25% or
more of the Bank'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
Bank or the Holding Company, 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 Bank'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 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 a Change in Control has occurred pursuant to Section 5(a) 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) Executive's voluntary
resignation following any demotion, loss of title, office or significant
authority or responsibility, material reduction in annual compensation or
benefits or relocation of his principal place of employment by more than 25
miles from its location immediately prior to the Change in Control, unless such
termination is because of his death, disability, retirement or termination for
Cause.
(c) Upon Executive's entitlement to benefits pursuant to Section 5(b),
the Bank shall 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
the greater of: (1) the payments due for the remaining term of the Agreement; or
2) three (3) times Executive's average annual compensation for the five (5) most
recent taxable years that Executive has been employed by the Bank, or such
lesser number of years in the event that Executive shall have been employed by
the Bank for less than five (5) years. Such average annual compensation shall
include Base Salary, commissions, bonuses, contributions on Executive's behalf
to any pension and/or profit sharing plan, severance payments, retirement
payments, directors or committee fees, fringe benefits paid or to be paid to the
Executive in any such year and payment of any expense items without
accountability or business purpose or that do not meet the Internal Revenue
Service requirements for deductibility by the Bank; provided however, that any
payment under this provision and subsection 5(d) below shall not exceed three
(3) times the Executive's average annual compensation. In the event the Bank is
not in compliance with its minimum capital requirements or if such payments
would cause the Bank's capital to be reduced below its minimum regulatory
capital requirements, such
- 5 -
<PAGE>
payments shall be deferred until such time as the Bank or successor thereto is
in capital compliance. At the election of the Executive, which election is to be
made prior to a Change in Control, such payment shall 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 in approximately equal installments on a
monthly basis over a period of thirty-six (36) months following the Executive's
termination. 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 Bank will cause to be continued life, medical, dental and disability
coverage substantially identical to the coverage maintained by the Bank for
Executive prior to his severance at no premium cost to the Executive, except to
the extent that such coverage may be changed in its application for all Bank
employees on a non-discriminatory basis. Such coverage and payments shall cease
upon the expiration of thirty-six (36) months following the Date of Termination.
6. CHANGE OF CONTROL RELATED PROVISIONS
Notwithstanding the provisions 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 Section 5 shall be determined
by Executive.
7. TERMINATION FOR DISABILITY
(a) If, as a result of Executive's incapacity due to injury or
sickness, such incapacity being determined on the same basis as determined under
any disability insurance policy provided by the Bank, he shall have been absent
from his duties with the Bank 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 Bank or the Executive may terminate Executive's employment for
"Disability."
(b) The Bank will pay Executive, as disability pay, a weekly payment
equal to one hundred percent (100%) of Executive's weekly rate of Base Salary on
the effective date of such termination. These disability payments shall commence
on the effective date of Executive's termination and will end on the earlier of
(i) the date Executive returns to the full-time employment of the Bank in the
same capacity as he was employed prior to his termination for Disability and
pursuant to an employment agreement between Executive and the Bank; (ii)
Executive's full-time employment by another employer; (iii) Executive's death;
or (iv) the expiration of the term of Executive's disability insurance policy as
provided by the Bank. Notwithstanding any other provisions to the contrary, any
amounts due under this subsection (b)
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<PAGE>
shall first be reduced by any benefits payable to the Executive under a
disability insurance policy provided by the Bank.
(c) The Bank will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive prior to his termination for Disability. This coverage and
payments shall cease upon the earlier of (i) the date Executive returns to the
full-time employment of the Bank, in the same capacity as he was employed prior
to his termination for Disability and pursuant to an employment agreement
between Executive and the Bank; (ii) Executive's full-time employment by another
employee; (iii) the Executive's death; or (iv) the expiration of the term of
Executive's disability insurance policy as provided by the Bank.
(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 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. 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
which 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 particulars thereof
in detail. The Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause. During the period
beginning on the date of the Notice of Termination for Cause pursuant to Section
9 hereof 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 awards granted to Executive under any stock
option plan shall not be exercisable, nor shall any unvested awards granted to
Executive under any stock benefit plan of the Bank, the Holding Company or any
subsidiary or affiliate thereof, vest. At the Date of Termination for Cause,
such stock options and related limited rights and such unvested 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.
- 7 -
<PAGE>
9. NOTICE.
(a) Any purported termination by the Bank 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 the date specified in the Notice
of Termination (which, in the case of a 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, 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 the event the Executive is
terminated for reasons other than Termination for Cause, the Bank will continue
to pay Executive his Base Salary in effect when the notice giving rise to the
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 Bank. Executive shall, upon reasonable notice,
furnish such information and assistance to the Bank as may reasonably be
required by the Bank in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.
11. NONCOMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Bank for a period
of one (1) year following such termination in any city or town in which the
Executive's normal business is located and the Bank has an office or has filed
an application for regulatory approval to establish an office, determined as of
the effective date of such termination, except as agreed to pursuant to a
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<PAGE>
resolution duly adopted by the Board. Executive agrees that during such period
and within said cities and towns, Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other business
activities of the Bank. The parties hereto, recognizing that irreparable injury
will result to the Bank, its business and property in the event of Executive's
breach of this Subsection 11(a) agree that in the event of any such breach by
Executive, the Bank 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, employees and all persons
acting for or under the direction of Executive. Nothing herein will be construed
as prohibiting the Bank from pursuing any other remedies available to the Bank
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 Bank and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof to any person,
firm, corporation, or other entity for any reason or purpose whatsoever.
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 Bank. Further,
Executive may disclose information regarding the business activities of the Bank
to the OTS and the Federal Deposit Insurance Corporation ("FDIC") pursuant to a
formal regulatory request. In the event of a breach or threatened breach by
Executive of the provisions of this Section, the Bank 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
Bank 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 Bank from pursuing any other remedies available to the Bank for
such breach or threatened breach, including the recovery of damages from
Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Holding Company, however,
unconditionally guarantees 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
or provided by the Holding Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or
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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 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 Bank may terminate Executive's employment at any time, but any
termination by the Bank, 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 hereinabove.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank'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.
Section 1818(e)(3) or (g)(1); the Bank 's obligations under this contract shall
be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion: (i) pay 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.
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(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1818(e)(4) or (g)(1), all obligations of the Bank 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 Bank is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1) all obligations of
the Bank 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 Bank under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution: (i) by the Director of
the OTS (or his designee) or the FDIC, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1823(c); or (ii) by the Director of the OTS (or his designee) at the
time the Director (or his designee) approves a supervisory merger to resolve
problems related to the operations 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 such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section
1828(k) and 12 C.F.R. Section 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 Bank'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 Bank 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
Bank'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.
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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.
The validity, interpretation, performance and enforcement of 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 Executive within fifty
(50) miles from the location of the Bank, 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 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 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 if Executive is successful pursuant to a
legal judgment, arbitration or settlement.
23. INDEMNIFICATION.
(a) The Bank shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) as permitted under federal law against
all expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been a director or officer of the Bank (whether or not he
continues to be a director or officer at the time of incurring such expenses or
liabilities), such expenses and
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liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
(b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 C.F.R. Section 545.121 and any rules
or regulations promulgated thereunder.
24. 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 or the Holding Company,
expressly and unconditionally to 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 if no such succession or assignment had
taken place.
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SIGNATURES
IN WITNESS WHEREOF, Pulaski Savings Bank and Pulaski Bancorp, M.H.C.
have caused this Agreement to be executed and their seals to be affixed hereunto
by their duly authorized officers and directors, and Executive has signed this
Agreement, on the 19th day of June, 1997.
ATTEST: PULASKI SAVINGS BANK
/s/ Valerie Kaminski By: /s/ Edward J. Mizerski
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Secretary Entire Board of Directors
[SEAL]
ATTEST: PULASKI BANCORP, M.H.C.
(Guarantor)
/s/ Valerie Kaminski By: /s/ Edward J. Mizerski
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Secretary Entire Board of Directors
[SEAL]
WITNESS:
/s/ Lee Wagstaff /s/ Thomas Bentkowski
- - ------------------------------- -------------------------------
Executive
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FORM OF
PULASKI SAVINGS BANK
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of June 16, 1997 by and among
Pulaski Savings Bank (the "Bank"), a federally chartered savings bank, with its
principal administrative office at 130 Mountain Avenue, Springfield, New Jersey,
Pulaski Bancorp, M.H.C., a federally chartered mutual holding company, the
holding company for the Bank (the "Holding Company"), and Lee Wagstaff
("Executive").
WHEREAS, the Bank wishes 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 Bank 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 agrees to
serve as Vice President, Treasurer and Chief Financial Officer of the Bank.
Executive shall render administrative and management services to the Bank 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 of the Holding Company or any subsidiary of the Bank.
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 on each anniversary
thereafter, the disinterested members of the board of directors of the Bank
("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 written notice in accordance with
Section 9 of this Agreement. The Board will review the Agreement and Executive's
performance annually for purposes of determining whether to extend the Agreement
and the rationale and 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,
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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 Bank and 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 Bank, or materially affect the performance of Executive's
duties pursuant to this Agreement.
(c) Notwithstanding anything herein to the contrary, Executive's
employment with the Bank may be terminated by the Bank or the Executive during
the term of this Agreement, subject to the terms and conditions of this
Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Bank shall pay Executive as compensation a salary of $87,500
per year ("Base Salary"). Base Salary shall include any amounts of compensation
deferred by Executive under any qualified or unqualified plan maintained by the
Bank. Such Base Salary shall be payable at the same time as salaries are paid to
all other employees of the Bank. 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 by a Committee of the Board, delegated
such responsibility by the Board. The Committee or the Board may increase
Executive's Base Salary. Any increase in Base Salary shall become the "Base
Salary" for purposes of this Agreement. In addition to the Base Salary provided
in this Section 3(a), the Bank shall also provide Executive, at no premium cost
to Executive, with all such other benefits as are provided uniformly to
permanent full-time employees of the Bank.
(b) The Executive shall be entitled to participate in any 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, and the Bank 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 such changes are made
applicable to all Bank employees on a non-discriminatory basis. Without limiting
the generality of the foregoing provisions of this Subsection (b), Executive
shall be entitled to participate in or receive benefits under any employee
benefit plans including but not limited to, retirement plans, supplemental
retirement plans, pension plans, profit-sharing plans, health-and-accident
plans, medical coverage or any other employee benefit plan or arrangement made
available by the Bank 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. Executive shall be
entitled to incentive compensation and bonuses as provided in any plan of the
Bank in which Executive is eligible to participate. Nothing paid to the
Executive under any such
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<PAGE>
plan or arrangement will be deemed to be in lieu of other compensation to which
the Executive is entitled under this Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of
this Section 3 and other compensation provided for by paragraph (b) of this
Section 3, the Bank shall pay or reimburse Executive for all reasonable travel
and other reasonable expenses incurred in the performance of Executive's
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. The
Executive shall be provided at his option, with an automobile expense allowance
or the use of a recent model automobile which will be owned or leased by the
Bank or the Holding Company, as may be mutually agreed upon by the Executive and
the Bank. All reasonable expenses associated therewith shall be borne by the
Bank.
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 Bank or the Holding Company of Executive's full-time
employment hereunder for any reason other than a termination governed by Section
5(a) hereof, for Disability as defined in Section 7 hereof, or Termination for
Cause, as defined in Section 8 hereof; (ii) Executive's resignation from the
Bank's employ upon any (A) failure to elect or reelect or to appoint or
reappoint Executive as Vice President, Treasurer and Chief Financial Officer,
unless consented to by the Executive, (B) a material change in Executive's
function, duties, or responsibilities, which change would cause Executive's
position to become one of lesser responsibility, importance, or scope from the
position and attributes thereof described in Section 1, above, unless consented
to by Executive, (C) a relocation of Executive's principal place of employment
by more than 25 miles from its location at the effective date of this Agreement,
unless consented to by the Executive, (D) a 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, or (E) a
liquidation or dissolution of the Bank or Holding Company, or (F) breach of this
Agreement by the Bank. Upon the occurrence of any event described in clauses
(A), (B), (C), (D), (E) 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 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, as defined in Section 9, the Bank shall be obligated to pay
Executive, or, in the event of his death subsequent to an Event of Termination,
his beneficiary or beneficiaries, or his estate, as the case may be a sum equal
to the sum of: (i) the amount of the remaining payments that the Executive would
have earned if he had continued his employment with the Bank during the
remaining term of this Agreement at the Executive's Base Salary at the Date of
Termination; and (ii) the amount equal to the annual contributions that would
have been made on Executive's behalf to any employee benefit plans of the Bank
or the Holding Company during the remaining term of this
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<PAGE>
Agreement based on contributions made (on an annualized basis) at the Date of
Termination; provided, however, that any payments pursuant to this subsection
and subsection 4(c) below 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 Bank, or such lesser number of years in
the event that Executive shall have been employed by the Bank for less than five
years. In the event the Bank is not in compliance with its minimum capital
requirements or if such payments pursuant to this subsection (b) would cause the
Bank's capital to be reduced below its minimum regulatory capital requirements,
such payments shall be deferred until such time as the Bank or successor thereto
is in capital compliance. At the election of the Executive, which election is to
be made prior to the commencement of payments due pursuant to this Section 4,
such payments shall be made in a lump sum as of the Executive's Date of
Termination. The lump sum payment shall be equal to the total amount of all
future payments which would otherwise accrue during the term of this Agreement,
discounted to present value from the time such payment would have become payable
to the date of the Event of Termination. For purposes of calculating amounts
payable in an Event of Termination "present value" shall be equal to the prime
rate as published in the Wall Street Journal. In the event that 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. Such payments
shall not be reduced in the event the Executive obtains other employment
following termination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause
to be continued life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Bank or the Holding Company for
Executive prior to his termination at no premium cost to the Executive, except
to the extent such coverage may be changed in its application to all Bank or
Holding Company employees. Such coverage shall cease upon the expiration of the
remaining term of this Agreement or in the event the Executive obtains other
employment following termination of employment.
(d) Upon the occurrence of an Event of Termination, the Executive shall
have the opportunity to purchase country club memberships covering the Executive
for an amount equal to the Bank's remaining cost of the memberships, if such a
transfer is permitted by the country clubs.
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: (i) 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, as amended (the "Exchange Act"); or (ii) 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 or
the Rules and Regulations promulgated by the Office of Thrift Supervision
("OTS") (or its predecessor agency), as in effect on the date hereof (provided,
that in applying the definition of change in control as set forth under the
rules and regulations of the OTS, the Board shall substitute its
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judgment for that of the OTS); 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 representing 25% or
more of the Bank'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
Bank or the Holding Company, 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 Bank'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 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 a Change in Control has occurred pursuant to Section 5(a) 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) Executive's voluntary
resignation following any demotion, loss of title, office or significant
authority or responsibility, material reduction in annual compensation or
benefits or relocation of his principal place of employment by more than 25
miles from its location immediately prior to the Change in Control, unless such
termination is because of his death, disability, retirement or termination for
Cause.
(c) Upon Executive's entitlement to benefits pursuant to Section 5(b),
the Bank shall 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
the greater of: (1) the payments due for the remaining term of the Agreement; or
2) three (3) times Executive's average annual compensation for the five (5) most
recent taxable years that Executive has been employed by the Bank, or such
lesser number of years in the event that Executive shall have been employed by
the Bank for less than five (5) years. Such average annual compensation shall
include Base Salary, commissions, bonuses, contributions on Executive's behalf
to any pension and/or profit sharing plan, severance payments, retirement
payments, directors or committee fees, fringe benefits paid or to be paid to the
Executive in any such year and payment of any expense items without
accountability or business purpose or that do not meet the Internal Revenue
Service requirements for deductibility by the Bank; provided however, that any
payment under this provision and subsection 5(d) below shall not exceed three
(3) times the Executive's average annual compensation. In the event the Bank is
not in compliance with its minimum capital requirements or if such payments
would cause the Bank's capital to be reduced below its minimum regulatory
capital requirements, such
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payments shall be deferred until such time as the Bank or successor thereto is
in capital compliance. At the election of the Executive, which election is to be
made prior to a Change in Control, such payment shall 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 in approximately equal installments on a
monthly basis over a period of thirty-six (36) months following the Executive's
termination. 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 Bank will cause to be continued life, medical, dental and disability
coverage substantially identical to the coverage maintained by the Bank for
Executive prior to his severance at no premium cost to the Executive, except to
the extent that such coverage may be changed in its application for all Bank
employees on a non-discriminatory basis. Such coverage and payments shall cease
upon the expiration of thirty-six (36) months following the Date of Termination.
6. CHANGE OF CONTROL RELATED PROVISIONS
Notwithstanding the provisions 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 Section 5 shall be determined
by Executive.
7. TERMINATION FOR DISABILITY
(a) If, as a result of Executive's incapacity due to injury or
sickness, such incapacity being determined on the same basis as determined under
any disability insurance policy provided by the Bank, he shall have been absent
from his duties with the Bank 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 Bank or the Executive may terminate Executive's employment for
"Disability."
(b) The Bank will pay Executive, as disability pay, a weekly payment
equal to one hundred percent (100%) of Executive's weekly rate of Base Salary on
the effective date of such termination. These disability payments shall commence
on the effective date of Executive's termination and will end on the earlier of
(i) the date Executive returns to the full-time employment of the Bank in the
same capacity as he was employed prior to his termination for Disability and
pursuant to an employment agreement between Executive and the Bank; (ii)
Executive's full-time employment by another employer; (iii) Executive's death;
or (iv) the expiration of the term of Executive's disability insurance policy as
provided by the Bank. Notwithstanding any other provisions to the contrary, any
amounts due under this subsection (b)
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shall first be reduced by any benefits payable to the Executive under a
disability insurance policy provided by the Bank.
(c) The Bank will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive prior to his termination for Disability. This coverage and
payments shall cease upon the earlier of (i) the date Executive returns to the
full-time employment of the Bank, in the same capacity as he was employed prior
to his termination for Disability and pursuant to an employment agreement
between Executive and the Bank; (ii) Executive's full-time employment by another
employee; (iii) the Executive's death; or (iv) the expiration of the term of
Executive's disability insurance policy as provided by the Bank.
(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 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. 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
which 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 particulars thereof
in detail. The Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause. During the period
beginning on the date of the Notice of Termination for Cause pursuant to Section
9 hereof 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 awards granted to Executive under any stock
option plan shall not be exercisable, nor shall any unvested awards granted to
Executive under any stock benefit plan of the Bank, the Holding Company or any
subsidiary or affiliate thereof, vest. At the Date of Termination for Cause,
such stock options and related limited rights and such unvested 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.
9. NOTICE.
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(a) Any purported termination by the Bank 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 the date specified in the Notice
of Termination (which, in the case of a 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, 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 the event the Executive is
terminated for reasons other than Termination for Cause, the Bank will continue
to pay Executive his Base Salary in effect when the notice giving rise to the
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 Bank. Executive shall, upon reasonable notice,
furnish such information and assistance to the Bank as may reasonably be
required by the Bank in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.
11. NONCOMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Bank for a period
of one (1) year following such termination in any city or town in which the
Executive's normal business is located and the Bank has an office or has filed
an application for regulatory approval to establish an office, determined as of
the effective date of such termination, except as agreed to pursuant to a
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resolution duly adopted by the Board. Executive agrees that during such period
and within said cities and towns, Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other business
activities of the Bank. The parties hereto, recognizing that irreparable injury
will result to the Bank, its business and property in the event of Executive's
breach of this Subsection 11(a) agree that in the event of any such breach by
Executive, the Bank 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, employees and all persons
acting for or under the direction of Executive. Nothing herein will be construed
as prohibiting the Bank from pursuing any other remedies available to the Bank
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 Bank and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof to any person,
firm, corporation, or other entity for any reason or purpose whatsoever.
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 Bank. Further,
Executive may disclose information regarding the business activities of the Bank
to the OTS and the Federal Deposit Insurance Corporation ("FDIC") pursuant to a
formal regulatory request. In the event of a breach or threatened breach by
Executive of the provisions of this Section, the Bank 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
Bank 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 Bank from pursuing any other remedies available to the Bank for
such breach or threatened breach, including the recovery of damages from
Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Holding Company, however,
unconditionally guarantees 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
or provided by the Holding Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or
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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 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 Bank may terminate Executive's employment at any time, but any
termination by the Bank, 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 hereinabove.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank'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.
Section 1818(e)(3) or (g)(1); the Bank 's obligations under this contract shall
be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion: (i) pay 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.
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(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1818(e)(4) or (g)(1), all obligations of the Bank 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 Bank is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1) all obligations of
the Bank 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 Bank under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution: (i) by the Director of
the OTS (or his designee) or the FDIC, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1823(c); or (ii) by the Director of the OTS (or his designee) at the
time the Director (or his designee) approves a supervisory merger to resolve
problems related to the operations 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 such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section
1828(k) and 12 C.F.R. Section 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 Bank'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 Bank 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
Bank'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.
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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.
The validity, interpretation, performance and enforcement of 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 Executive within fifty
(50) miles from the location of the Bank, 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 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 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 if Executive is successful pursuant to a
legal judgment, arbitration or settlement.
23. INDEMNIFICATION.
(a) The Bank shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) as permitted under federal law against
all expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been a director or officer of the Bank (whether or not he
continues to be a director or officer at the time of incurring such expenses or
liabilities), such expenses and
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liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
(b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 C.F.R. Section 545.121 and any rules
or regulations promulgated thereunder.
24. 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 or the Holding Company,
expressly and unconditionally to 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 if no such succession or assignment had
taken place.
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SIGNATURES
IN WITNESS WHEREOF, Pulaski Savings Bank and Pulaski Bancorp, M.H.C.
have caused this Agreement to be executed and their seals to be affixed hereunto
by their duly authorized officers and directors, and Executive has signed this
Agreement, on the 16th day of June, 1997.
ATTEST: PULASKI SAVINGS BANK
/s/ Valerie Kaminski By: /s/ Edward J. Mizerski
- - ------------------------- -------------------------
Secretary Entire Board of Directors
[SEAL]
ATTEST: PULASKI BANCORP, M.H.C.
(Guarantor)
/s/ Valerie Kaminski By: /s/ Edward J. Mizerski
- - ------------------------- -------------------------
Secretary Entire Board of Directors
[SEAL]
WITNESS:
/s/ Thomas Bentkowski /s/ Lee Wagstaff
- - ------------------------- ------------------------------------
Executive
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FORM OF
PULASKI SAVINGS BANK
TWO YEAR CHANGE IN CONTROL AGREEMENT
This AGREEMENT is made effective as of June 19, 1997 by and among
Pulaski Savings Bank (the "Bank"), a federally chartered savings institution,
with its principal administrative office at 130 Mountain Avenue, Springfield,
New Jersey 07081, Kevin Aylward ("Executive"), and Pulaski Bancorp, M.H.C. (the
"Holding Company"), a federally chartered mutual holding company, which is the
holding company of 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 the Pulaski Savings Bank Two 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 twenty-four (24) 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 Bank ("Board") may extend the Agreement for an additional year.
The Board will review the Agreement and Executive's performance annually for
purposes of determining whether to extend the Agreement, and the results thereof
shall be included in the minutes of the Board's meeting.
2. CHANGE IN CONTROL.
(a) Upon the occurrence of a Change in Control of the Bank or the
Holding Company (as herein defined) followed at any time during the term of this
Agreement by the termination of Executive's employment, other than for Cause, as
defined in Section 2(c) hereof, the provisions of Section 3 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 annual compensation or benefits, or relocation of his
principal place of employment by more than 25 miles from its location
immediately prior to the Change in Control.
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(b) For purposes of this Agreement, a "Change in Control" of the Bank
or Holding Company shall mean an event of a nature that: (i) 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"); or (ii) 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, or the
Rules and Regulations promulgated by the Office of Thrift Supervision ("OTS")
(or its predecessor agency), as in effect on the date hereof (provided, that in
applying the definition of 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 (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
securities of the Bank or the Holding Company representing 25% 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 in connection with the reorganization of the Bank to the
stock form and any voting securities purchased by any employee benefit plan of
the Bank or the Holding Company, 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
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 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 periods.
(c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 hereof upon Termination for Cause. The term "Termination
for Cause" shall mean termination because of 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. 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 which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the Board of Directors of the Bank 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 particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after the Date of Termination for Cause. During the period beginning
on the date of the
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Notice of Termination for Cause pursuant to Section 8 hereof 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 awards granted to Executive under any stock benefit plan of the Bank,
the Holding Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination for Cause, such stock options and related limited rights and any
such unvested 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.
(a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by termination of the Executive's employment
due to: (1) Executive's dismissal or (2) Executive's voluntary termination
pursuant to Section 2(a), unless such termination is due to Termination for
Cause, the Bank and the Holding Company shall 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 two (2) times Executive's average annual
compensation for the five most recent taxable years that Executive has been
employed by the Bank or such lesser number of years in the event that Executive
shall have been employed by the Bank for less than five years. Such average
annual compensation shall include Base Salary, commissions, bonuses,
contributions on Executive's behalf to any pension and/or profit sharing plan,
severance payments, retirement payments, director or committee fees and fringe
benefits paid or to be paid to Executive in any such year and payment of any
expense items without accountability or business purpose or that do not meet the
Internal Revenue Service requirements for deductibility by the Bank; provided
however, that any payment under this provision and subsection 3(b) below shall
not exceed three (3) times the Executive's average annual compensation. At the
election of Executive, which election is to be made prior to a Change in
Control, such payment shall be made in a lump sum. In the event that no election
is made, payment to Executive will be made on a monthly basis in approximately
equal installments during the remaining term of this 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, other than for
Termination for Cause, the Bank shall cause to be continued life, medical and
disability coverage substantially identical to the coverage maintained by the
Bank or Holding Company for Executive prior to his 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 twenty-four (24) full calendar months from the Date
of Termination.
(c) Notwithstanding the preceding paragraphs of this Section 3, 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
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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
preceding paragraphs of this Section 3 shall be determined by 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 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 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).
(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 the Executive is terminated for reasons other than
Termination for Cause, the Bank 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 his current annual 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 4(c) 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.
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 or provided by the Holding Company.
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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 him without reference to this
Agreement.
Nothing in this Agreement shall confer upon Executive the right to
continue in the employ of 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.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank 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.
(a) The board of directors may terminate Executive's employment at any
time, but any termination by the board of directors, 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 2 hereinabove.
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(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank'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.
Section 1818(e)(3) or (g)(1)), the Bank's obligations under this contract shall
be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion (i) pay 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.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1818(e)(4) or (g)(1)), all obligations of the Bank 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 Bank is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, all obligations of the Bank 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 under this contract shall be terminated, except to
the extent determined that continuation of the contract is necessary for the
continued operation of the institution: (i) by the Director of the Office of
Thrift Supervision (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 Federal
Deposit Insurance Act; or (ii) by the Director of the Office of Thrift
Supervision (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 such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
Section 1828(k) and any rules and regulations promulgated thereunder.
10. REINSTATEMENT OF BENEFITS UNDER SECTION 9(b).
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice described in
Section 9(b) hereof (the "Notice") during the term of this Agreement and a
Change in Control, as defined herein, occurs, the Bank will assume its
obligation to pay and Executive will be entitled to receive all of the
termination benefits provided for under Section 3 of this Agreement upon the
Bank's receipt of a dismissal of charges in the Notice.
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11. 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.
12. 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.
13. GOVERNING LAW.
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of New Jersey but only to
the extent not preempted by Federal law.
14. 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,
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.
15. 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 hereof) if Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement.
16. INDEMNIFICATION.
(a) The Bank shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, and shall indemnify
Executive (and his heirs, executors and administrators) as permitted under
Federal law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by
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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 be limited to,
judgments, court costs and reasonable attorneys' fees and the cost of reasonable
settlements.
(b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 C.F.R. Section 545.121 and any rules
or regulations promulgated thereunder.
17. 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, expressly and
unconditionally to 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 if no such succession or assignment had taken place.
8
<PAGE>
SIGNATURES
----------
IN WITNESS WHEREOF, Pulaski Savings Bank and Pulaski Bancorp, M.H.C.
have caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, on the 19th day of June, 1997.
ATTEST: PULASKI SAVINGS BANK
/s/ Valerie Kaminski By: /s/ Thomas Bentkowski
- - -------------------- ---------------------
Secretary Officer
SEAL
ATTEST: PULASKI BANCORP, M.H.C.
(Guarantor)
/s/ Valerie Kaminski By: /s/ Thomas Bentkowski
- - -------------------- ---------------------
Secretary Officer
SEAL
WITNESS:
/s/ Lee Wagstaff /s/ Kevin Aylward
- - -------------------- ---------------------
Executive
9
FORM OF
PULASKI SAVINGS BANK
TWO YEAR CHANGE IN CONTROL AGREEMENT
This AGREEMENT is made effective as of June 19, 1997 by and among
Pulaski Savings Bank (the "Bank"), a federally chartered savings institution,
with its principal administrative office at 130 Mountain Avenue, Springfield,
New Jersey 07081, Valerie Kaminski ("Executive"), and Pulaski Bancorp, M.H.C.
(the "Holding Company"), a federally chartered mutual holding company, which is
the holding company of 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 the Pulaski Savings Bank Two 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 twenty-four (24) 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 Bank ("Board") may extend the Agreement for an additional year.
The Board will review the Agreement and Executive's performance annually for
purposes of determining whether to extend the Agreement, and the results thereof
shall be included in the minutes of the Board's meeting.
2. CHANGE IN CONTROL.
(a) Upon the occurrence of a Change in Control of the Bank or the
Holding Company (as herein defined) followed at any time during the term of this
Agreement by the termination of Executive's employment, other than for Cause, as
defined in Section 2(c) hereof, the provisions of Section 3 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 annual compensation or benefits, or relocation of his
principal place of employment by more than 25 miles from its location
immediately prior to the Change in Control.
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(b) For purposes of this Agreement, a "Change in Control" of the Bank
or Holding Company shall mean an event of a nature that: (i) 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"); or (ii) 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, or the
Rules and Regulations promulgated by the Office of Thrift Supervision ("OTS")
(or its predecessor agency), as in effect on the date hereof (provided, that in
applying the definition of 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 (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
securities of the Bank or the Holding Company representing 25% 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 in connection with the reorganization of the Bank to the
stock form and any voting securities purchased by any employee benefit plan of
the Bank or the Holding Company, 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
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 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 periods.
(c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 hereof upon Termination for Cause. The term "Termination
for Cause" shall mean termination because of 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. 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 which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the Board of Directors of the Bank 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 particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after the Date of Termination for Cause. During the period beginning
on the date of the
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Notice of Termination for Cause pursuant to Section 8 hereof 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 awards granted to Executive under any stock benefit plan of the Bank,
the Holding Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination for Cause, such stock options and related limited rights and any
such unvested 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.
(a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by termination of the Executive's employment
due to: (1) Executive's dismissal or (2) Executive's voluntary termination
pursuant to Section 2(a), unless such termination is due to Termination for
Cause, the Bank and the Holding Company shall 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 two (2) times Executive's average annual
compensation for the five most recent taxable years that Executive has been
employed by the Bank or such lesser number of years in the event that Executive
shall have been employed by the Bank for less than five years. Such average
annual compensation shall include Base Salary, commissions, bonuses,
contributions on Executive's behalf to any pension and/or profit sharing plan,
severance payments, retirement payments, director or committee fees and fringe
benefits paid or to be paid to Executive in any such year and payment of any
expense items without accountability or business purpose or that do not meet the
Internal Revenue Service requirements for deductibility by the Bank; provided
however, that any payment under this provision and subsection 3(b) below shall
not exceed three (3) times the Executive's average annual compensation. At the
election of Executive, which election is to be made prior to a Change in
Control, such payment shall be made in a lump sum. In the event that no election
is made, payment to Executive will be made on a monthly basis in approximately
equal installments during the remaining term of this 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, other than for
Termination for Cause, the Bank shall cause to be continued life, medical and
disability coverage substantially identical to the coverage maintained by the
Bank or Holding Company for Executive prior to his 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 twenty-four (24) full calendar months from the Date
of Termination.
(c) Notwithstanding the preceding paragraphs of this Section 3, 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
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<PAGE>
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
preceding paragraphs of this Section 3 shall be determined by 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 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 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).
(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 the Executive is terminated for reasons other than
Termination for Cause, the Bank 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 his current annual 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 4(c) 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.
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 or provided by the Holding Company.
4
<PAGE>
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 him without reference to this
Agreement.
Nothing in this Agreement shall confer upon Executive the right to
continue in the employ of 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.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank 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.
(a) The board of directors may terminate Executive's employment at any
time, but any termination by the board of directors, 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 2 hereinabove.
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(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank'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.
Section 1818(e)(3) or (g)(1)), the Bank's obligations under this contract shall
be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion (i) pay 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.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1818(e)(4) or (g)(1)), all obligations of the Bank 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 Bank is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, all obligations of the Bank 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 under this contract shall be terminated, except to
the extent determined that continuation of the contract is necessary for the
continued operation of the institution: (i) by the Director of the Office of
Thrift Supervision (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 Federal
Deposit Insurance Act; or (ii) by the Director of the Office of Thrift
Supervision (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 such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
Section 1828(k) and any rules and regulations promulgated thereunder.
10. REINSTATEMENT OF BENEFITS UNDER SECTION 9(b).
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice described in
Section 9(b) hereof (the "Notice") during the term of this Agreement and a
Change in Control, as defined herein, occurs, the Bank will assume its
obligation to pay and Executive will be entitled to receive all of the
termination benefits provided for under Section 3 of this Agreement upon the
Bank's receipt of a dismissal of charges in the Notice.
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11. 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.
12. 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.
13. GOVERNING LAW.
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of New Jersey but only to
the extent not preempted by Federal law.
14. 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,
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.
15. 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 hereof) if Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement.
16. INDEMNIFICATION.
(a) The Bank shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, and shall indemnify
Executive (and his heirs, executors and administrators) as permitted under
Federal law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by
7
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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 be limited to,
judgments, court costs and reasonable attorneys' fees and the cost of reasonable
settlements.
(b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 C.F.R. Section 545.121 and any rules
or regulations promulgated thereunder.
17. 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, expressly and
unconditionally to 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 if no such succession or assignment had taken place.
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SIGNATURES
IN WITNESS WHEREOF, Pulaski Savings Bank and Pulaski Bancorp, M.H.C.
have caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, on the 19th day of June, 1997.
ATTEST: PULASKI SAVINGS BANK
/s/ Lee Wagstaff By: /s/ Thomas Bentkowski
- - ---------------- ---------------------
Treasurer Officer
SEAL
ATTEST: PULASKI BANCORP, M.H.C.
(Guarantor)
/s/ Lee Wagstaff By: /s/ Thomas Bentkowski
- - ---------------- ---------------------
Treasurer Officer
SEAL
WITNESS:
/s/ Lee Wagstaff /s/ Valerie Kaminski
- - ---------------- ---------------------
Executive
9
APPENDIX B
AMENDED AND RESTATED
PULASKI SAVINGS BANK
1997 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
(a) "Affiliate" means any "subsidiary corporation" of the Bank, as such
term is defined in Section 424(f) of the Code.
(b) "Award" means, individually or collectively, a grant under the Plan
of Non-statutory Stock Options, Incentive Stock Options, Limited Rights, and
Stock Awards.
(c) "Award Agreement" means an agreement evidencing and setting forth
the terms of an Award granted under the Plan, in such form as the Committee may,
from time to time, approve.
(d) "Bank" means Pulaski Savings Bank, Springfield, New Jersey.
(e) "Board of Directors" means the board of directors of the Holding
Company or any successor or parent corporation thereto.
(f) "Change in Control" means a change in control of the Bank or
Holding Company of a nature that (i) 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 Sections 13 or 15(d) of the Exchange Act; (ii) results in a
"change of control" or "acquisition of control" within the meaning of the
Regulations promulgated by the Office of Thrift Supervision ("OTS") (or its
predecessor agency) found at 12 C.F.R. Part 574, as in effect on the date
hereof; provided, however, that in applying the definition of change in control
as set forth under such regulations the Board of Directors shall substitute its
judgment for that of the OTS; or (iii) without limitation 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), other than Pulaski
Bancorp, M.H.C., is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Bank or
the Holding Company representing 20% or more of the Bank's or the Holding
Company's outstanding securities except for any securities of the Bank purchased
by the Holding Company and any securities purchased by any tax-qualified
employee benefit plan of the Bank; or (B) individuals who constitute the Board
of Directors 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 serving under the 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
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Company or similar transaction occurs in which the Bank or Holding Company is
not the resulting entity; or (D) a solicitation of shareholders 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 or similar transaction with one or
more corporations, as a result of which the outstanding shares of the class of
securities then subject to the plan are exchanged for or converted into cash or
property or securities not issued by the Bank or the Holding Company; or (E) a
tender offer is made for 20% or more of the voting securities of the Bank or the
Holding Company. Notwithstanding the foregoing, a "Change in Control" of the
Bank or the Holding Company shall not be deemed to have occurred if Pulaski
Bancorp, M.H.C. ceases to own at least 51% of all outstanding shares of stock of
the Bank in connection with a conversion of Pulaski Bancorp, M.H.C. from mutual
to stock form.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the committee designated by the Board of
Directors to administer the Plan pursuant to Section 2 of the Plan.
(i) "Common Stock" means the Common Stock of the Bank, par value, $.01
per share.
(j) "Date of Grant" means the effective date of an Award.
(k) "Disability" means any mental or physical condition with respect to
which the Participant qualifies for and receives benefits for under a long-term
disability plan of the Holding Company or an Affiliate, or in the absence of
such a long-term disability plan or coverage under such a plan, "disability"
shall mean a physical or mental condition which, in the sole discretion of the
Committee, is reasonably expected to be of indefinite duration and to
substantially prevent the Participant from fulfilling his duties or
responsibilities to the Bank or Affiliate.
(l) "Effective Date" means October 23, 1997, the effective date of the
Plan.
(m) "Employee" means any person employed by the Bank or an Affiliate.
Directors who are employed by the Bank or an Affiliate shall be considered
Employees under the Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(o) "Exercise Price" means the price at which a share of Common Stock
may be purchased by a Participant pursuant to an Option.
(p) "Fair Market Value" means the market price of Common Stock,
determined by the Committee as follows:
(i) If the Common Stock was traded on the date in
question on The Nasdaq Stock Market then the Fair
Market Value shall be equal to the closing price
reported for such date;
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(ii) If the Common Stock was traded on any other stock
exchange on the date in question, then the Fair
Market Value shall be equal to the closing price
reported by the applicable composite transactions
report for such date; and
(iii) If neither of the foregoing provisions is applicable,
then the Fair Market Value shall be determined by the
Committee in good faith on such basis as it deems
appropriate.
Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in The Wall Street Journal. Such
determination shall be conclusive and binding on all persons.
(q) "Holding Company" means Pulaski Bancorp, Inc.
(r) "Incentive Stock Option" means an Option granted to a Participant
pursuant to Section 7 of the Plan that is intended to meet the requirements of
Section 422 of the Code.
(s) "Limited Right" means an Award granted to a Participant
pursuant to Section 8 of the Plan.
(t) "Non-statutory Stock Option" means a stock option granted to a
Participant pursuant to the terms of the Plan but which is not intended to be
and is not identified as an Incentive Stock Option or a stock option granted
under the Plan which is intended to be and is identified as an Incentive Stock
Option but which does not meet the requirements of Section 422 of the Code.
(u) "Option" means an Incentive Stock Option or Non-statutory Stock
Option.
(v) "Outside Director" means a member of the Board of Directors of the
Bank or an Affiliate, who is not also an Employee of the Bank or an Affiliate.
(w) "Participant" means any person who holds an outstanding Award
pursuant to the Plan.
(x) "Plan" means the Amended and Restated Pulaski Savings Bank 1997
Stock-Based Incentive Plan and upon the effective date of the Reorganization
will be referred to as the Amended and Restated Pulaski Bancorp, Inc. 1997
Stock-Based Incentive Plan.
(y) "Reorganization" means the reorganization of the Bank into a
two-tier mutual holding company structure by establishing Pulaski Bancorp, Inc.,
a federally-chartered stock holding company, which will own 100% of the Common
Stock of the Bank which will be a majority owned subsidiary of Pulaski Bancorp,
MHC, the Bank's mutual holding company parent.
(z) "Retirement" with respect to an Employee means termination of
employment which constitutes retirement under any tax qualified plan maintained
by the Bank. However,
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"Retirement" will not be deemed to have occurred for purposes of this Plan if a
Participant continues to serve as a consultant to or on the Board of Directors
of the Holding Company or its Affiliates even if such Participant is receiving
retirement benefits under any retirement plan of the Holding Company or its
Affiliates. With respect to an Outside Director, "Retirement" means the
termination of service from the Board of Directors of the Holding Company or its
Affiliates following written notice to the Board as a whole of such Outside
Director's intention to retire, except that an Outside Director shall not be
deemed to have "retired" for purposes of the Plan in the event he continues to
serve as a consultant to the Board or as an advisory director or director
emeritus, including pursuant to any retirement plan of the Holding Company or
the Bank.
(aa) "Stock Award" means an Award granted to a Participant pursuant to
Section 9 of the Plan.
(bb) "Termination for Cause" shall mean, in the case of an Outside
Director, removal from the Board of Directors or, in the case of an Employee,
termination of employment, because of a material loss to the Bank or one of its
Affiliates caused by the Participant's intentional failure to perform stated
duties, personal dishonesty, willful violation of any law, rule, regulation
(other than traffic violations or similar offenses) or final cease and desist
order, as determined by the Board of Directors. No act, or failure to act, on a
Participant's part shall be "willful" unless done, or omitted to be done, not in
good faith and without reasonable belief that the action or omission was in the
best interest of the Bank or an Affiliate.
(cc) "Trust" means a trust established by the Board of Directors in
connection with this Plan to hold Plan assets for the purposes set forth herein.
(dd) "Trustee" means any person or entity approved by the Board of
Directors to hold legal title to any of the Trust assets for the purposes set
forth under the Plan.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. The Committee
shall consist of the entire Board of Directors.
(b) The Committee shall (i) select the Employees and Outside Directors
who are to receive Awards under the Plan, (ii) determine the type, number,
vesting requirements and other features and conditions of such Awards, (iii)
interpret the Plan and (iv) make all other decisions relating to the operation
of the Plan. The Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. The Committee's determinations under the Plan
shall be final and binding on all persons.
(c) Each Award shall be evidenced by a written agreement ("Award
Agreement") containing such provisions as may be approved by the Committee. Each
Award Agreement shall constitute a binding contract between the Bank or its
Affiliates and the Participant, and every Participant, upon acceptance of the
Award Agreement, shall be bound by the terms and restrictions of the Plan and of
the Award Agreement. The terms of each Award Agreement shall
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be in accordance with the Plan, but each Award Agreement may include such
additional provisions and restrictions determined by the Committee, in its
discretion, provided that such additional provisions and restrictions are not
inconsistent with the terms of the Plan. In particular, the Committee shall set
forth in each Award Agreement (i) the type of Award granted (ii) the Exercise
Price of an Option, (iii) the number of shares subject to the Award; (iv) the
expiration date of the Award, (v) the manner, time, and rate (cumulative or
otherwise) of exercise or vesting of such Award, and (vi) the restrictions, if
any, placed upon such Award, or upon shares which may be issued upon exercise of
such Award. The Chairman of the Committee and such other directors and officers
as shall be designated by the Committee are hereby authorized to execute Award
Agreements on behalf of the Bank or an Affiliate and to cause them to be
delivered to the recipients of Awards.
(d) The Committee may delegate all authority for: (i) the determination
of forms of payment to be made by or received by the Plan and (ii) the execution
of any Award Agreement. The Committee may rely on the descriptions,
representations, reports and estimate provided to it by the management of the
Bank or an Affiliate for determinations to be made pursuant to the Plan.
3. TYPES OF AWARDS AND RELATED RIGHTS.
The following Awards may be granted under the Plan:
(a) Non-statutory Stock Options
(b) Incentive Stock Options
(c) Limited Rights
(d) Stock Awards
4. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 15 hereof, the maximum
number of shares reserved for Awards under the Plan is 133,308, which number
shall not exceed 14% of the outstanding shares of the Common Stock determined
immediately as of the Effective Date. Subject to adjustment as provided in
Section 15 hereof, the maximum number of shares reserved hereby for purchase
pursuant to the exercise of Options and Option-related Awards granted under the
Plan is 95,220, which number shall not exceed 10% of the outstanding shares of
Common Stock as of the Effective Date. The maximum number of the shares reserved
for Stock Awards is 38,088, which number shall not exceed 4% of the outstanding
shares of Common Stock as of the Effective Date. The shares of Common Stock
issued under the Plan may be either authorized but unissued shares or authorized
shares previously issued and acquired or reacquired by the Trust or the Bank,
respectively. To the extent that Options and Stock Awards are granted under the
Plan, the shares underlying such Awards will be unavailable for any other use
including future grants under the Plan except that, to the extent that Stock
Awards or Options terminate, expire, or are forfeited without having vested or
without having been exercised (in the case of Limited Rights, exercised for
cash), new Awards may be made with respect to these shares.
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5. ELIGIBILITY.
Subject to the terms of the Plan, all Employees and Outside Directors
shall be eligible to receive Awards under the Plan.
6. NON-STATUTORY STOCK OPTIONS.
The Committee may, subject to the limitations of this Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Non-statutory Stock Options upon such terms and conditions as it may
determine. Non-statutory Stock Options granted under this Plan are subject to
the following terms and conditions:
(a) Exercise Price. The Exercise Price of each Non-statutory Stock
Option shall be determined by the Committee on the Date of Grant. Such Exercise
Price shall not be less than 100% of the Fair Market Value of the Common Stock
on the Date of Grant. Shares of Common Stock underlying a Non-statutory Stock
Option may be purchased only upon full payment of the Exercise Price in a manner
provided for in Section 12 of the Plan.
(b) Terms of Non-statutory Stock Options. The term during which each
Non-statutory Stock Option may be exercised shall be determined by the
Committee, but in no event shall a Non-statutory Stock Option be exercisable in
whole or in part more than ten (10) years from the Date of Grant. Subject to
Section 21 of the Plan, the Committee shall determine the date on which each
Non-statutory Stock Option shall become exercisable and any terms or conditions
which must be satisfied prior to each Non-statutory Stock Option becoming
exercisable. The shares of Common Stock underlying each Non-statutory Stock
Option installment may be purchased in whole or in part by the Participant at
any time during the term of such Non-statutory Stock Option after such
installment becomes exercisable.
(c) Transferability. Unless otherwise determined by the Committee in
accordance with this Section 6(c), Non-statutory Stock Options shall not be
transferred, assigned, hypothecated, or disposed of in any manner by a
Participant other than by will or the laws of intestate succession. The
Committee may, however, in its sole discretion, permit transferability or
assignment of a Non-statutory Stock Option if such transfer or assignment is, in
its sole determination, for valid estate planning purposes and such transfer or
assignment is permitted under the Code and Rule 16b-3 under the Exchange Act.
For purposes of this Section 6(c), a transfer for valid estate planning purposes
includes, but is not limited to: (a) a transfer to revocable intervivos trust as
to which the Participant is both the settlor and trustee or (b) a transfer for
no consideration to: (i) any member of the Participant's Immediate Family, (ii)
any trust solely for the benefit of members of the Participant's Immediate
Family, (iii) any partnership whose only partners are members of the
Participant's Immediate Family, and (iv) any limited liability corporation or
corporate entity whose only members or equity owners are members of the
Participant's Immediate Family. For purposes of this Section 6(c), "Immediate
Family" includes, but is not necessarily limited to, a Participant's parents,
spouse, children, grandchildren and great-grandchildren. Nothing contained in
this Section 6(c) shall be construed to require the Committee to give its
approval to any transfer or assignment of any Non-statutory
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Stock Option or portion thereof, and approval to transfer or assign any
Non-statutory Stock Option or portion thereof does not mean that such approval
will be given with respect to any other Non-statutory Stock Option or portion
thereof. The transferee or assignee of any Non- statutory Stock Option shall be
subject to all of the terms and conditions applicable to such Non- statutory
Stock Option immediately prior to the transfer or assignment and shall be
subject to any conditions proscribed by the Committee with respect to such
Non-statutory Stock Option.
(d) Termination of Employment or Service (General). Unless otherwise
determined by the Committee, upon the termination of a Participant's employment
or service for any reason other than Disability, death, Retirement or
Termination for Cause, the Participant's Non-statutory Stock Options shall be
exercisable only as to those shares that were immediately exercisable by the
Participant at the date of termination and only for a period of three (3) months
following termination.
(e) Termination of Employment or Service (Retirement). Unless otherwise
determined by the Committee, in the event of a Participant's Retirement, the
Participant's Non-statutory Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
Retirement and remain exercisable for a period of one (1) year; provided
however, that if the Participant is engaged by the Bank or an Affiliate as a
consultant or advisor or continues to serve the Bank or an Affiliate as a
director or advisory director all unexercisable Non-statutory Stock Options
shall become exercisable in accordance with the Award Agreement for as long as
the Participant is engaged by the Bank or an Affiliate as a consultant or
advisor or continues to serve the Bank or an Affiliate as a director or advisory
director.
(f) Termination of Employment or Service (Death or Disability). Unless
otherwise determined by the Committee, in the event of the termination of a
Participant's employment or service due to Disability or death, all
Non-statutory Stock Options held by such Participant shall immediately become
exercisable and remain exercisable for a period of one (1) year.
(g) Termination of Employment of Service (Termination for Cause).
Unless otherwise determined by the Committee, in the event of a Participant's
Termination for Cause, all rights under the Participant's Non-statutory Stock
Options shall expire immediately upon the effective date of such Termination for
Cause.
(h) Acceleration Upon a Change in Control. In the event of a Change in
Control, all Non-Statutory Stock Options held by a Participant as of the date of
the Change in Control shall immediately become exercisable and shall remain
exercisable until the expiration of the term of the Non-Statutory Stock Options.
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7. INCENTIVE STOCK OPTIONS.
The Committee may, subject to the limitations of the Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Incentive Stock Options to an Employee. Incentive Stock Options granted
pursuant to the Plan shall be subject to the following terms and conditions:
(a) Exercise Price. The Exercise Price of each Incentive Stock Option
shall be not less than 100% of the Fair Market Value of the Common Stock on the
Date of Grant. However, if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning, for purposes of Section 422 of the Code,
Common Stock representing more than 10% of the total combined voting securities
of the Bank ("10% owner"), the Exercise Price shall not be less than 110% of the
Fair Market Value of the Common Stock on the Date of Grant. Shares of Common
Stock may be purchased only upon payment of the full Exercise Price in a manner
provided for in Section 12 of the Plan.
(b) Amounts of Incentive Stock Options. To the extent the aggregate
Fair Market Value of shares of Common Stock with respect to which Incentive
Stock Options that are exercisable for the first time by a Participant during
any calendar year under the Plan and any other stock option plan of the Bank or
an Affiliate exceeds $100,000, or such higher value as may be permitted under
Section 422 of the Code, such Options in excess of such limit shall be treated
as Non-statutory Stock Options. Fair Market Value shall be determined as of the
Date of Grant with respect to each such Incentive Stock Option.
(c) Terms of Incentive Stock Options. The term during which each
Incentive Stock Option may be exercised shall be determined by the Committee,
but in no event shall an Incentive Stock Option be exercisable in whole or in
part more than ten (10) years from the Date of Grant. If at the time an
Incentive Stock Option is granted to an Employee who is a 10% Owner, the
Incentive Stock Option granted to such Employee shall not be exercisable after
the expiration of five (5) years from the Date of Grant. Subject to Section 19
of the Plan, the Committee shall determine the date on which each Incentive
Stock Option shall become exercisable and any terms or conditions which must be
satisfied prior to the Incentive Stock Option becoming exercisable. The shares
of Common Stock underlying each Incentive Stock Option installment may be
purchased in whole or in part at any time during the term of such Incentive
Stock Option after such installment becomes exercisable.
(d) Non-Transferability. No Incentive Stock Option shall be
transferable except by will or the laws of descent and distribution and is
exercisable, during his lifetime, only by the Employee to whom it is granted.
The designation of a beneficiary does not constitute a transfer.
(e) Termination of Employment (General). Unless otherwise determined by
the Committee, upon the termination of a Participant's employment for any reason
other than Disability, death, Retirement or Termination for Cause, the
Participant's Incentive Stock Options shall be exercisable only as to those
Incentive Stock Options that were immediately exercisable
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by the Participant at the date of termination and only for a period of three (3)
months following such termination.
(f) Termination of Employment (Retirement) Unless otherwise determined
by the Committee, in the event of a Participant's Retirement, the Participant's
Incentive Stock Options shall be exercisable only as to those shares that were
immediately exercisable by the Participant at the date of Retirement and remain
exercisable for a period of one (1) year; provided however, that if the
Participant is engaged by the Bank or an Affiliate as a consultant or advisor or
continues to serve the Bank or an Affiliate as an advisory director or director
all unexercisable Incentive Stock Options shall continue to become exercisable
in accordance with the Award Agreement, for as long as the Participant is
engaged by the Bank or an Affiliate as a consultant or advisor or continues to
serve the Bank or an Affiliate as a director or advisory director.
Notwithstanding the foregoing, Incentive Stock Options exercised after three (3)
months from the Participant's Retirement Date will be treated as Non-Statutory
Stock Options under the Code.
(g) Termination of Employment (Disability or Death). Unless otherwise
determined by the Committee, in the event of the termination of a Participant's
employment for Disability or death, all unvested Incentive Stock Options held by
such shall immediately become exercisable and shall remain exercisable for one
(1) year after such termination.
(h) Termination of Employment (Cause). Unless otherwise determined by
the Committee, in the event of a Participant's Termination for Cause, all rights
under such Participant's Incentive Stock Options shall expire immediately upon
the effective date of such Termination for Cause.
(i) Acceleration Upon a Change in Control. In the event of a Change in
Control all Incentive Stock Options held by a Participant as of the date of a
Change in Control shall immediately become exercisable and shall remain
exercisable until the expiration of the term of the Incentive Stock Option. Any
Option which, by operation of this provision, does not meet the requirements of
Section 422 of the Code, shall be considered a Non-statutory Stock Option.
(j) Disqualifying Dispositions. Each Award Agreement with respect to an
Incentive Stock Option shall require the Participant to notify the Committee of
any disposition of shares of Common Stock issued pursuant to the exercise of
such Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying disposition) within 10 days of such
disposition.
8. LIMITED RIGHTS.
Simultaneously with the grant of any Option, the Committee may grant a
Limited Right with respect to all or some of the shares of Common Stock covered
by such Option. Limited Rights granted under this Plan are subject to the
following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six (6) months from the Date of
Grant of the Limited Right. A
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Limited Right may be exercised only in the event of a Change in Control. The
Limited Right may be exercised only when the underlying Option is eligible to be
exercised, and only when the Fair Market Value of the underlying shares on the
day of exercise is greater than the Exercise Price of the underlying Option.
Upon exercise of a Limited Right, the underlying Option shall cease to be
exercisable and shall be terminated. Upon exercise or termination of an Option,
any related Limited Rights shall terminate. The Limited Right is transferable
only when the underlying Option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall
promptly receive from the Holding Company or an Affiliate an amount of cash
equal to the difference between the Exercise Price of the underlying Option and
the Fair Market Value of the Common Stock subject such Option on the date the
Limited Right is exercised, multiplied by the number of shares with respect to
which such Limited Right is being exercised.
9. STOCK AWARDS.
The Committee may, subject to the limitations of the Plan, make Stock
Awards which shall consist of the grant of some number of shares of Common Stock
to a Participant. Stock Awards shall be made subject to the following terms and
conditions:
(a) Payment of the Stock Award. Stock Awards may only be made in whole
shares of Common Stock. Stock Awards may only be granted from shares reserved
under the Plan and available for award at the time the Stock Award is made to
the Participant.
(b) Terms of the Stock Awards. Subject to Section 19 of the Plan, the
Committee shall determine the dates on which Stock Awards granted to a
Participant shall vest and any terms or conditions which must be satisfied prior
to the vesting of any installment or portion of the Stock Award.
(c) Termination of Employment or Service (General). Unless otherwise
determined by the Committee, upon the termination of a Participant's employment
or service for any reason other than Disability, death, Retirement or
Termination for Cause, the Participant's unvested Stock Awards as of the date of
termination shall be forfeited and any rights the Participant had to such
unvested Stock Awards shall become null and void.
(d) Termination of Employment or Service (Retirement). Unless otherwise
determined by the Committee, in the event of a Participant's Retirement, the
Participant's unvested Stock Awards as of the date of Retirement shall be
forfeited and any rights the Participant had to such unvested Stock Awards shall
become null and void; provided however, that if the Participant is engaged by
the Bank or an Affiliate as a consultant or an advisor or continues to serve the
Bank or an affiliate as a director or advisory director, unvested Stock Awards
shall continue to vest in accordance with the Award Agreement for as long as the
Participant is engaged by the Bank or an Affiliate as a consultant or advisor or
continues to serve the Bank or an Affiliate as a director or advisory director.
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(e) Termination of Employment or Service (Death or Disability). Unless
otherwise determined by the Committee, in the event of a termination of the
Participant's service due to Disability or death all unvested Stock Awards held
by such Participant shall immediately vest.
(f) Termination of Employment or Service (Termination for Cause).
Unless otherwise determined by the Committee, or in the event of the
Participant's Termination for Cause, all unvested Stock Awards held by such
Participant as of the effective date of such Termination for Cause shall be
forfeited and any rights such Participant had to such unvested Stock Awards
shall become null and void.
(g) Acceleration Upon a Change in Control. In the event of a Change in
Control all unvested Stock Awards held by a Participant shall immediately vest.
(h) Non-Transferability. Except to the extent permitted by the Code,
the rules promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
(i) The recipient of a Stock Award shall not sell,
transfer, assign, pledge, or otherwise encumber
shares subject to the Stock Award until full vesting
of such shares has occurred. For purposes of this
section, the separation of beneficial ownership and
legal title through the use of any "swap" transaction
is deemed to be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and
except in the event of the Participant's death or
pursuant to a domestic relations order, a Stock Award
is not transferable and may be earned in his lifetime
only by the Participant to whom it is granted. Upon
the death of a Participant, a Stock Award is
transferable by will or the laws of descent and
distribution. The designation of a beneficiary shall
not constitute a transfer.
(iii) If a recipient of a Stock Award is subject to the
provisions of Section 16 of the Exchange Act, shares
of Common Stock subject to such Stock Award may not,
without the written consent of the Committee (which
consent may be given in the Award Agreement), be sold
or otherwise disposed of within six months following
the date of grant of the Stock Award.
(i) Accrual of Dividends. Whenever shares of Common Stock underlying a
Stock Award are distributed to a Participant or beneficiary thereof under the
Plan, such Participant or beneficiary shall also be entitled to receive, with
respect to each such share distributed, a payment equal to any cash dividends
and the number of shares of Common Stock equal to any stock dividends, declared
and paid with respect to a share of the Common Stock if the record date for
determining shareholders entitled to receive such dividends falls between the
date the relevant Stock Award was granted and the date the relevant Stock Award
or installment thereof is issued. There shall also be distributed an appropriate
amount of net earnings, if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.
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(j) Voting of Stock Awards. After a Stock Award has been granted but
for which the shares covered by such Stock Award have not yet been vested,
earned and distributed to the Participant pursuant to the Plan, the Participant
shall be entitled to vote or to direct the Trustee to vote, as the case may be,
such shares of Common Stock which the Stock Award covers subject to the rules
and procedures adopted by the Committee for this purpose and in a manner
consistent with the Trust agreement.
10. DEFERRED PAYMENTS
Notwithstanding any other provision of this Plan, any Participant may
elect, with the concurrence of the Committee and consistent with any rules and
regulations established by the Committee, to defer the delivery of the proceeds
of the exercise of any Non-statutory Stock Option not transferred under the
provisions of Section 6(c) and Stock Awards.
11. PAYOUT ALTERNATIVES.
(a) Payments due to a Participant upon the exercise or redemption of an
Option or Stock Award shall be made in the form of shares of Common Stock.
Payments due to a Participant upon the exercise or redemption of a Limited Right
shall be made in the form of cash.
(b) Any shares of Common Stock tendered in satisfaction of an
obligation arising under this Plan shall be valued at the Fair Market Value of
the Common Stock on the day preceding the date of the issuance of such stock to
the Participant.
12. METHOD OF EXERCISE.
Subject to any applicable Award Agreement, any Option may be exercised
by the Participant in whole or in part at such time or times, and the
Participant may make payment of the Exercise Price in such form or forms,
including, without limitation, payment by delivery of cash, Common Stock or
other consideration (including, where permitted by law and the Committee,
Awards) having a Fair Market Value on the exercise date equal to the total
Exercise Price, or by any combination of cash, shares of Common Stock and other
consideration, including exercise by means of a cashless exercise arrangement
with a qualifying broker-dealer, as the Committee may specify in the applicable
Award Agreement.
13. RIGHTS OF PARTICIPANTS.
No Participant shall have any rights as a shareholder with respect to
any shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such Common Stock. Nothing contained herein or in any
Award Agreement confers on any person any right to continue in the employ or
service of the Bank or an Affiliate or interferes in any way with the right of
the Bank or an Affiliate to terminate a Participant's services.
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14. DESIGNATION OF BENEFICIARY.
A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any Award to which the
Participant would then be entitled. Such designation will be made upon forms
supplied by and delivered to the Bank and may be revoked in writing. If a
Participant fails effectively to designate a beneficiary, then the Participant's
estate will be deemed to be the beneficiary.
15. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Bank, or in the event an extraordinary
capital distribution, is made, the Committee may make such adjustments to
previously granted Awards, to prevent dilution, diminution, or enlargement of
the rights of the Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that may underlie future Awards under
the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock or other securities underlying Awards already made under
the Plan;
(c) adjustments in the Exercise Price of outstanding Incentive
and/or Non-statutory Stock Options, or any Limited Rights
attached to such Options.
No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award. All Awards
under this Plan shall be binding upon any successors or assigns of the Bank.
Notwithstanding the above, in the event of an extraordinary capital
distribution, any adjustment under this Section 15 shall be subject to required
OTS approval.
16. TAX WITHHOLDING.
(a) Whenever under this Plan, cash or shares of Common Stock are to be
delivered upon exercise or payment of an Award or any other event with respect
to rights and benefits hereunder, the Committee shall be entitled to require as
a condition of delivery (i) that the Participant remit an amount sufficient to
satisfy all federal, state, and local withholding tax requirements related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any combination of the foregoing provided, however,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.
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(b) If any disqualifying disposition is made with respect to shares of
Common Stock acquired under an Incentive Stock Option granted pursuant to this
Plan, or any transfer described in Section 6(c) is made, then the person making
such disqualifying disposition, transfer, or election shall remit to the Bank or
its Affiliates an amount sufficient to satisfy all federal, state, and local
withholding taxes thereby incurred; provided that, in lieu of or in addition to
the foregoing, the Bank or its Affiliates shall have the right to withhold such
sums from compensation otherwise due to the Participant, or, except in the case
of any transfer pursuant to Section 6(c), from any shares of Common Stock due to
the Participant under this Plan.
17. AMENDMENT OF THE PLAN AND AWARDS.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, prospectively or retroactively;
provided however, that provisions governing grants of Incentive Stock Options,
unless permitted by the rules and regulations or staff pronouncements
promulgated under the Code shall be submitted for shareholder approval to the
extent required by such law, regulation or interpretation.
Failure to ratify or approve amendments or modifications by
shareholders shall be effective only as to the specific amendment or
modification requiring such ratification. Other provisions of this Plan will
remain in full force and effect.
No such termination, modification or amendment may adversely affect the
rights of a Participant under an outstanding Award without the written
permission of such Participant.
(b) The Committee may amend any Award Agreement, prospectively or
retroactively; provided, however, that no such amendment shall adversely affect
the rights of any Participant under an outstanding Award without the written
consent of such Participant.
18. EFFECTIVE DATE OF PLAN.
The Plan became effective on October 23, 1997. All amendments are
effective upon approval by the Board of Directors, subject to shareholder
ratification when specifically required under the Plan or by applicable federal
or state statutes, rules or regulations. The failure to obtain shareholder
approval for such purposes will not effect the validity of other provisions of
the Plan and any Awards made under the Plan.
19. TERMINATION OF THE PLAN.
The right to grant Awards under the Plan will terminate upon the
earlier of: (i) October 23, 2007; or (ii) the issuance of a number of shares of
Common Stock pursuant to the exercise of Options or the distribution of Stock
Awards which together with the exercise of Limited Rights is equivalent to the
maximum number of shares reserved under the Plan as set forth in Section 4
hereof. The Board of Directors has the right to suspend or terminate the Plan at
any time, provided that no such action will, without the consent of a
Participant, adversely affect a Participant's vested rights under a previously
granted Award.
B-14
<PAGE>
20. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of the State
of New Jersey and applicable federal law.
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B-15
TRUST AGREEMENT
BETWEEN
PULASKI SAVINGS BANK
AND
THOMAS BENTKOWSKI
LEE WAGSTAFF
VALERIE KAMINSKI
EUGENE BOGUCKI
PETER C. PIETRUCHA
FOR THE
PULASKI SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP TRUST
<PAGE>
CONTENTS
Page No.
Section 1 Creation of Trust.................................................1
Section 2 Investment of Trust Fund and Administrative Powers
of the Trustee...................................................2
Section 3 Compensation and Indemnification of Trustee
and Payment of Expenses and Taxes.................................7
Section 4 Records and Valuation.............................................8
Section 5 Instructions from Committee.......................................9
Section 6 Change of Trustees................................................9
Section 7 Miscellaneous.....................................................9
2
<PAGE>
This TRUST AGREEMENT dated March 26, 1997 BETWEEN Pulaski Savings Bank,
with its principal office at 130 Mountain Avenue Springfield, New Jersey 07081
(hereinafter called the "Bank"), AND Thomas Bentkowski, Lee Wagstaff, Valerie
Kaminski, Eugene Bogucki and Peter C. Pietrucha (hereinafter each referred to as
the "Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, effective January 1, 1997, the Bank approved and adopted an
employee stock ownership plan for the benefit of its employees, known as the
Pulaski Savings Bank Employee Stock Ownership Plan (hereinafter called the
"Plan"); and
WHEREAS, the Bank has authorized the execution of this Trust Agreement
and has appointed Thomas Bentkowski, Lee Wagstaff, Valerie Kaminski, Eugene
Bogucki and Peter C. Pietrucha each as Trustee of the Trust Fund created
pursuant to the Plan; and
WHEREAS, Thomas Bentkowski, Lee Wagstaff, Valerie Kaminski, Eugene
Bogucki and Peter C. Pietrucha each has agreed to act as Trustee and to hold and
administer the assets of the Plan in accordance with the terms of this Trust
Agreement;
NOW, THEREFORE, the Bank and each of the Trustees agree as follows:
Section 1. Creation of Trust.
1.1 Trustees. Thomas Bentkowski, Lee Wagstaff, Valerie Kaminski, Eugene
Bogucki and Peter C. Pietrucha shall each be a trustee of the Trust Fund (as
defined below) created in accordance with and in furtherance of the Plan, and
shall serve as Trustee until his/her removal or resignation in accordance with
Section 6 (unless otherwise noted, all Section references contained herein are
to this Trust Agreement).
1.2 Trust Fund. The Trustee hereby agrees to accept contributions from
the Employer (as such term is defined in the Plan) and amounts transferred from
other qualified retirement plans from time to time in accordance with the terms
of the Plan. All such property and contributions, together with income thereon
and increments thereto, shall constitute the "Trust Fund" to be held in
accordance with the terms of the Trust Agreement.
1.3 Incorporation of Plan. An instrument entitled "Pulaski Savings Bank
Employee Stock Ownership Plan" is incorporated herein by reference, and this
Trust Agreement shall be interpreted consistently with that Plan. All words and
phrases defined in that Plan shall have the same meaning when used in this Trust
Agreement, unless otherwise specifically defined in this Trust Agreement.
1.4 Name. The name of this trust shall be "Pulaski Savings Bank
Employee Stock Ownership Trust."
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1.5 Nondiversion of Assets. In no event shall any part of the corpus or
income of the Trust Fund be used for, or diverted to, purposes other than for
the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan, except to the extent that assets
may be returned to the Employer in accordance with the Plan where the Plan fails
to qualify initially under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), or where they are attributable to contributions made by
mistake of fact or conditioned upon their deductibility.
Section 2. Investment of Trust Fund and Administrative Powers of the
Trustee.
2.1 Stock and Other Investments. The basic investment policy of the
Plan shall be to invest primarily in Stock of the Employer for the exclusive
benefit of the Participants and their Beneficiaries. The Committee shall have
full and complete investment authority and responsibility with respect to the
purchase, retention, sale, exchange, and pledge of Stock and the payment of
Stock Obligations, and the Trustee shall not deal in any way with Stock except
in accordance with the written instructions of the Committee. The Trustee shall
invest, or keep invested, all or a portion of the Trust Fund in Stock, and shall
pay Stock Obligations out of assets of the Trust Fund, as instructed from time
to time by the Committee. The Trustee shall invest any balance of the Trust Fund
(the "Investment Fund") in such other property as the Committee, in its sole
discretion, shall deem advisable, subject to any delegation of such investment
responsibility pursuant to Section 2.2. Nothing contained herein shall provide
investment discretion authority or any like kind responsibility in regard to the
assets of the Trust Fund.
In connection with instructions from the Committee to acquire Stock,
the Trustee may purchase newly issued or outstanding Stock from an Employer or
any other holders of Stock, including Participants, Beneficiaries, and Plan
fiduciaries. All purchases and sales of Stock shall be made by the Trustee at
fair market value as determined by the Committee in good faith and in accordance
with any applicable requirement under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Such purchases may be made with assets of the
Trust Fund, with funds borrowed for this purpose (with or without guarantees of
repayment to the lender by an Employer), or by any combination of the foregoing.
Notwithstanding any other provision of this Trust Agreement or the
Plan, neither the Committee nor Trustee shall make any purchase, sale, exchange,
investment, pledge, valuation, or loan, or take any other action involving those
assets for which it is responsible which (i) is inconsistent with the policy of
the Plan and Trust Agreement, (ii) is inconsistent with the prudence and
diversification requirements set forth in Sections 404(a)(1)(B) and (C) of ERISA
(to the extent such requirements apply to an employee stock ownership plan and
related trust), (iii) is prohibited by Section 406 or 407 of ERISA or Section
4975 of the Code, or (iv) would impair the qualification of the Plan or the
exemption of the Trust under Sections 401 and 501 of the Code.
2.2 Delegation of Investment Responsibility. The Committee may, by
written notice, direct the Trustee to segregate any portion or all of the
Investment Fund into one or more separate accounts for each of which full
investment responsibility will be delegated to an investment manager, as
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defined in Section 3(38) of ERISA, appointed in such notice pursuant to Section
402(c)(3) of ERISA (hereinafter a "Manager"). For any separate account where the
Trustee is to maintain custody of the assets, the Trustee and the Manager shall
agree upon procedures for the transmittal of investment instructions from the
Manager to the Trustee, and the Trustee may provide the Manager with such
documents as may be necessary to authorize the Manager to effect transactions
directly on behalf of the segregated account.
Further, the Committee may, by written notice, direct the Trustee to
segregate any portion or all of the Investment Fund into one or more separate
accounts for each of which full investment responsibility will be delegated to
an insurance company through one or more group annuity contracts, deposit
administration contracts, or similar contracts, which may provide for
investments in any commingled separate accounts established under such
contracts. An insurance company shall be a Manager with respect to any amounts
held under such a contract except to the extent the insurer's assets are not
deemed assets of the Plan and Trust Fund pursuant to Section 401(b)(2) of ERISA.
The allocation of amounts held under such a contract among the insurer's general
account and one or more individual or commingled separate accounts shall be
determined by the Bank except as otherwise agreed by the Bank and the insurer.
Any Manager shall have all of the powers given to the Trustee pursuant
to Section 2.3 with respect to the portion of the Trust Fund committed to its
investment discretion and control. The Trustee shall be responsible for the
safekeeping of any assets which remain in its custody, but in no event shall the
Trustee be under any duty to question or make any inquiry or suggestion
regarding the action or inaction of a Manager or an insurer or the advisability
of acquiring, retaining, or disposing of any asset of a segregated account. The
Employer shall indemnify and hold the Trustee harmless from any and all costs,
damages, expenses, and liabilities which the Trustee may incur by reason of any
action taken or omitted to be taken by the Trustee upon directions from the
Committee, a Manager, or an insurer pursuant to this Section 2.2.
2.3 Trustee Powers. In addition to and not by way of limitation upon
the fiduciary powers granted to it by law, the Trustee shall have the following
specific powers, subject to direction by the Committee and subject to the
limitations set forth in Section 2.1:
2.3-1 to receive, hold, manage, invest and reinvest the money or other
property which constitutes the Trust Fund, without distinction between principal
and income;
2.3-2 to hold funds uninvested temporarily without liability for
interest thereon, and to deposit funds in one or more savings or similar
accounts with any banks and savings and loan associations which are insured by
an instrumentality of the federal government, including the Trustee if it is
such an institution.
2.3-3 to invest or reinvest the whole or any portion of the money or
other property which constitutes the Trust Fund in such common or preferred
stocks, investment trust shares, mutual funds, commingled trust funds,
partnership interests, bonds, notes, or other evidences of indebtedness, and
real and personal property as the Committee in its absolute judgment and
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<PAGE>
discretion may deem to be for the best interests of the Trust Fund, regardless
of nondiversification to the extent that such nondiversification is clearly
prudent, and regardless of whether any such investment or property is authorized
by law regarding the investment of trust funds, of a wasting asset nature,
temporarily non-income producing, or within or without the United States;
2.3-4 to invest in common and preferred stocks, bonds, notes, or other
obligations of any corporation or business enterprise in which an Employer or
its owners may own an interest;
2.3-5 to exchange any investment or property, real or personal, for
other investments or properties at such time and upon such terms as the Trustee
shall deem proper;
2.3-6 to sell, transfer, convey or otherwise dispose of any investment
or property, real or personal, for cash or on credit, in such manner and upon
such terms and conditions as the Trustee shall deem advisable, and no person
dealing with the Trustee shall be under any duty to inquire as to the validity,
expediency, or propriety of any such sale or as to the application of the
purchase money paid to the Trustee;
2.3-7 to hold any investment or property in the name of the Trustee,
with or without the designation of any fiduciary capacity, or in name of a
nominee, or unregistered, or in such other form that title may pass by delivery;
provided, however, that the Trustee's records always show that such investment
or property belongs to the Trust Fund and the Trustee shall not be relieved
hereby of its responsibility to maintain safe custody of the Trust Fund;
2.3-8 to organize one or more corporations to hold, manage, or
liquidate any property, including real estate, owned or acquired by the Trust
Fund if in the sole discretion of the Trustee the organization of such
corporation or corporations is for the best interest of the Trust;
2.3-9 to extend the time for payment of, to modify, to renew, or to
release security from any mortgage, note or other evidence of indebtedness, or
to take advantage of or waive any default; to foreclose mortgages and bid in
property under foreclosure or to take title to property by conveyance in lieu of
foreclosure, either with or without the payment of additional consideration;
2.3-10 to vote in person or by proxy all stocks and other securities
having voting privileges; to exercise or refrain from exercising any option or
privilege with respect to stocks and other securities, including any right or
privilege to subscribe for or otherwise to acquire stocks and other securities;
or to sell any such right or privilege; to assent to and join in any plan of
refinance, merger, consolidation, reorganization or liquidation of any
corporation or other enterprise in which this Trust may have an interest, to
deposit stocks and other securities with any committee formed to effectuate the
same, to pay any expense incidental thereto, to exchange stocks and other
securities for those which may be issued pursuant to any such plan, and to
retain as an investment the stocks and other securities received by the Trustee;
and to deposit any investment in a voting trust; notwithstanding the preceding,
participants and beneficiaries shall be entitled to direct the manner in which
stock allocated to their respective accounts are to be voted on all matters. All
Stock which has been allocated to participants' accounts for which the Trustee
has received no written direction and all
4
<PAGE>
unallocated Employer securities will be voted in accordance with Section 7.1 of
the Plan. Whenever such voting rights are to be exercised, the Employer, the
Committee and the Trustee shall see that all Participants and Beneficiaries are
provided with adequate opportunity to deliver their instructions to the Trustee
regarding voting of Stock allocated to their accounts. The instructions of the
Participants with respect to the voting of allocated shares hereunder shall be
confidential;
2.3-11 to abandon any property, real or personal, which the Trustee at
the direction of the Committee, shall consider to be worthless or not of
sufficient value to warrant its keeping or protecting; to abstain from the
payment of taxes, water rents, assessments, repairs, maintenance, and upkeep of
any such property; to permit any such property to be lost by tax sale or other
proceedings, and to convey any such property for a nominal consideration or
without consideration;
2.3-12 to borrow money from an Employer or from others (including the
Trustee), and to enter into installment contracts, for the purchase of Stock
upon such terms and conditions and at such reasonable rates of interest as the
Committee may deem to be advisable, to issue its promissory notes as Trustee to
evidence such debt, to secure the payment of such notes by pledging any property
of the Trust Fund, and to authorize the holders of any such notes to pledge them
to secure obligations of the holders and in connection therewith to repledge any
assets of the Trust as security therefor; provided that, with respect to any
extension of credit to the Trust involving, as a lender or guarantor, an
Employer or another "disqualified person" within the meaning of Section
4975(e)(2) of the Code --
(a) each loan or installment contract is primarily for the benefit
of Participants and Beneficiaries of the Plan;
(b) any interest on a loan or installment contract does not exceed
a reasonable rate;
(c) the proceeds of any loan shall be used only to acquire Stock,
to repay the loan, or to repay a previous loan meeting these
conditions, and the subject of any installment contract shall
be only the Trust's purchase of Stock;
(d) any collateral pledged to a creditor by the Trustee shall
consist only of the assets purchased with borrowed funds or
received in accordance with an installment contract and the
creditor shall have no recourse against the Trust Fund except
with respect to the collateral (although the creditor may have
recourse against an Employer as guarantor);
(e) payments with respect to a loan or installment contract shall
be made only from those amounts contributed by the Employer to
the Trust Fund, from amounts earned on such contributions, and
from cash dividends received on unallocated Stock held by the
Trust as collateral for such an obligation; and
(f) upon the payment of any portion of balance due on a loan or
upon any installment payment, a proportionate part of any
assets originally pledged as collateral for such indebtedness
shall be released from encumbrance in accordance with Section
4.2 of the Plan and the Committee shall at least annually
advise the Trustee of the number of shares of Stock so
released and the proper allocation of such shares under the
terms of the Plan;
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<PAGE>
2.3-13 to manage and operate any real property which shall at any time
constitute an asset of the Trust Fund; to make repairs, alterations, and
improvements thereto; to insure such property against loss by fire or other
casualty; to lease or grant options for the sale of such property, which lease
or option may be for a period of time which may extend beyond the life of this
Trust; and to take any other action or enter into any other contract respecting
such property which is consistent with the best interests of the Trust;
2.3-14 to pay any and all reasonable and normal expenses incurred in
connection with the exercise of any power, right, authority or discretion
granted herein, and, upon prior notice to the Bank, to employ and compensate
agents, investment counsel, custodians, actuaries, attorneys, and accountants in
such connection;
2.3-15 to employ and consult with any legal counsel, who also may be
counsel to an Employer or the Committee, with respect to the meaning or
construction of this Trust Agreement, the extent of the Trustee's obligations
and duties hereunder, and whether the Trustee should take or decline to take a
particular action hereunder, and the Trustee shall be fully protected with
respect to any action taken or omitted by it in good faith pursuant to such
advice;
2.3-16 to defend any action or proceeding instituted against the Trust
Fund, to institute any action on behalf of the Trust Fund, and to compromise or
submit to arbitration any dispute concerning the Trust Fund;
2.3-17 to make, execute, acknowledge and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
2.3-18 to commingle the Trust Fund created pursuant hereto, in whole or
in part, in a single trust with all or any portion of any other trust fund,
assigning an undivided interest to each such commingled trust fund, provided
that such commingled trust is itself exempt from taxation pursuant to Section
501(a) of the Code, or its successor Section; and provided further that the
trust agreement governing such commingled trust shall be deemed incorporated by
reference in the Plan;
2.3-19 where two or more trusts governed by this Trust Agreement have
an undivided interest in any property, to credit the income from such property
to such trusts in proportion to their undivided interests, and when non pro rata
distributions of property or money are made from such trusts, to make
appropriate adjustments to the undivided fractional interests of such trusts;
2.3-20 to invest all or any portion of the Trust Fund in one or more
group annuity contracts, deposit administration contracts, and other such
contracts with insurance companies, including any commingled separate accounts
established under such contracts;
2.3-21 generally, with respect to all cash, stocks and other
securities, and property, both real and personal, received or held in the Trust
Fund by the Trustee, to exercise all the same rights and powers as are or may be
lawfully exercised by persons owning cash, or stocks and other securities,
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<PAGE>
or such property in their own right; and to do all other acts, whether or not
expressly authorized, which it may deem necessary or proper for the protection
of the Trust Fund; and
2.3-22 whenever more than two persons shall qualify to act as
co-trustees, to exercise and perform every power (including discretionary
powers), authority or duty by the concurrence of a majority of them the same
effect as if all had joined therein, except that the unanimous vote of such
persons shall be necessary to determine the number (one or more) and identity of
persons who may sign checks, make withdrawals from financial institutions, have
access to safe deposit boxes, or direct the sale of trust assets and the
disposition of the proceeds.
Section 3. Compensation and Indemnification of Trustee and Payment of
Expenses and Taxes.
3.1 Fees and Expenses from Fund. Compensation of Trustee. In
consideration for rendering services pursuant to this Trust Agreement the
Trustee shall be paid fees in accordance with the Trustee's fee schedule as in
effect from time to time; provided, however, that any individual serving as
Trustee who already receives full-time pay from the Employer shall not receive
compensation from the Plan. Fee changes resulting in fee increases shall be
effective upon not less than 30 days' notice to the Bank. In addition, the
Trustee shall be reimbursed for any reasonable expenses, including reasonable
attorneys' fees, incurred in the administration of the Trust created hereby.
Fees and expenses shall be allocated to Participant Accounts, if any, unless
paid directly by the Employer. All compensation and expenses of the Trustee
shall be paid out of the Trust Fund or by the Employer as specified in the Plan.
If and to the extent the Trust Fund shall not be sufficient, such compensation
and expenses shall be paid by the Employer upon demand. If payment is due but
not paid by the Employer, such amount shall be paid from the assets of the Trust
Fund. The Trustee is hereby empowered to withdraw all such compensation and
expenses which are 60 days past due from the Trust Fund, and, in furtherance
thereof, liquidate any assets of the Trust Fund, without further authorization
or direction from or by any person.
3.2 Indemnification. Notwithstanding any other provision of this Trust
Agreement, any individual designated as a trustee hereunder shall be indemnified
and held harmless by the Employer to the fullest extent permitted by law against
any and all costs, damages, expenses and liabilities including, but not limited
to attorneys' fees and disbursements reasonably incurred by or imposed upon such
individual in connection with any claim made against him or in which he may be
involved by reason of his being, or having been, a trustee hereunder, to the
extent such amounts are not satisfied by insurance maintained by the Employer,
except liability which is adjudicated to have resulted from the gross negligence
or willful misconduct of the Trustee by reason of any action so taken. Further,
any corporate trustee and its officers, directors and agents may be indemnified
and held harmless by the Employer to the fullest extent permitted by law against
any and all costs, damages, expenses and liabilities including, but not limited
to attorneys' fees and disbursements reasonably incurred by or imposed upon such
persons and/or corporation in connection with any claim made against it or them
or in which it or them may be involved by reason of its being, or having been, a
trustee hereunder as may be agreed between the Employer and such Trustee, except
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<PAGE>
liability which is adjudicated to have resulted from the gross negligence or
willful misconduct of the Trustee by reason of any action so taken.
3.3 Expenses. All expenses of administering this Trust and the Plan,
whether incurred by the Trustee or the Committee, shall be paid by the Trustee
from the Trust Fund to the extent such expenses shall not have been assumed by
the Employer.
3.4 Taxes. All taxes of any kind that may be levied or assessed upon
the Trust Fund, its income or assets, shall be paid from the Trust Fund, but the
Trustee shall not be obliged to pay such tax so long as it shall contest the
validity of such levy or assessment upon the advice of counsel.
Section 4. Records and Valuation.
4.1 Records. The Trustee, and any investment manager appointed pursuant
to Section 2.2, shall maintain accurate and detailed records and accounts of all
investments, receipts, disbursements and other transactions made by it with
respect to the Trust Fund, and all accounts, books and records relating thereto
shall be open at all reasonable time to inspection and audit by the Committee
and the Employer.
4.2 Valuation. From time to time upon the request of the Committee, but
at least annually as of the last day of each Plan Year, the Trustee shall
prepare a balance sheet of the Investment Fund in accordance with Section 8.2 of
the Plan and shall deliver copies of the balance sheet to the Committee and the
Employer. In the absence of any written objections to the balance sheet by the
Committee or an Employer within 90 days after its delivery to them, the Trustee
shall be entitled to presume and to rely upon its correctness for all purposes.
Section 5. Instructions from Committee.
5.1 Certification of Members and Employees. From time to time the Bank
shall certify to the Trustee in writing the names of the individuals comprising
the Committee and shall furnish to the Trustee specimens of their signatures and
the signatures of their agents, if any. The Trustee shall be entitled to presume
that the identities of such individuals and their agents are unchanged until it
receives a certification from the Bank notifying it of any changes.
5.2 Instructions to Trustee. The Trustee shall pay such sums to such
persons and shall take such other actions as shall be set forth in written
instructions from a single member of the Committee, whose name shall be
certified in writing to the Trustee by the Bank from time to time. The Trustee
shall be fully protected in taking any action based upon such written
instructions and shall have no power, authority, or duty to interpret the Plan
or to inquire into the decisions or determinations of the Committee, or to
question the instructions given to it by the Committee.
5.3 Plan Change. In the event of an amendment, merger, division, or
termination of the Plan, the Trustee shall continue to disburse funds and to
take other proper actions in accordance with the instructions of the Committee.
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Section 6. Change of Trustees.
The Bank may, at any time, remove any person or entity serving as a
Trustee hereunder by giving to such person or entity written notice of removal
and, if applicable, the name and address of the successor trustee. Any person or
entity serving as a Trustee hereunder may resign at any time by giving written
notice to the Bank. Any such removal or resignation shall take effect within 30
days after notice has been given by the Trustee or by the Bank, as the case may
be. Within those 30 days, the removed or resigned Trustee shall transfer, pay
over and deliver any portion of the Trust Fund in its possession or control
(less an appropriate reserve for any unpaid fees, expenses, and liabilities) and
all pertinent records to the successor or remaining Trustee; provided, however,
that any assets which are invested in a collective fund or in some other manner
which prevents their immediate transfer shall be transferred and delivered to
the successor trustee as soon as may be practicable. Thereafter, the removed or
resigned Trustee shall have no liability for the Trust Fund or for its
administration by the successor or remaining trustee, but shall render an
accounting to the Committee of its administration of the Trust Fund to the date
on which its trusteeship shall have been terminated. The Bank may also, upon 30
days' notice to each person currently serving as a Trustee, appoint one or more
persons to serve as co-trustees hereunder.
Section 7. Miscellaneous.
7.1 Right to Amend. This Trust Agreement may be amended from time to
time by an instrument executed by the Bank; provided, however, that any
amendment affecting the powers, duties or liabilities of the Trustee must be
approved by the Trustee, and provided, further, that no amendment may divert any
portion of the Trust Fund to purposes other than the exclusive benefit of the
Participants and their Beneficiaries prior to the satisfaction of all
liabilities for benefits. Any amendment shall apply to the Trust Fund as
constituted at the time of the amendment as well as to that portion of the Trust
Fund which is subsequently acquired.
7.2 Compliance with ERISA. In the exercise of its powers and the
performance of its duties, the Trustee shall act in good faith and in accordance
with the applicable requirements under ERISA. Except as may be otherwise
required by ERISA, the Trustee shall not be required to furnish any bond in any
jurisdiction for the performance of its duties and, if a bond is required
despite this provision, no surety shall be required on it.
7.3 Nonresponsibility for Funding. The Trustee shall be under no duty
to enforce the payment of any contributions and shall not be responsible for the
adequacy of the Trust Fund to satisfy any obligations for benefits, expenses,
and liabilities under the Plan.
7.4 Reports. The Trustee shall file any report which it is required by
law to file with any governmental authority with respect to this Trust, and the
Committee shall furnish to the Trustee whatever information is necessary to
prepare the report.
7.5 Dealings with Trustee. Persons dealing with the Trustee, including
but not limited to banks, brokers, dealers, and insurers, shall be under no
obligation to inquire concerning the validity
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of anything which the Trustee purports to do, nor need any person see to the
proper application of any money paid or any property transferred upon the order
of the Trustee or to inquire into the Trustee's authority as to any transaction.
7.6 Limitation Upon Responsibilities. The Trustee shall have no
responsibilities with respect to the Plan or Trust other than those specifically
enumerated or explicitly allocated to it under this Trust Agreement or the
provisions of ERISA. All other responsibilities are retained and shall be
performed by one or more of the Employer, the Committee, and such advisors or
agents as they choose to engage.
The Trustee may execute any of the trusts or powers hereof and perform
any of its duties by or through attorneys, agents, receivers or employees and
shall not be answerable for the conduct of the same if chosen with reasonable
care and shall be entitled to advice of counsel concerning all matters of trust
hereof and the duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, agents, receivers and employees as may
reasonably be employed in connection with the trusts hereof. The Trustee may act
upon the opinion or advice of any attorney (who may be the attorney for the
trustee or attorney for the Committee), approved by the Trustee in the exercise
of reasonable care. The Trustee shall not be responsible for any loss or damage
resulting from any action or non-action in good faith in reliance upon such
opinion or advice.
The Trustee shall be protected in acting upon any notice, request,
consent, certificate, order, affidavit, letter, telegram or other paper or
document believed to be genuine and correct and to have been signed or sent by
the proper person or persons.
As to the existence or non-existence of any fact or as to the
sufficiency or validity of any instrument, paper or proceedings, the Trustee
shall be entitled to rely upon a certificate signed on behalf of the Committee
as sufficient evidence of the facts therein contained but may at its discretion
secure such further evidence deemed necessary or advisable, but shall in no case
be bound to secure the same. The Trustee shall not be answerable for other than
its gross negligence or willful misconduct.
Before taking any action hereunder at the request or direction of the
Committee, the Trustee may require that indemnity in form and amount
satisfactory to the Trustee be furnished for the reimbursement of any and all
costs and expenses to which it may be put including, without limitation,
reasonable attorneys' fees and to protect it against all liability, except
liability which is adjudicated to have resulted from the gross negligence or
willful misconduct of the Trustee by reason of any action so taken.
No provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
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7.7 Successor Trustees. This Trust Agreement shall apply to any person
who shall be appointed to succeed the person currently appointed as the Trustee;
and any reference herein to the Trustee shall be deemed to include any one or
more individuals or corporations or any combination thereof who or which hall at
any time act as a co-trustee or as the sole trustee.
7.8 Governing State Law. This Trust Agreement shall be interpreted in
accordance with the laws of the State of New Jersey to the extent those laws may
be applicable under the provisions of ERISA.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement as of the day and year first above written.
ATTEST:
PULASKI SAVINGS BANK
By: /s/ Thomas Bentkowski
- - ----------------- -------------------------
Name
As Its: President
- - -----------------
Title
ATTEST:
PULASKI SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP TRUST
By:
/s/ Thomas Bentkowski
-----------------------------
Thomas Bentkowski, as Trustee
/s/ Lee Wagstaff
-----------------------------
Lee Wagstaff, as Trustee
/s/ Valerie Kaminski
-----------------------------
Valerie Kaminski, as Trustee
/s/ Eugene Bogucki
-----------------------------
Eugene Bogucki, as Trustee
/s/ Peter C. Pietrucha
-----------------------------
Peter C. Pietrucha, as Trustee
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