=================================================================
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) April 18, 1995
GARDEN STATE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
1-13108 22-2549534
(Commission File Number) (IRS Employer Identification No.)
2290 West County Line Road, Jackson, New Jersey 08527
(Address of principal executive offices)
(908) 905-2200
(Registrant's telephone number, including area code)
=================================================================
<PAGE>
Item 5. Other Events.
1. On April 18, 1995, Garden State BancShares, Inc. (the "Company")
issued a press release reporting its earnings for the first quarter of
1995. Net income for the first quarter of 1995 was $651,069, compared
to $380,505 for the first quarter of 1994. On a per share basis,
first quarter 1995 earnings were $.21 compared to $.22 per share for
the same period last year. The decrease in per share earnings was due
to the additional shares issued in the 1994 stock offering. Total
average shares outstanding in the first quarter of 1995 were 3.0
million compared to 1.7 million in the first quarter of 1994.
The Company also announced that, on March 21, 1995, the Federal
Reserve Bank informed the Company that it had lifted the existing
Memorandum of Understanding (MOU) with the Company. In April 1995,
the FDIC and New Jersey Department of Banking concluded regulatory
examinations of Garden State Bank, the Company's principal subsidiary
(the "Bank") as of year end 1994. The regulators thereafter advised
the Board of Directors of the Bank that the regulators anticipated
that the MOU entered into on June 30, 1994 with the Bank would be
rescinded shortly.
2. On April 18, 1995, the Company and the Bank entered into an Amended
and Restated Change In Control Agreement (the "Agreement") with each
of Theodore Bessler, Stuart Lubow, Wayne Courtright and Robert
English. Each Agreement is annexed as an exhibit to this Form 8-K.
For these individuals, the amendments merely deleted certain language
related to the golden parachute prohibitions contained in section
18(k) of the Federal Deposit Insurance Act which, due to the Bank's
improved condition, was no longer necessary, and otherwise merely
restated earlier change in control agreements that the individuals had
entered into with the Company and the Bank. The Company and the Bank
also had entered into a change in control agreement with Ralph Cavall
on January 1, 1995. However, Mr. Cavall, who is 66 years old, will
retire from the Company and the Bank, effective April 28, 1995.
Item 7. Exhibits.
99.1 Press Release dated April 18, 1995
99.2 Amended and Restated Change in Control Agreement dated April
18, 1995 among Garden State Bank, Garden State BancShares,
Inc. and Theodore D. Bessler
99.3 Amended and Restated Change in Control Agreement dated April
18, 1995 among Garden State Bank, Garden State BancShares,
Inc. and Stuart H. Lubow
99.4 Amended and Restated Change in Control Agreement dated April
18, 1995 among Garden State Bank, Garden State BancShares,
Inc. and Wayne Courtright
99.5 Amended and Restated Change in Control Agreement dated April
18, 1995 among Garden State Bank, Garden State BancShares,
Inc. and Robert English
<PAGE>
SIGNATURES
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.
GARDEN STATE BANCSHARES, INC.
Dated: April 26, 1995 By: THEODORE D. BESSLER
-------------------------
Theodore D. Bessler
President and CEO
<PAGE>
INDEX TO EXHIBITS
99.1 Press Release dated April 18, 1995
99.2 Amended and Restated Change in Control Agreement dated April 18,
1995 among Garden State Bank, Garden State BancShares, Inc. and
Theodore D. Bessler
99.3 Amended and Restated Change in Control Agreement dated April 18,
1995 among Garden State Bank, Garden State BancShares, Inc. and
Stuart H. Lubow
99.4 Amended and Restated Change in Control Agreement dated April 18,
1995 among Garden State Bank, Garden State BancShares, Inc. and
Wayne Courtright
99.5 Amended and Restated Change in Control Agreement dated April 18,
1995 among Garden State Bank, Garden State BancShares, Inc. and
Robert English
Exhibit 99(a)
FOR IMMEDIATE RELEASE
GARDEN STATE BANCSHARES, INC. REPORTS FIRST QUARTER EARNINGS
JACKSON, NEW JERSEY ... April 18, 1995 ... Garden State BancShares, Inc.
(NASDAQ:GRDN) reported net income of $651,069 for the first quarter of 1995
compared to $380,505 for the first quarter of 1994. On a per share basis,
first quarter 1995 earnings were $.21 compared to $.22 per share for the
same period last year. The decrease in per share earnings was due to the
additional shares issued in the 1994 stock offering. Total average shares
outstanding in the first quarter of 1995 were 3.0 million compared to 1.7
million in the first quarter of 1994.
According to Theodore D. Bessler, President and Chief Executive Officer of
Garden State BancShares, Inc. and its principal subsidiary, Garden State
Bank, "The improvement in first-quarter earnings reflects our success last
year in dramatically improving the net interest margin. We achieved this
by raising new capital, reducing nonperforming assets and improving loan
quality." The net interest margin, or difference between the rate earned on
assets and the rate paid on deposits, increased during the quarter to 5.23
percent from 4.82 percent in the first quarter of 1994.
Total nonperforming assets were $8.6 million at March 31, 1995, up slightly
from the $8.3 million reported at December 31, 1994, but down $7.4 million
or 46.11 percent from a year ago.
At March 31, 1995, the allowance for loan losses totaled $4.4 million,
compared to $4.2 million at December 31, 1994, and $4.6 million at March
31, 1994. The loan loss allowance represented 2.01 percent of loans,
compared to 1.97 percent at December 31, 1994 and 2.41 percent at March 31,
1994.
Garden State BancShares, Inc. had total assets of $316.3 million at March
31, 1995, compared to $306.4 million at December 31, 1994, and $301.6
million at March 31, 1994. Total deposits increased to $287.8 million, up
$17.6 million and $5.1 million from December 31, 1994, and March 31, 1994,
respectively. Loans were $220.0 million at March 31, 1995, compared to
$213.6 million at December 31, 1994, and $190.4 million at the end of the
first quarter of 1994. Total equity capital at March 31, 1995, was $26.6
million. The Company exceeded all minimum regulatory requirements for
capital adequacy: The ratio of total capital to risk-adjusted assets was
14.91 percent; the ratio of Tier 1 capital to risk-adjusted assets was
13.66 percent; and the Tier 1 leverage capital ratio was 8.46 percent.
<PAGE>
On March 21, 1995, the Federal Reserve Bank informed Garden State
BancShares, Inc. that it had lifted the existing Memorandum of
Understanding (MOU) with the Company. In April, the FDIC and New Jersey
Department of Banking concluded regulatory examinations of Garden State
Bank as of year end 1994; the regulators thereafter advised the Board of
Directors of the Bank that the MOU entered into on June 30, 1994, with the
Bank, would be rescinded by formal notice shortly. Bessler stated, "We
believe the lifting of these regulatory orders is an acknowledgement of the
significant improvements we have made in asset quality, earnings and
capital."
The common stock of Garden State BancShares, Inc. is listed on the NASDAQ
Small-Cap Market under the symbol GRDN. On September 15, 1994, Garden
State BancShares' stock began trading on the Boston Stock Exchange under
the symbol GSB.
Garden State BancShares, Inc. is a bank holding company headquartered in
Jackson, New Jersey. The Company's principal subsidiary, Garden State
Bank, is a full-service, FDIC-insured commercial bank serving Monmouth and
Ocean Counties. The Bank operates eight offices in Brick, Jackson,
Lakewood, Manasquan, Toms River and Whiting. A new branch will be coming
soon to Seaside Heights.
Exhibit 99(b)
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(BESSLER)
THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), is made this 18th
day of April, 1995, among GARDEN STATE BANK ("Bank"), a banking corporation
organized under the laws of New Jersey with its principal office at West
County Line and Bennetts Mills Road, Jackson, New Jersey 08527, GARDEN
STATE BANCSHARES, INC. ("GSB"), a New Jersey corporation which maintains
its principal office at West County Line and Bennetts Mills Road, Jackson,
New Jersey 08527 (GSB and the Bank collectively are the "Company") and
Theodore D. Bessler (the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Bank and GSB;
WHEREAS, the Executive has worked diligently in his position in the
business of the Bank and GSB;
WHEREAS, the Board of Directors of the Bank and GSB believe that the
future services of the Executive are of great value to the Bank and GSB and
that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the
"Board") believes it is imperative that the Company and the Board be able
to rely upon the Executive to continue in his position, and that they be
able to receive and rely upon his advice, if they request it, as to the
best interests of the Company and its shareholders, without concern that
the Executive might be distracted by the personal uncertainties and risks
created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's services
prior to any such activity, the Board of Directors and the Executive have
agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat or occurrence of a bid to take over
control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company
and the Executive, each intending to be legally bound hereby agree as
follows:
1. DEFINITIONS
a. CAUSE. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for
the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes
material injury to the Company as specified in a written notice to the
Executive from the Board of Directors; or (iii) conviction of a crime,
other than a traffic violation, habitual drunkenness, drug abuse, or
excessive absenteeism other than for illness, after a warning (with respect
to drunkenness or absenteeism only) in writing from the Board of Directors
to refrain from such behavior. No act or failure to act on the part of the
Executive shall be considered willful unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
action or omission was in the best interest of the Company.
b. CHANGE IN CONTROL. "Change in Control" shall mean the
occurrence of any of the following events:
(1) The acquisition of the beneficial ownership of at least
25% of GSB's and/or the Bank's voting securities or all or substantially
all of the assets of GSB and/or the Bank by a single person or entity, or a
group of affiliated persons or entities acting in concert.
(2) The merger, consolidation or combination of either GSB
or the Bank with an unaffiliated corporation in which the directors of GSB
and/or the Bank as applicable immediately prior to such merger,
consolidation or combination constitute less than a majority of the board
of directors of the surviving, new or combined entity.
(3) The transfer of all or substantially all of GSB's
and/or Bank's assets.
(4) The election to the board of directors of GSB and/or
the Bank during any consecutive three year period of a group of individuals
constituting a majority of the board who were not serving as directors of
GSB and/or the Bank immediately prior to the consecutive three year period.
c. TIME OF CHANGE IN CONTROL. For purposes of this Agreement, a
Change in Control of the Company shall be deemed to occur on the earlier
of:
(1) The first date on which a single person or entity, or a
group of affiliated persons or entities acting in concert, acquire the
beneficial ownership of 25% or more of GSB and/or the Bank's voting
securities; or
(2) The date of election of such board members as to
constitute a change in the majority of board members during any consecutive
three year period; or
(3) The effective date of any merger, consolidation,
combination or sale of assets.
d. CONTRACT PERIOD. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on
the earlier of (i) the third anniversary of the Change in Control or (ii)
the date the Executive would attain age 65 or (iii) the death of the
Executive.
e. GOOD REASON. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason"
shall mean any of the following, if taken without Executive's express
written consent:
(1) The assignment to Executive of any duties inconsistent
with, or the reduction of powers or functions associated with, Executive's
position, title, duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of Executive from, or
any failure to re-elect Executive to, any position(s) or office(s)
Executive held immediately prior to such Change in Control. A change in
position, title, duties, responsibilities and status or position(s) or
office(s) resulting merely from a merger of the Company into or with
another bank or company shall not meet the requirements of this paragraph
if, and only if, the Executive's new title and responsibilities are
accepted in writing by the Executive, in the sole discretion of the
Executive.
(2) A reduction by the Company in Executive's annual base
compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan in
which Executive participated immediately prior to the Change in Control or
a failure by the Company to continue Executive as a participant in such
plan on at least the same basis as Executive participated in such plan
prior to the Change in Control;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's Employee Stock
Ownership Plan, life insurance plan, health and accident plan, disability
plan, or stock option plan) in which Executive is participating immediately
prior to a Change in Control (except that the Company may institute or
continue plans, programs or arrangements providing Executive with
substantially similar benefits); the taking of any action by the Company
which would adversely affect Executive's participation in or materially
reduce Executive's benefits under, any of such plans, programs or
arrangements; the failure to continue, or the taking of any action which
would deprive Executive, of any material fringe benefit enjoyed by
Executive immediately prior to such Change in Control; or the failure by
the Company to provide Executive with the number of paid vacation days to
which Executive was entitled immediately prior to such Change in Control;
(6) The failure by the Company to obtain an assumption in
writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive
prior to any Change in Control; or
(7) Any purported termination of Executive's employment by
the Company during the term of this Agreement which is not effected
pursuant to all of the requirements of this Agreement; and, for purposes of
this Agreement, no such purported termination shall be effective.
2. EMPLOYMENT. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period
upon the terms and conditions set forth herein.
3. POSITION. During the Contract Period the Executive shall be
employed as a senior officer of Garden State Bank and/or GSB, or such other
corporate or divisional profit center as shall then be the principal
successor to the business, assets and properties of the Company, with the
same title and the same duties and responsibilities as before the Change in
Control. The Executive shall devote his full time and attention to the
business of the Company, and shall not during the Contract Period be
engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of his
which do not require any service on his part in the operation of such
investments.
4. CASH COMPENSATION. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. BASE COMPENSATION. The base compensation shall be equal to
the annual compensation, including both salary and bonus, as were paid to
or accrued for the Executive in the 12 months immediately prior to the
Change in Control. The annual salary portion of base compensation shall be
payable in installments in accordance with the Company's usual payroll
method. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control. Any increase in
the Executive's annual compensation pursuant to paragraph 4(b) below, or
otherwise, shall automatically and permanently increase the base
compensation.
b. ANNUAL INCREASE. The Board of Directors of the Company
during the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the Executive's
compensation and shall award him additional compensation to reflect the
impact of inflation, the Executive's performance, the performance of the
Company and competitive compensation levels, all as determined in the
discretion of the Board of Directors. Additional compensation may take any
form including but not limited to increases in the annual salary, incentive
bonuses and/or bonuses not geared to performance. However, in no event
shall the percentage increase in annual compensation be less than the
annual percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (New York and Northern New Jersey All Items)
during the preceding twelve months.
5. EXPENSES AND FRINGE BENEFITS. During the Contract Period, the
Executive shall be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in the same
manner and to the same extent as such expenses were previously reimbursed
to him immediately prior to the Change in Control. If prior to the Change
in Control, the Executive was entitled to the use of an automobile, he
shall be entitled to the same use of an automobile at least comparable to
the automobile provided to him prior to the Change in Control, and he shall
be entitled to vacations and sick days, in accordance with the practices
and procedures of the Company, as such existed immediately prior to the
Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other
benefits enjoyed, from time to time, by Executive officers of the Company,
all upon terms as favorable as those enjoyed by other Executive officers of
the Company. Notwithstanding anything in this section to the contrary, if
the Company adopts any change in the expenses allowed to, or fringe
benefits provided for, Executive officers of the Company, and such policy
is uniformly applied to all Executive officers of the Company, and any
successor or acquiror of the Company, if any, including the chief Executive
officer of such entities, then no such change shall be deemed to be
contrary to this section.
6. TERMINATION FOR CAUSE. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the termination. In
the event of termination for Cause the Executive shall not be entitled to
any further benefits under this Agreement.
7. DISABILITY. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 6
consecutive months in any 18 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall not be
entitled to any further benefits under this Agreement other than payments
under any disability policy which the Company may obtain for the benefit of
senior officers generally.
8. DEATH BENEFITS. Upon the Executive's death during the Contract
Period, the Executive shall be entitled to the benefits of any life
insurance policy paid for by the Company but his estate shall not be
entitled to any further benefits under this Agreement.
9. TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. The
Company may terminate the Executive without Cause during the Contract
Period by 20 days prior written notice to the Executive, and the Executive
may resign for Good Reason during the Contract Period upon four weeks'
prior written notice to the Company specifying the Good Reason. If the
Company terminates the Executive's employment during the Contract Period
without Cause or if the Executive Resigns for Good Reason, the Company
shall within 20 business days of the termination of employment pay the
Executive a lump sum equal to 2.99 times the highest annual compensation,
including only salary and cash bonus, paid to the Executive during any of
the three calendar years immediately prior to the Change in Control (the
"Lump Sum Payment"). During the remainder of the Contract Period the
Company also shall continue to provide the Executive with and pay for
medical and hospital insurance, disability insurance and life insurance, as
were provided and paid for at the time of the termination of his employment
with the Company. The Company shall also sell to the Executive for a
purchase price of $1.00 the automobile, if any, used by the Executive while
employed by the Company.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period.
If the Company fails to pay the Executive the Lump Sum Payment or to
provide him with the benefits due under this section, the Executive, after
giving 10 days' written notice to the Company identifying the Company's
failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his
enforcement against the Company of the terms of this Agreement. The
Company agrees to pay such legal fees and expenses to the Executive on
demand. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such
fees without reasonable cause and in bad faith.
10. RESIGNATION WITHOUT GOOD REASON. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contact
Period without Good Reason, but upon such resignation the Executive shall
not be entitled to any additional compensation for the time after which he
ceases to be employed by the Company, and shall not be entitled to any of
the other benefits provided hereunder. No such resignation shall be
effective unless in writing with four weeks' notice thereof.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
a. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Except in the
course of his employment with the Company and in the pursuit of the
business of the Company or any of its subsidiaries or affiliates, the
Executive shall not, at any time during or following the Contract Period,
disclose or use, any confidential information or proprietary data of the
Company or any of its subsidiaries or affiliates. The Executive agrees
that, among other things, all information concerning the identity of and
the Company's relations with its customers is confidential information.
b. SPECIFIC PERFORMANCE. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies
as a result of the breach of this section. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
force and effect of the remaining valid portions.
c. SURVIVAL. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. TERM AND EFFECT PRIOR TO CHANGE IN CONTROL.
a. TERM. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for
a period of 3 years from the date hereof (the "Initial Term") or until the
end of the Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on the anniversary
date hereof (so that the Initial Term is always 3 years) unless the Board
of Directors of GSB, by a majority vote of the Directors then in office
votes not to extend the Initial Term. The Executive shall be promptly
notified of the passage of such resolution.
b. NO EFFECT PRIOR TO CHANGE IN CONTROL. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement, plan
or arrangements. The rights, duties and benefits provided hereunder shall
only become effective upon a Change in Control. If the employment of the
Executive by the Company is terminated for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further force and effect.
13. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.
a. Anything in this Agreement to the contrary notwithstanding,
prior to the payment of any compensation or benefits payable under Section
9 hereof, the certified public accountants of the Company immediately prior
to a Change of Control (the "Certified Public Accountants) shall determine
as promptly as practical and in any event within 20 business days following
the termination of employment of Executive whether any payment or
distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise) (a "Payment") would more likely than not be
nondeductible by the Company for Federal income purposes because of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if
it is then the aggregate present value of amounts payable or distributable
to or for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are thereinafter
referred to as "Agreement Payments") shall be reduced (but not below zero)
to the reduced Amount. For purposes of this paragraph, the "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment
to be nondeductible by the Company because of said Section 280G of the
Code.
b. If under paragraph (a) of this section the Certified Public
Accountants determine that any Payment would more likely than not be
nondeductible by the Company because of Section 280G of the Code, the
Company shall promptly give the Executive notice to that effect and a copy
of the detailed calculation thereof and of the Reduced Amount, and the
Executive may then elect, in his sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Agreement Payments equals the
Reduced Amount), and shall advise the Company in writing of his election
within 20 business days of his receipt of notice. If no such election is
made by the Executive within such 20-day period, the Company may elect
which and how much of the Agreement Payments shall be eliminated or reduced
(as long as after such election the Aggregate present Value of the
Agreement Payments equals the Reduced Amount) and shall notify the
Executive promptly of such election. For purposes of this paragraph,
present Value shall be determined in accordance with Section 280G(d)(4) of
the Code. All determinations made by the Certified Public Accountants
shall be binding upon the Company and Executive shall be made within 20
days of a termination of employment of Executive. The Company may suspend
for a period of up to 30 days after termination of employment the Lump Sum
Payment and any other payments or benefits due to the Executive under
Section 9 hereof until the Certified Public Accountants finish the
determination and the Executive (or the Company, as the case may be) elect
how to reduce the Agreement Payments, if necessary. As promptly as
practicable following such determination and the elections hereunder, the
Company shall pay to or distribute to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement and shall
promptly pay to or distribute for the benefit of Executive in the future
such amounts as become due to Executive under this Agreement.
c. As a result of the uncertainty in the application of Section
280G of the Code, it is possible that Agreement Payments may have been made
by the Company which should not have been made ("Overpayment") of that
additional Agreement Payments which will have not been made by the Company
could have been made ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the
Certified Public Accountants, based upon the assertion of a deficiency by
the Internal Revenue Service against the Company or Executive which said
Certified Public Accountants believe has a high probability of success,
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Executive which Executive shall repay
to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code; provided, however, that
no amount shall be payable by Executive to the Company in and to the extent
such payment would not reduce the amount which is subject to taxation under
Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an
Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive together with interest
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
14. SEVERANCE COMPENSATION AND BENEFITS NOT IN DEROGATION OF OTHER
BENEFITS. Anything to the contrary herein contained notwithstanding, the
payment or obligation to pay any monies, or granting of any benefits,
rights or privileges to Executive as provided in this Agreement shall not
be in lieu or derogation of the rights and privileges that the Executive
now has or will have under any plans or programs of the Company, except
that the Executive shall not be entitled to the benefits of any other plan
or program of the Company expressly providing for severance or termination
pay if the Executive is terminated without Cause or resigns for Good Reason
after a Change in Control.
15. MISCELLANEOUS. This Agreement is the joint and several
obligation of the Bank and GSB. The terms of this Agreement shall be
governed by, and interpreted and construed in accordance with the
provisions of, the laws of New Jersey and, to the extent applicable,
federal law. This Agreement supersedes all prior agreements and
understandings with respect to the matters covered hereby. The amendment
or termination of this Agreement may be made only in a writing executed by
the Company and the Executive, and no amendment or termination of this
Agreement shall be effective unless and until made in such a writing. This
Agreement shall be binding upon any successor (whether direct or indirect,
by purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal
to the Executive and the Executive may not assign any of his rights or
duties hereunder but this Agreement shall be enforceable by the Executive's
legal representatives, executors or administrators. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement
to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, GSB and the Bank each have caused this
Agreement to be signed by their duly authorized representatives pursuant to
the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first
written above.
ATTEST: GARDEN STATE BANCSHARES, INC.
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
ATTEST: GARDEN STATE BANK
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
WITNESS:
/s/ LISA A. HALPIN /s/ THEODORE D. BESSLER
- ---------------------------- ------------------------------
THEODORE D. BESSLER, Executive
Exhibit 99(c)
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(LUBOW)
THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), is made this 18th
day of April, 1995, among GARDEN STATE BANK ("Bank"), a banking corporation
organized under the laws of New Jersey with its principal office at West
County Line and Bennetts Mills Road, Jackson, New Jersey 08527, GARDEN
STATE BANCSHARES, INC. ("GSB"), a New Jersey corporation which maintains
its principal office at West County Line and Bennetts Mills Road, Jackson,
New Jersey 08527 (GSB and the Bank collectively are the "Company") and
Stuart H. Lubow (the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Bank and GSB;
WHEREAS, the Executive has worked diligently in his position in the
business of the Bank and GSB;
WHEREAS, the Board of Directors of the Bank and GSB believe that the
future services of the Executive are of great value to the Bank and GSB and
that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the
"Board") believes it is imperative that the Company and the Board be able
to rely upon the Executive to continue in his position, and that they be
able to receive and rely upon his advice, if they request it, as to the
best interests of the Company and its shareholders, without concern that
the Executive might be distracted by the personal uncertainties and risks
created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's services
prior to any such activity, the Board of Directors and the Executive have
agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat or occurrence of a bid to take over
control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company
and the Executive, each intending to be legally bound hereby agree as
follows:
1. DEFINITIONS
a. CAUSE. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for
the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes
material injury to the Company as specified in a written notice to the
Executive from the Board of Directors; or (iii) conviction of a crime,
other than a traffic violation, habitual drunkenness, drug abuse, or
excessive absenteeism other than for illness, after a warning (with respect
to drunkenness or absenteeism only) in writing from the Board of Directors
to refrain from such behavior. No act or failure to act on the part of the
Executive shall be considered willful unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
action or omission was in the best interest of the Company.
b. CHANGE IN CONTROL. "Change in Control" shall mean the
occurrence of any of the following events:
(1) The acquisition of the beneficial ownership of at least
25% of GSB's and/or the Bank's voting securities or all or substantially
all of the assets of GSB and/or the Bank by a single person or entity, or a
group of affiliated persons or entities acting in concert.
(2) The merger, consolidation or combination of either GSB
or the Bank with an unaffiliated corporation in which the directors of GSB
and/or the Bank as applicable immediately prior to such merger,
consolidation or combination constitute less than a majority of the board
of directors of the surviving, new or combined entity.
(3) The transfer of all or substantially all of GSB's
and/or Bank's assets.
(4) The election to the board of directors of GSB and/or
the Bank during any consecutive three year period of a group of individuals
constituting a majority of the board who were not serving as directors of
GSB and/or the Bank immediately prior to the consecutive three year period.
c. TIME OF CHANGE IN CONTROL. For purposes of this Agreement, a
Change in Control of the Company shall be deemed to occur on the earlier
of:
(1) The first date on which a single person or entity, or a
group of affiliated persons or entities acting in concert, acquire the
beneficial ownership of 25% or more of GSB and/or the Bank's voting
securities; or
(2) The date of election of such board members as to
constitute a change in the majority of board members during any consecutive
three year period; or
(3) The effective date of any merger, consolidation,
combination or sale of assets.
d. CONTRACT PERIOD. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on
the earlier of (i) the third anniversary of the Change in Control or (ii)
the date the Executive would attain age 65 or (iii) the death of the
Executive.
e. GOOD REASON. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason"
shall mean any of the following, if taken without Executive's express
written consent:
(1) The assignment to Executive of any duties inconsistent
with, or the reduction of powers or functions associated with, Executive's
position, title, duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of Executive from, or
any failure to re-elect Executive to, any position(s) or office(s)
Executive held immediately prior to such Change in Control. A change in
position, title, duties, responsibilities and status or position(s) or
office(s) resulting merely from a merger of the Company into or with
another bank or company shall not meet the requirements of this paragraph
if, and only if, the Executive's new title and responsibilities are
accepted in writing by the Executive, in the sole discretion of the
Executive.
(2) A reduction by the Company in Executive's annual base
compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan in
which Executive participated immediately prior to the Change in Control or
a failure by the Company to continue Executive as a participant in such
plan on at least the same basis as Executive participated in such plan
prior to the Change in Control;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's Employee Stock
Ownership Plan, life insurance plan, health and accident plan, disability
plan, or stock option plan) in which Executive is participating immediately
prior to a Change in Control (except that the Company may institute or
continue plans, programs or arrangements providing Executive with
substantially similar benefits); the taking of any action by the Company
which would adversely affect Executive's participation in or materially
reduce Executive's benefits under, any of such plans, programs or
arrangements; the failure to continue, or the taking of any action which
would deprive Executive, of any material fringe benefit enjoyed by
Executive immediately prior to such Change in Control; or the failure by
the Company to provide Executive with the number of paid vacation days to
which Executive was entitled immediately prior to such Change in Control;
(6) The failure by the Company to obtain an assumption in
writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive
prior to any Change in Control; or
(7) Any purported termination of Executive's employment by
the Company during the term of this Agreement which is not effected
pursuant to all of the requirements of this Agreement; and, for purposes of
this Agreement, no such purported termination shall be effective.
2. EMPLOYMENT. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period
upon the terms and conditions set forth herein.
3. POSITION. During the Contract Period the Executive shall be
employed as a senior officer of Garden State Bank and/or GSB, or such other
corporate or divisional profit center as shall then be the principal
successor to the business, assets and properties of the Company, with the
same title and the same duties and responsibilities as before the Change in
Control. The Executive shall devote his full time and attention to the
business of the Company, and shall not during the Contract Period be
engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of his
which do not require any service on his part in the operation of such
investments.
4. CASH COMPENSATION. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. BASE COMPENSATION. The base compensation shall be equal to
the annual compensation, including both salary and bonus, as were paid to
or accrued for the Executive in the 12 months immediately prior to the
Change in Control. The annual salary portion of base compensation shall be
payable in installments in accordance with the Company's usual payroll
method. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control. Any increase in
the Executive's annual compensation pursuant to paragraph 4(b) below, or
otherwise, shall automatically and permanently increase the base
compensation.
b. ANNUAL INCREASE. The Board of Directors of the Company
during the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the Executive's
compensation and shall award him additional compensation to reflect the
impact of inflation, the Executive's performance, the performance of the
Company and competitive compensation levels, all as determined in the
discretion of the Board of Directors. Additional compensation may take any
form including but not limited to increases in the annual salary, incentive
bonuses and/or bonuses not geared to performance. However, in no event
shall the percentage increase in annual compensation be less than the
annual percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (New York and Northern New Jersey All Items)
during the preceding twelve months.
5. EXPENSES AND FRINGE BENEFITS. During the Contract Period, the
Executive shall be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in the same
manner and to the same extent as such expenses were previously reimbursed
to him immediately prior to the Change in Control. If prior to the Change
in Control, the Executive was entitled to the use of an automobile, he
shall be entitled to the same use of an automobile at least comparable to
the automobile provided to him prior to the Change in Control, and he shall
be entitled to vacations and sick days, in accordance with the practices
and procedures of the Company, as such existed immediately prior to the
Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other
benefits enjoyed, from time to time, by Executive officers of the Company,
all upon terms as favorable as those enjoyed by other Executive officers of
the Company. Notwithstanding anything in this section to the contrary, if
the Company adopts any change in the expenses allowed to, or fringe
benefits provided for, Executive officers of the Company, and such policy
is uniformly applied to all Executive officers of the Company, and any
successor or acquiror of the Company, if any, including the chief Executive
officer of such entities, then no such change shall be deemed to be
contrary to this section.
6. TERMINATION FOR CAUSE. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the termination. In
the event of termination for Cause the Executive shall not be entitled to
any further benefits under this Agreement.
7. DISABILITY. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 6
consecutive months in any 18 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall not be
entitled to any further benefits under this Agreement other than payments
under any disability policy which the Company may obtain for the benefit of
senior officers generally.
8. DEATH BENEFITS. Upon the Executive's death during the Contract
Period, the Executive shall be entitled to the benefits of any life
insurance policy paid for by the Company but his estate shall not be
entitled to any further benefits under this Agreement.
9. TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. The
Company may terminate the Executive without Cause during the Contract
Period by 20 days prior written notice to the Executive, and the Executive
may resign for Good Reason during the Contract Period upon four weeks'
prior written notice to the Company specifying the Good Reason. If the
Company terminates the Executive's employment during the Contract Period
without Cause or if the Executive Resigns for Good Reason, the Company
shall within 20 business days of the termination of employment pay the
Executive a lump sum equal to 2.99 times the highest annual compensation,
including only salary and cash bonus, paid to the Executive during any of
the three calendar years immediately prior to the Change in Control (the
"Lump Sum Payment"). During the remainder of the Contract Period the
Company also shall continue to provide the Executive with and pay for
medical and hospital insurance, disability insurance and life insurance, as
were provided and paid for at the time of the termination of his employment
with the Company. The Company shall also sell to the Executive for a
purchase price of $1.00 the automobile, if any, used by the Executive while
employed by the Company.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period.
If the Company fails to pay the Executive the Lump Sum Payment or to
provide him with the benefits due under this section, the Executive, after
giving 10 days' written notice to the Company identifying the Company's
failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his
enforcement against the Company of the terms of this Agreement. The
Company agrees to pay such legal fees and expenses to the Executive on
demand. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such
fees without reasonable cause and in bad faith.
10. RESIGNATION WITHOUT GOOD REASON. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contact
Period without Good Reason, but upon such resignation the Executive shall
not be entitled to any additional compensation for the time after which he
ceases to be employed by the Company, and shall not be entitled to any of
the other benefits provided hereunder. No such resignation shall be
effective unless in writing with four weeks' notice thereof.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
a. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Except in the
course of his employment with the Company and in the pursuit of the
business of the Company or any of its subsidiaries or affiliates, the
Executive shall not, at any time during or following the Contract Period,
disclose or use, any confidential information or proprietary data of the
Company or any of its subsidiaries or affiliates. The Executive agrees
that, among other things, all information concerning the identity of and
the Company's relations with its customers is confidential information.
b. SPECIFIC PERFORMANCE. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies
as a result of the breach of this section. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
force and effect of the remaining valid portions.
c. SURVIVAL. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. TERM AND EFFECT PRIOR TO CHANGE IN CONTROL.
a. TERM. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for
a period of 3 years from the date hereof (the "Initial Term") or until the
end of the Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on the anniversary
date hereof (so that the Initial Term is always 3 years) unless the Board
of Directors of GSB, by a majority vote of the Directors then in office
votes not to extend the Initial Term. The Executive shall be promptly
notified of the passage of such resolution.
b. NO EFFECT PRIOR TO CHANGE IN CONTROL. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement, plan
or arrangements. The rights, duties and benefits provided hereunder shall
only become effective upon a Change in Control. If the employment of the
Executive by the Company is terminated for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further force and effect.
13. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.
a. Anything in this Agreement to the contrary notwithstanding,
prior to the payment of any compensation or benefits payable under Section
9 hereof, the certified public accountants of the Company immediately prior
to a Change of Control (the "Certified Public Accountants) shall determine
as promptly as practical and in any event within 20 business days following
the termination of employment of Executive whether any payment or
distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise) (a "Payment") would more likely than not be
nondeductible by the Company for Federal income purposes because of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if
it is then the aggregate present value of amounts payable or distributable
to or for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are thereinafter
referred to as "Agreement Payments") shall be reduced (but not below zero)
to the reduced Amount. For purposes of this paragraph, the "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment
to be nondeductible by the Company because of said Section 280G of the
Code.
b. If under paragraph (a) of this section the Certified Public
Accountants determine that any Payment would more likely than not be
nondeductible by the Company because of Section 280G of the Code, the
Company shall promptly give the Executive notice to that effect and a copy
of the detailed calculation thereof and of the Reduced Amount, and the
Executive may then elect, in his sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Agreement Payments equals the
Reduced Amount), and shall advise the Company in writing of his election
within 20 business days of his receipt of notice. If no such election is
made by the Executive within such 20-day period, the Company may elect
which and how much of the Agreement Payments shall be eliminated or reduced
(as long as after such election the Aggregate present Value of the
Agreement Payments equals the Reduced Amount) and shall notify the
Executive promptly of such election. For purposes of this paragraph,
present Value shall be determined in accordance with Section 280G(d)(4) of
the Code. All determinations made by the Certified Public Accountants
shall be binding upon the Company and Executive shall be made within 20
days of a termination of employment of Executive. The Company may suspend
for a period of up to 30 days after termination of employment the Lump Sum
Payment and any other payments or benefits due to the Executive under
Section 9 hereof until the Certified Public Accountants finish the
determination and the Executive (or the Company, as the case may be) elect
how to reduce the Agreement Payments, if necessary. As promptly as
practicable following such determination and the elections hereunder, the
Company shall pay to or distribute to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement and shall
promptly pay to or distribute for the benefit of Executive in the future
such amounts as become due to Executive under this Agreement.
c. As a result of the uncertainty in the application of Section
280G of the Code, it is possible that Agreement Payments may have been made
by the Company which should not have been made ("Overpayment") of that
additional Agreement Payments which will have not been made by the Company
could have been made ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the
Certified Public Accountants, based upon the assertion of a deficiency by
the Internal Revenue Service against the Company or Executive which said
Certified Public Accountants believe has a high probability of success,
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Executive which Executive shall repay
to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code; provided, however, that
no amount shall be payable by Executive to the Company in and to the extent
such payment would not reduce the amount which is subject to taxation under
Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an
Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive together with interest
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
14. SEVERANCE COMPENSATION AND BENEFITS NOT IN DEROGATION OF OTHER
BENEFITS. Anything to the contrary herein contained notwithstanding, the
payment or obligation to pay any monies, or granting of any benefits,
rights or privileges to Executive as provided in this Agreement shall not
be in lieu or derogation of the rights and privileges that the Executive
now has or will have under any plans or programs of the Company, except
that the Executive shall not be entitled to the benefits of any other plan
or program of the Company expressly providing for severance or termination
pay if the Executive is terminated without Cause or resigns for Good Reason
after a Change in Control.
15. MISCELLANEOUS. This Agreement is the joint and several
obligation of the Bank and GSB. The terms of this Agreement shall be
governed by, and interpreted and construed in accordance with the
provisions of, the laws of New Jersey and, to the extent applicable,
federal law. This Agreement supersedes all prior agreements and
understandings with respect to the matters covered hereby. The amendment
or termination of this Agreement may be made only in a writing executed by
the Company and the Executive, and no amendment or termination of this
Agreement shall be effective unless and until made in such a writing. This
Agreement shall be binding upon any successor (whether direct or indirect,
by purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal
to the Executive and the Executive may not assign any of his rights or
duties hereunder but this Agreement shall be enforceable by the Executive's
legal representatives, executors or administrators. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement
to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, GSB and the Bank each have caused this
Agreement to be signed by their duly authorized representatives pursuant to
the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first
written above.
ATTEST: GARDEN STATE BANCSHARES, INC.
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
ATTEST: GARDEN STATE BANK
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
WITNESS:
/s/ LISA A. HALPIN /s/ STUART H. LUBOW
- ---------------------------- ------------------------------
STUART H. LUBOW, Executive
Exhibit 99(d)
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(COURTRIGHT)
THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), is made this 18th
day of April, 1995, among GARDEN STATE BANK ("Bank"), a banking corporation
organized under the laws of New Jersey with its principal office at West
County Line and Bennetts Mills Road, Jackson, New Jersey 08527, GARDEN
STATE BANCSHARES, INC. ("GSB"), a New Jersey corporation which maintains
its principal office at West County Line and Bennetts Mills Road, Jackson,
New Jersey 08527 (GSB and the Bank collectively are the "Company") and
Wayne Courtright (the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Bank and GSB;
WHEREAS, the Executive has worked diligently in his position in the
business of the Bank and GSB;
WHEREAS, the Board of Directors of the Bank and GSB believe that the
future services of the Executive are of great value to the Bank and GSB and
that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the
"Board") believes it is imperative that the Company and the Board be able
to rely upon the Executive to continue in his position, and that they be
able to receive and rely upon his advice, if they request it, as to the
best interests of the Company and its shareholders, without concern that
the Executive might be distracted by the personal uncertainties and risks
created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's services
prior to any such activity, the Board of Directors and the Executive have
agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat or occurrence of a bid to take over
control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company
and the Executive, each intending to be legally bound hereby agree as
follows:
1. DEFINITIONS
a. CAUSE. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for
the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes
material injury to the Company as specified in a written notice to the
Executive from the Board of Directors; or (iii) conviction of a crime,
other than a traffic violation, habitual drunkenness, drug abuse, or
excessive absenteeism other than for illness, after a warning (with respect
to drunkenness or absenteeism only) in writing from the Board of Directors
to refrain from such behavior. No act or failure to act on the part of the
Executive shall be considered willful unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
action or omission was in the best interest of the Company.
b. CHANGE IN CONTROL. "Change in Control" shall mean the
occurrence of any of the following events:
(1) The acquisition of the beneficial ownership of at least
25% of GSB's and/or the Bank's voting securities or all or substantially
all of the assets of GSB and/or the Bank by a single person or entity, or a
group of affiliated persons or entities acting in concert.
(2) The merger, consolidation or combination of either GSB
or the Bank with an unaffiliated corporation in which the directors of GSB
and/or the Bank as applicable immediately prior to such merger,
consolidation or combination constitute less than a majority of the board
of directors of the surviving, new or combined entity.
(3) The transfer of all or substantially all of GSB's
and/or Bank's assets.
(4) The election to the board of directors of GSB and/or
the Bank during any consecutive three year period of a group of individuals
constituting a majority of the board who were not serving as directors of
GSB and/or the Bank immediately prior to the consecutive three year period.
c. TIME OF CHANGE IN CONTROL. For purposes of this Agreement, a
Change in Control of the Company shall be deemed to occur on the earlier
of:
(1) The first date on which a single person or entity, or a
group of affiliated persons or entities acting in concert, acquire the
beneficial ownership of 25% or more of GSB and/or the Bank's voting
securities; or
(2) The date of election of such board members as to
constitute a change in the majority of board members during any consecutive
three year period; or
(3) The effective date of any merger, consolidation,
combination or sale of assets.
d. CONTRACT PERIOD. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on
the earlier of (i) the third anniversary of the Change in Control or (ii)
the date the Executive would attain age 65 or (iii) the death of the
Executive.
e. GOOD REASON. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason"
shall mean any of the following, if taken without Executive's express
written consent:
(1) The assignment to Executive of any duties inconsistent
with, or the reduction of powers or functions associated with, Executive's
position, title, duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of Executive from, or
any failure to re-elect Executive to, any position(s) or office(s)
Executive held immediately prior to such Change in Control. A change in
position, title, duties, responsibilities and status or position(s) or
office(s) resulting merely from a merger of the Company into or with
another bank or company shall not meet the requirements of this paragraph
if, and only if, the Executive's new title and responsibilities are
accepted in writing by the Executive, in the sole discretion of the
Executive.
(2) A reduction by the Company in Executive's annual base
compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan in
which Executive participated immediately prior to the Change in Control or
a failure by the Company to continue Executive as a participant in such
plan on at least the same basis as Executive participated in such plan
prior to the Change in Control;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's Employee Stock
Ownership Plan, life insurance plan, health and accident plan, disability
plan, or stock option plan) in which Executive is participating immediately
prior to a Change in Control (except that the Company may institute or
continue plans, programs or arrangements providing Executive with
substantially similar benefits); the taking of any action by the Company
which would adversely affect Executive's participation in or materially
reduce Executive's benefits under, any of such plans, programs or
arrangements; the failure to continue, or the taking of any action which
would deprive Executive, of any material fringe benefit enjoyed by
Executive immediately prior to such Change in Control; or the failure by
the Company to provide Executive with the number of paid vacation days to
which Executive was entitled immediately prior to such Change in Control;
(6) The failure by the Company to obtain an assumption in
writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive
prior to any Change in Control; or
(7) Any purported termination of Executive's employment by
the Company during the term of this Agreement which is not effected
pursuant to all of the requirements of this Agreement; and, for purposes of
this Agreement, no such purported termination shall be effective.
2. EMPLOYMENT. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period
upon the terms and conditions set forth herein.
3. POSITION. During the Contract Period the Executive shall be
employed as a senior officer of Garden State Bank and/or GSB, or such other
corporate or divisional profit center as shall then be the principal
successor to the business, assets and properties of the Company, with the
same title and the same duties and responsibilities as before the Change in
Control. The Executive shall devote his full time and attention to the
business of the Company, and shall not during the Contract Period be
engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of his
which do not require any service on his part in the operation of such
investments.
4. CASH COMPENSATION. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. BASE COMPENSATION. The base compensation shall be equal to
the annual compensation, including both salary and bonus, as were paid to
or accrued for the Executive in the 12 months immediately prior to the
Change in Control. The annual salary portion of base compensation shall be
payable in installments in accordance with the Company's usual payroll
method. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control. Any increase in
the Executive's annual compensation pursuant to paragraph 4(b) below, or
otherwise, shall automatically and permanently increase the base
compensation.
b. ANNUAL INCREASE. The Board of Directors of the Company
during the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the Executive's
compensation and shall award him additional compensation to reflect the
impact of inflation, the Executive's performance, the performance of the
Company and competitive compensation levels, all as determined in the
discretion of the Board of Directors. Additional compensation may take any
form including but not limited to increases in the annual salary, incentive
bonuses and/or bonuses not geared to performance. However, in no event
shall the percentage increase in annual compensation be less than the
annual percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (New York and Northern New Jersey All Items)
during the preceding twelve months.
5. EXPENSES AND FRINGE BENEFITS. During the Contract Period, the
Executive shall be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in the same
manner and to the same extent as such expenses were previously reimbursed
to him immediately prior to the Change in Control. If prior to the Change
in Control, the Executive was entitled to the use of an automobile, he
shall be entitled to the same use of an automobile at least comparable to
the automobile provided to him prior to the Change in Control, and he shall
be entitled to vacations and sick days, in accordance with the practices
and procedures of the Company, as such existed immediately prior to the
Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other
benefits enjoyed, from time to time, by Executive officers of the Company,
all upon terms as favorable as those enjoyed by other Executive officers of
the Company. Notwithstanding anything in this section to the contrary, if
the Company adopts any change in the expenses allowed to, or fringe
benefits provided for, Executive officers of the Company, and such policy
is uniformly applied to all Executive officers of the Company, and any
successor or acquiror of the Company, if any, including the chief Executive
officer of such entities, then no such change shall be deemed to be
contrary to this section.
6. TERMINATION FOR CAUSE. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the termination. In
the event of termination for Cause the Executive shall not be entitled to
any further benefits under this Agreement.
7. DISABILITY. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 6
consecutive months in any 18 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall not be
entitled to any further benefits under this Agreement other than payments
under any disability policy which the Company may obtain for the benefit of
senior officers generally.
8. DEATH BENEFITS. Upon the Executive's death during the Contract
Period, the Executive shall be entitled to the benefits of any life
insurance policy paid for by the Company but his estate shall not be
entitled to any further benefits under this Agreement.
9. TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. The
Company may terminate the Executive without Cause during the Contract
Period by 20 days prior written notice to the Executive, and the Executive
may resign for Good Reason during the Contract Period upon four weeks'
prior written notice to the Company specifying the Good Reason. If the
Company terminates the Executive's employment during the Contract Period
without Cause or if the Executive Resigns for Good Reason, the Company
shall within 20 business days of the termination of employment pay the
Executive a lump sum equal to 2.0 times the highest annual compensation,
including only salary and cash bonus, paid to the Executive during any of
the three calendar years immediately prior to the Change in Control (the
"Lump Sum Payment"). During the remainder of the Contract Period the
Company also shall continue to provide the Executive with and pay for
medical and hospital insurance, disability insurance and life insurance, as
were provided and paid for at the time of the termination of his employment
with the Company. The Company shall also sell to the Executive for a
purchase price of $1.00 the automobile, if any, used by the Executive while
employed by the Company.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period.
If the Company fails to pay the Executive the Lump Sum Payment or to
provide him with the benefits due under this section, the Executive, after
giving 10 days' written notice to the Company identifying the Company's
failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his
enforcement against the Company of the terms of this Agreement. The
Company agrees to pay such legal fees and expenses to the Executive on
demand. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such
fees without reasonable cause and in bad faith.
10. RESIGNATION WITHOUT GOOD REASON. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contact
Period without Good Reason, but upon such resignation the Executive shall
not be entitled to any additional compensation for the time after which he
ceases to be employed by the Company, and shall not be entitled to any of
the other benefits provided hereunder. No such resignation shall be
effective unless in writing with four weeks' notice thereof.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
a. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Except in the
course of his employment with the Company and in the pursuit of the
business of the Company or any of its subsidiaries or affiliates, the
Executive shall not, at any time during or following the Contract Period,
disclose or use, any confidential information or proprietary data of the
Company or any of its subsidiaries or affiliates. The Executive agrees
that, among other things, all information concerning the identity of and
the Company's relations with its customers is confidential information.
b. SPECIFIC PERFORMANCE. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies
as a result of the breach of this section. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
force and effect of the remaining valid portions.
c. SURVIVAL. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. TERM AND EFFECT PRIOR TO CHANGE IN CONTROL.
a. TERM. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for
a period of 3 years from the date hereof (the "Initial Term") or until the
end of the Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on the anniversary
date hereof (so that the Initial Term is always 3 years) unless the Board
of Directors of GSB, by a majority vote of the Directors then in office
votes not to extend the Initial Term. The Executive shall be promptly
notified of the passage of such resolution.
b. NO EFFECT PRIOR TO CHANGE IN CONTROL. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement, plan
or arrangements. The rights, duties and benefits provided hereunder shall
only become effective upon a Change in Control. If the employment of the
Executive by the Company is terminated for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further force and effect.
13. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.
a. Anything in this Agreement to the contrary notwithstanding,
prior to the payment of any compensation or benefits payable under Section
9 hereof, the certified public accountants of the Company immediately prior
to a Change of Control (the "Certified Public Accountants) shall determine
as promptly as practical and in any event within 20 business days following
the termination of employment of Executive whether any payment or
distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise) (a "Payment") would more likely than not be
nondeductible by the Company for Federal income purposes because of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if
it is then the aggregate present value of amounts payable or distributable
to or for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are thereinafter
referred to as "Agreement Payments") shall be reduced (but not below zero)
to the reduced Amount. For purposes of this paragraph, the "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment
to be nondeductible by the Company because of said Section 280G of the
Code.
b. If under paragraph (a) of this section the Certified Public
Accountants determine that any Payment would more likely than not be
nondeductible by the Company because of Section 280G of the Code, the
Company shall promptly give the Executive notice to that effect and a copy
of the detailed calculation thereof and of the Reduced Amount, and the
Executive may then elect, in his sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Agreement Payments equals the
Reduced Amount), and shall advise the Company in writing of his election
within 20 business days of his receipt of notice. If no such election is
made by the Executive within such 20-day period, the Company may elect
which and how much of the Agreement Payments shall be eliminated or reduced
(as long as after such election the Aggregate present Value of the
Agreement Payments equals the Reduced Amount) and shall notify the
Executive promptly of such election. For purposes of this paragraph,
present Value shall be determined in accordance with Section 280G(d)(4) of
the Code. All determinations made by the Certified Public Accountants
shall be binding upon the Company and Executive shall be made within 20
days of a termination of employment of Executive. The Company may suspend
for a period of up to 30 days after termination of employment the Lump Sum
Payment and any other payments or benefits due to the Executive under
Section 9 hereof until the Certified Public Accountants finish the
determination and the Executive (or the Company, as the case may be) elect
how to reduce the Agreement Payments, if necessary. As promptly as
practicable following such determination and the elections hereunder, the
Company shall pay to or distribute to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement and shall
promptly pay to or distribute for the benefit of Executive in the future
such amounts as become due to Executive under this Agreement.
c. As a result of the uncertainty in the application of Section
280G of the Code, it is possible that Agreement Payments may have been made
by the Company which should not have been made ("Overpayment") of that
additional Agreement Payments which will have not been made by the Company
could have been made ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the
Certified Public Accountants, based upon the assertion of a deficiency by
the Internal Revenue Service against the Company or Executive which said
Certified Public Accountants believe has a high probability of success,
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Executive which Executive shall repay
to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code; provided, however, that
no amount shall be payable by Executive to the Company in and to the extent
such payment would not reduce the amount which is subject to taxation under
Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an
Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive together with interest
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
14. SEVERANCE COMPENSATION AND BENEFITS NOT IN DEROGATION OF OTHER
BENEFITS. Anything to the contrary herein contained notwithstanding, the
payment or obligation to pay any monies, or granting of any benefits,
rights or privileges to Executive as provided in this Agreement shall not
be in lieu or derogation of the rights and privileges that the Executive
now has or will have under any plans or programs of the Company, except
that the Executive shall not be entitled to the benefits of any other plan
or program of the Company expressly providing for severance or termination
pay if the Executive is terminated without Cause or resigns for Good Reason
after a Change in Control.
15. MISCELLANEOUS. This Agreement is the joint and several
obligation of the Bank and GSB. The terms of this Agreement shall be
governed by, and interpreted and construed in accordance with the
provisions of, the laws of New Jersey and, to the extent applicable,
federal law. This Agreement supersedes all prior agreements and
understandings with respect to the matters covered hereby. The amendment
or termination of this Agreement may be made only in a writing executed by
the Company and the Executive, and no amendment or termination of this
Agreement shall be effective unless and until made in such a writing. This
Agreement shall be binding upon any successor (whether direct or indirect,
by purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal
to the Executive and the Executive may not assign any of his rights or
duties hereunder but this Agreement shall be enforceable by the Executive's
legal representatives, executors or administrators. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement
to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, GSB and the Bank each have caused this
Agreement to be signed by their duly authorized representatives pursuant to
the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first
written above.
ATTEST: GARDEN STATE BANCSHARES, INC.
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
ATTEST: GARDEN STATE BANK
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
WITNESS:
/s/ LISA A. HALPIN /s/ WAYNE COURTRIGHT
- ---------------------------- ------------------------------
WAYNE COURTRIGHT, Executive
Exhibit 99(e)
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
(ENGLISH)
THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), is made this 18th
day of April, 1995, among GARDEN STATE BANK ("Bank"), a banking corporation
organized under the laws of New Jersey with its principal office at West
County Line and Bennetts Mills Road, Jackson, New Jersey 08527, GARDEN
STATE BANCSHARES, INC. ("GSB"), a New Jersey corporation which maintains
its principal office at West County Line and Bennetts Mills Road, Jackson,
New Jersey 08527 (GSB and the Bank collectively are the "Company") and
Robert English (the "Executive").
BACKGROUND
WHEREAS, the Executive is employed by the Bank and GSB;
WHEREAS, the Executive has worked diligently in his position in the
business of the Bank and GSB;
WHEREAS, the Board of Directors of the Bank and GSB believe that the
future services of the Executive are of great value to the Bank and GSB and
that it is important for the growth and development of the Bank that the
Executive continue in his position;
WHEREAS, if the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equities
securities of, the Company, the Board of Directors of the Company (the
"Board") believes it is imperative that the Company and the Board be able
to rely upon the Executive to continue in his position, and that they be
able to receive and rely upon his advice, if they request it, as to the
best interests of the Company and its shareholders, without concern that
the Executive might be distracted by the personal uncertainties and risks
created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's services
prior to any such activity, the Board of Directors and the Executive have
agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat or occurrence of a bid to take over
control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company
and the Executive, each intending to be legally bound hereby agree as
follows:
1. DEFINITIONS
a. CAUSE. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for
the Company under this Agreement after at least one warning in writing from
the Company's Board of Directors identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which causes
material injury to the Company as specified in a written notice to the
Executive from the Board of Directors; or (iii) conviction of a crime,
other than a traffic violation, habitual drunkenness, drug abuse, or
excessive absenteeism other than for illness, after a warning (with respect
to drunkenness or absenteeism only) in writing from the Board of Directors
to refrain from such behavior. No act or failure to act on the part of the
Executive shall be considered willful unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
action or omission was in the best interest of the Company.
b. CHANGE IN CONTROL. "Change in Control" shall mean the
occurrence of any of the following events:
(1) The acquisition of the beneficial ownership of at least
25% of GSB's and/or the Bank's voting securities or all or substantially
all of the assets of GSB and/or the Bank by a single person or entity, or a
group of affiliated persons or entities acting in concert.
(2) The merger, consolidation or combination of either GSB
or the Bank with an unaffiliated corporation in which the directors of GSB
and/or the Bank as applicable immediately prior to such merger,
consolidation or combination constitute less than a majority of the board
of directors of the surviving, new or combined entity.
(3) The transfer of all or substantially all of GSB's
and/or Bank's assets.
(4) The election to the board of directors of GSB and/or
the Bank during any consecutive three year period of a group of individuals
constituting a majority of the board who were not serving as directors of
GSB and/or the Bank immediately prior to the consecutive three year period.
c. TIME OF CHANGE IN CONTROL. For purposes of this Agreement, a
Change in Control of the Company shall be deemed to occur on the earlier
of:
(1) The first date on which a single person or entity, or a
group of affiliated persons or entities acting in concert, acquire the
beneficial ownership of 25% or more of GSB and/or the Bank's voting
securities; or
(2) The date of election of such board members as to
constitute a change in the majority of board members during any consecutive
three year period; or
(3) The effective date of any merger, consolidation,
combination or sale of assets.
d. CONTRACT PERIOD. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on
the earlier of (i) the third anniversary of the Change in Control or (ii)
the date the Executive would attain age 65 or (iii) the death of the
Executive.
e. GOOD REASON. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason"
shall mean any of the following, if taken without Executive's express
written consent:
(1) The assignment to Executive of any duties inconsistent
with, or the reduction of powers or functions associated with, Executive's
position, title, duties, responsibilities and status with the Company
immediately prior to a Change in Control; any removal of Executive from, or
any failure to re-elect Executive to, any position(s) or office(s)
Executive held immediately prior to such Change in Control. A change in
position, title, duties, responsibilities and status or position(s) or
office(s) resulting merely from a merger of the Company into or with
another bank or company shall not meet the requirements of this paragraph
if, and only if, the Executive's new title and responsibilities are
accepted in writing by the Executive, in the sole discretion of the
Executive.
(2) A reduction by the Company in Executive's annual base
compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan in
which Executive participated immediately prior to the Change in Control or
a failure by the Company to continue Executive as a participant in such
plan on at least the same basis as Executive participated in such plan
prior to the Change in Control;
(4) The Company's transfer of Executive to another
geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on Company's business
to an extent substantially consistent with Executive's business travel
obligations immediately prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without
limitation the Company's 401(k) plan, the Company's Employee Stock
Ownership Plan, life insurance plan, health and accident plan, disability
plan, or stock option plan) in which Executive is participating immediately
prior to a Change in Control (except that the Company may institute or
continue plans, programs or arrangements providing Executive with
substantially similar benefits); the taking of any action by the Company
which would adversely affect Executive's participation in or materially
reduce Executive's benefits under, any of such plans, programs or
arrangements; the failure to continue, or the taking of any action which
would deprive Executive, of any material fringe benefit enjoyed by
Executive immediately prior to such Change in Control; or the failure by
the Company to provide Executive with the number of paid vacation days to
which Executive was entitled immediately prior to such Change in Control;
(6) The failure by the Company to obtain an assumption in
writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive
prior to any Change in Control; or
(7) Any purported termination of Executive's employment by
the Company during the term of this Agreement which is not effected
pursuant to all of the requirements of this Agreement; and, for purposes of
this Agreement, no such purported termination shall be effective.
2. EMPLOYMENT. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment, during the Contract Period
upon the terms and conditions set forth herein.
3. POSITION. During the Contract Period the Executive shall be
employed as a senior officer of Garden State Bank and/or GSB, or such other
corporate or divisional profit center as shall then be the principal
successor to the business, assets and properties of the Company, with the
same title and the same duties and responsibilities as before the Change in
Control. The Executive shall devote his full time and attention to the
business of the Company, and shall not during the Contract Period be
engaged in any other business activity. This paragraph shall not be
construed as preventing the Executive from managing any investments of his
which do not require any service on his part in the operation of such
investments.
4. CASH COMPENSATION. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
a. BASE COMPENSATION. The base compensation shall be equal to
the annual compensation, including both salary and bonus, as were paid to
or accrued for the Executive in the 12 months immediately prior to the
Change in Control. The annual salary portion of base compensation shall be
payable in installments in accordance with the Company's usual payroll
method. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control. Any increase in
the Executive's annual compensation pursuant to paragraph 4(b) below, or
otherwise, shall automatically and permanently increase the base
compensation.
b. ANNUAL INCREASE. The Board of Directors of the Company
during the Contract Period shall review annually, or at more frequent
intervals which the Board determines is appropriate, the Executive's
compensation and shall award him additional compensation to reflect the
impact of inflation, the Executive's performance, the performance of the
Company and competitive compensation levels, all as determined in the
discretion of the Board of Directors. Additional compensation may take any
form including but not limited to increases in the annual salary, incentive
bonuses and/or bonuses not geared to performance. However, in no event
shall the percentage increase in annual compensation be less than the
annual percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (New York and Northern New Jersey All Items)
during the preceding twelve months.
5. EXPENSES AND FRINGE BENEFITS. During the Contract Period, the
Executive shall be entitled to reimbursement for all business expenses
incurred by him with respect to the business of the Company in the same
manner and to the same extent as such expenses were previously reimbursed
to him immediately prior to the Change in Control. If prior to the Change
in Control, the Executive was entitled to the use of an automobile, he
shall be entitled to the same use of an automobile at least comparable to
the automobile provided to him prior to the Change in Control, and he shall
be entitled to vacations and sick days, in accordance with the practices
and procedures of the Company, as such existed immediately prior to the
Change in Control. During the Contract Period, the Executive also shall be
entitled to hospital, health, medical and life insurance, and any other
benefits enjoyed, from time to time, by Executive officers of the Company,
all upon terms as favorable as those enjoyed by other Executive officers of
the Company. Notwithstanding anything in this section to the contrary, if
the Company adopts any change in the expenses allowed to, or fringe
benefits provided for, Executive officers of the Company, and such policy
is uniformly applied to all Executive officers of the Company, and any
successor or acquiror of the Company, if any, including the chief Executive
officer of such entities, then no such change shall be deemed to be
contrary to this section.
6. TERMINATION FOR CAUSE. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the
termination which notice shall specify the reasons for the termination. In
the event of termination for Cause the Executive shall not be entitled to
any further benefits under this Agreement.
7. DISABILITY. During the Contract Period if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for 6
consecutive months in any 18 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall not be
entitled to any further benefits under this Agreement other than payments
under any disability policy which the Company may obtain for the benefit of
senior officers generally.
8. DEATH BENEFITS. Upon the Executive's death during the Contract
Period, the Executive shall be entitled to the benefits of any life
insurance policy paid for by the Company but his estate shall not be
entitled to any further benefits under this Agreement.
9. TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. The
Company may terminate the Executive without Cause during the Contract
Period by 20 days prior written notice to the Executive, and the Executive
may resign for Good Reason during the Contract Period upon four weeks'
prior written notice to the Company specifying the Good Reason. If the
Company terminates the Executive's employment during the Contract Period
without Cause or if the Executive Resigns for Good Reason, the Company
shall within 20 business days of the termination of employment pay the
Executive a lump sum equal to 1.0 times the annualized salary paid to the
Executive immediately prior to the Change in Control (the "Lump Sum
Payment"). During the remainder of the Contract Period the Company also
shall continue to provide the Executive with and pay for medical and
hospital insurance, disability insurance and life insurance, as were
provided and paid for at the time of the termination of his employment with
the Company. The Company shall also sell to the Executive for a purchase
price of $1.00 the automobile, if any, used by the Executive while employed
by the Company.
The Executive shall not have a duty to mitigate the damages suffered
by him in connection with the termination by the Company of his employment
without Cause or a resignation for Good Reason during the Contract Period.
If the Company fails to pay the Executive the Lump Sum Payment or to
provide him with the benefits due under this section, the Executive, after
giving 10 days' written notice to the Company identifying the Company's
failure, shall be entitled to recover from the Company all of his
reasonable legal fees and expenses incurred in connection with his
enforcement against the Company of the terms of this Agreement. The
Company agrees to pay such legal fees and expenses to the Executive on
demand. The Executive shall be denied payment of his legal fees and
expenses only if a court finds that the Executive sought payment of such
fees without reasonable cause and in bad faith.
10. RESIGNATION WITHOUT GOOD REASON. The Executive shall be entitled
to resign from the employment of the Company at any time during the Contact
Period without Good Reason, but upon such resignation the Executive shall
not be entitled to any additional compensation for the time after which he
ceases to be employed by the Company, and shall not be entitled to any of
the other benefits provided hereunder. No such resignation shall be
effective unless in writing with four weeks' notice thereof.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
a. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Except in the
course of his employment with the Company and in the pursuit of the
business of the Company or any of its subsidiaries or affiliates, the
Executive shall not, at any time during or following the Contract Period,
disclose or use, any confidential information or proprietary data of the
Company or any of its subsidiaries or affiliates. The Executive agrees
that, among other things, all information concerning the identity of and
the Company's relations with its customers is confidential information.
b. SPECIFIC PERFORMANCE. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies
as a result of the breach of this section. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
force and effect of the remaining valid portions.
c. SURVIVAL. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. TERM AND EFFECT PRIOR TO CHANGE IN CONTROL.
a. TERM. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and shall remain in effect for
a period of 3 years from the date hereof (the "Initial Term") or until the
end of the Contract Period, whichever is later. The Initial Term shall be
automatically extended for an additional one year period on the anniversary
date hereof (so that the Initial Term is always 3 years) unless the Board
of Directors of GSB, by a majority vote of the Directors then in office
votes not to extend the Initial Term. The Executive shall be promptly
notified of the passage of such resolution.
b. NO EFFECT PRIOR TO CHANGE IN CONTROL. This Agreement shall
not affect any rights of the Company or the Executive prior to a Change in
Control or any rights of the Executive granted in any other agreement, plan
or arrangements. The rights, duties and benefits provided hereunder shall
only become effective upon a Change in Control. If the employment of the
Executive by the Company is terminated for any reason prior to a Change in
Control, this Agreement shall thereafter be of no further force and effect.
13. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.
a. Anything in this Agreement to the contrary notwithstanding,
prior to the payment of any compensation or benefits payable under Section
9 hereof, the certified public accountants of the Company immediately prior
to a Change of Control (the "Certified Public Accountants) shall determine
as promptly as practical and in any event within 20 business days following
the termination of employment of Executive whether any payment or
distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise) (a "Payment") would more likely than not be
nondeductible by the Company for Federal income purposes because of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if
it is then the aggregate present value of amounts payable or distributable
to or for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are thereinafter
referred to as "Agreement Payments") shall be reduced (but not below zero)
to the reduced Amount. For purposes of this paragraph, the "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment
to be nondeductible by the Company because of said Section 280G of the
Code.
b. If under paragraph (a) of this section the Certified Public
Accountants determine that any Payment would more likely than not be
nondeductible by the Company because of Section 280G of the Code, the
Company shall promptly give the Executive notice to that effect and a copy
of the detailed calculation thereof and of the Reduced Amount, and the
Executive may then elect, in his sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Agreement Payments equals the
Reduced Amount), and shall advise the Company in writing of his election
within 20 business days of his receipt of notice. If no such election is
made by the Executive within such 20-day period, the Company may elect
which and how much of the Agreement Payments shall be eliminated or reduced
(as long as after such election the Aggregate present Value of the
Agreement Payments equals the Reduced Amount) and shall notify the
Executive promptly of such election. For purposes of this paragraph,
present Value shall be determined in accordance with Section 280G(d)(4) of
the Code. All determinations made by the Certified Public Accountants
shall be binding upon the Company and Executive shall be made within 20
days of a termination of employment of Executive. The Company may suspend
for a period of up to 30 days after termination of employment the Lump Sum
Payment and any other payments or benefits due to the Executive under
Section 9 hereof until the Certified Public Accountants finish the
determination and the Executive (or the Company, as the case may be) elect
how to reduce the Agreement Payments, if necessary. As promptly as
practicable following such determination and the elections hereunder, the
Company shall pay to or distribute to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement and shall
promptly pay to or distribute for the benefit of Executive in the future
such amounts as become due to Executive under this Agreement.
c. As a result of the uncertainty in the application of Section
280G of the Code, it is possible that Agreement Payments may have been made
by the Company which should not have been made ("Overpayment") of that
additional Agreement Payments which will have not been made by the Company
could have been made ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the
Certified Public Accountants, based upon the assertion of a deficiency by
the Internal Revenue Service against the Company or Executive which said
Certified Public Accountants believe has a high probability of success,
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Executive which Executive shall repay
to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code; provided, however, that
no amount shall be payable by Executive to the Company in and to the extent
such payment would not reduce the amount which is subject to taxation under
Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an
Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive together with interest
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
14. SEVERANCE COMPENSATION AND BENEFITS NOT IN DEROGATION OF OTHER
BENEFITS. Anything to the contrary herein contained notwithstanding, the
payment or obligation to pay any monies, or granting of any benefits,
rights or privileges to Executive as provided in this Agreement shall not
be in lieu or derogation of the rights and privileges that the Executive
now has or will have under any plans or programs of the Company, except
that the Executive shall not be entitled to the benefits of any other plan
or program of the Company expressly providing for severance or termination
pay if the Executive is terminated without Cause or resigns for Good Reason
after a Change in Control.
15. MISCELLANEOUS. This Agreement is the joint and several
obligation of the Bank and GSB. The terms of this Agreement shall be
governed by, and interpreted and construed in accordance with the
provisions of, the laws of New Jersey and, to the extent applicable,
federal law. This Agreement supersedes all prior agreements and
understandings with respect to the matters covered hereby. The amendment
or termination of this Agreement may be made only in a writing executed by
the Company and the Executive, and no amendment or termination of this
Agreement shall be effective unless and until made in such a writing. This
Agreement shall be binding upon any successor (whether direct or indirect,
by purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal
to the Executive and the Executive may not assign any of his rights or
duties hereunder but this Agreement shall be enforceable by the Executive's
legal representatives, executors or administrators. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement
to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, GSB and the Bank each have caused this
Agreement to be signed by their duly authorized representatives pursuant to
the authority of their Boards of Directors, and the Executive has
personally executed this Agreement, all as of the day and year first
written above.
ATTEST: GARDEN STATE BANCSHARES, INC.
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
ATTEST: GARDEN STATE BANK
/s/ LISA MacQUAIDE By: /s/ PETER BOYARIN
- ---------------------------- ------------------------------
Lisa MacQuaide, Secretary Peter Boyarin, Chairman
WITNESS:
/s/ LISA A. HALPIN /s/ ROBERT ENGLISH
- ---------------------------- ------------------------------
ROBERT ENGLISH, Executive
