<TABLE>
INTERCHANGE FINANCIAL SERVICES CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
June 30, December 31,
1995 1994
------- ----------
<S> <C> <C>
Assets
Cash and due from banks $ 22,367 $ 22,865
Federal funds sold 13,900 3,100
------ ------
Total cash and cash equivalents 36,267 25,965
------ ------
Investment securities at amortized cost (approximate
market value of $116,542 and $116,718) 115,789 121,512
Securities available for sale at estimated market value
(amortized cost of $31,506 and $30,079) 30,637 27,269
Loans 287,982 290,654
Less: Allowance for loan losses 3,849 3,839
------- -------
Net loans 284,133 286,815
------- -------
Premises and equipment, net 5,246 4,606
Foreclosed real estate 949 880
Accrued interest receivable and other assets 10,422 12,265
------- ------
Total assets $483,443 $479,312
======== =======
Liabilities
Deposits
Non-interest bearing $ 73,558 $ 66,435
Interest bearing 358,484 357,735
------- -------
Total deposits 432,042 424,170
Short-term borrowings 7,100 11,702
Accrued interest payable and other liabilities 3,477 3,311
Long-term borrowings 2,500 5,000
------ ------
Total liabilities 445,119 444,183
------- -------
Stockholders' equity
Preferred stock 5,000 5,000
Common stock 4,495 4,495
Capital surplus 11,333 11,333
Retained earnings 20,679 18,737
Unrealized losses on securities available for sale,
net of income taxes (560) (1,813)
------- -------
40,947 37,752
Less: Treasury stock 2,623 2,623
------ ------
Total stockholders' equity 38,324 35,129
------ ------
Total liabilities and stockholders' equity $483,443 $479,312
======= =======
</TABLE>
<PAGE>
<TABLE>
INTERCHANGE FINANCIAL SERVICES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
1995 1994 1995 1994
----- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $6,802 $5,357 $13,490 $10,771
Interest on federal funds sold 117 202 189 296
Interest and dividends on securities
Taxable interest income 2,267 2,162 4,556 4,095
Interest income exempt from federal income taxes 14 19 29 33
Dividends 50 32 80 73
----- ----- ------ ------
Total interest income 9,250 7,772 18,344 15,268
Interest expense
Interest on deposits 3,666 2,545 7,083 4,934
Interest on short-term borrowings 117 5 262 8
Interest on long-term borrowings 44 - 107 -
----- ----- ----- -----
Total interest expense 3,827 2,550 7,452 4,942
----- ----- ------ ------
Net interest income 5,423 5,222 10,892 10,326
Provision for loan losses 375 225 600 450
----- ----- ------ ------
Net interest income after provision
for loan losses 5,048 4,997 10,292 9,876
----- ----- ------ ------
Non-interest income
Service fees on deposit accounts 374 390 735 724
Net gain on sale of loans available for sale 11 15 22 15
Net gain on sale of securities available for sale 15 - 15 -
Accretion of discount in connection with acquisition 190 190 380 380
Other 523 549 977 806
----- ----- ----- ------
Total non-interest income 1,113 1,144 2,129 1,925
----- ----- ----- ------
Non-interest expenses
Salaries and benefits 1,832 1,728 3,670 3,437
Net occupancy 515 483 1,025 996
Furniture and equipment 178 160 329 332
Advertising and promotion 189 167 379 345
Federal Deposit Insurance Corporation assessment 240 213 465 424
Foreclosed real estate expense 38 93 110 217
Other 849 1,112 1,962 2,059
----- ----- ----- -----
Total non-interest expenses 3,841 3,956 7,940 7,810
----- ----- ----- -----
Income before income taxes 2,320 2,185 4,481 3,991
Income taxes 755 776 1,511 1,411
----- ----- ----- -----
Net income $1,565 $1,409 $2,970 $2,580
====== ====== ====== ======
Per common share $0.57 $0.51 $1.08 $0.94
====== ====== ====== ======
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
INTERCHANGE FINANCIAL SERVICES CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)
<CAPTION>
Unrealized
Losses on
Securities
Preferred Common Capital Retained Available Treasury
Stock Stock Surplus Earnings for Sale Stock Total
--------- ------ ------- -------- ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1994 $5,000 $4,495 $11,333 $15,100 $ 9 $(2,623) $33,314
Net income 2,580 2,580
Dividends on common stock
at $0.35 per share (944) (944)
Dividends on preferred stock (56) (56)
Decrease in market valuation-
securities available for sale (1,534) (1,534)
------ ----- ------ ------ ------ ------ ------
Balance atJune 30, 1994 5,000 4,495 11,333 16,680 (1,525) (2,623) 33,360
Net income 3,056 3,056
Dividends on common stock
at $0.35 per share (943) (943)
Dividends on preferred stock (56) (56)
Decrease in market valuation-
securities available for sale (288) (288)
------ ----- ------ ------ ----- ------ ------
Balance at December 31, 1994 5,000 4,495 11,333 18,737 (1,813) (2,623) 35,129
Net income 2,970 2,970
Dividends on common stock
at $0.36 per share (971) (971)
Dividends on preferred stock (57) (57)
Increase in market valuation-
securities available for sale 1,253 1,253
------ ----- ------ ------ ----- ------ -------
Balance at June 30 , 1995 $5,000 $4,495 $11,333 $20,679 $ (560) $(2,623) $38,324
====== ===== ====== ======= ====== ====== =======
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
INTERCHANGE FINANCIAL SERVICES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<CAPTION>
For the six months ended
June 30,
------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income $2,970 $2,580
Non-cash items included in earnings
Depreciation and amortization of fixed assets 395 429
Amortization of securities premiums 748 782
Accretion of securities discounts (27) (4)
Amortization of premiums in connection with acquisition 222 181
Accretion of discount in connection with acquisition (380) (380)
Provision for loan losses 600 450
Reduction in carrying value of foreclosed real estate - 100
Net gain on sale of securities available for sale (15) -
Net gain on sale of loans available for sale (22) (15)
Net gain on sale of foreclosed real estate (13) (135)
Increase in carrying value of loans available for sale (81) -
Loss on sale of fixed assets 25 -
(Increase) decrease in operating assets
Net origination of loans available for sale (193) (13,842)
Proceeds from sale of loans available for sale 837 901
Premium in connection with acquisition - (1,724)
Accrued interest receivable 209 (413)
Other 761 (4)
Increase in operating liabilities
Accrued interest payable 141 6
Other 25 116
----- ------
Cash provided by (used for) operating activities 6,202 (10,972)
----- ------
Cash flows from investing activities
Proceeds from (payments for)
Net repayments of loans 2,076 3,410
Purchase of loans (502) (31,173)
Sale of loans - 309
Purchase of securities available for sale (4,915) (1,031)
Maturities of securities available for sale 1,146 374
Sale of securities available for sale 2,359 116
Sale of foreclosed real estate 309 543
Purchase of investment securities - (10,585)
Maturities of investment securities 5,000 9,000
Advances on foreclosed real estate (18) (106)
Purchase of fixed assets (1,100) (291)
Sale of fixed assets 3 -
----- ------
Cash provided by (used for) investing activities 4,358 (29,434)
----- ------
Cash flows from financing activities
Proceeds from (payments for)
Deposits in excess of withdrawals 7,872 4,561
Retirement of other borrowings (7,102) (307)
Acquisition of deposit accounts - 26,468
Dividends (1,028) (1,000)
Short-term borrowings - 6,900
----- ------
Cash (used for) provided by financing activities (258) 36,622
----- ------
Increase (decrease) in cash and cash equivalents 10,302 (3,784)
Cash and cash equivalents, beginning of year 25,965 26,568
------ ------
Cash and cash equivalents, end of period $36,267 $22,784
====== ======
Supplemental disclosure of cash flow information: Cash paid for:
Interest $7,311 $4,936
Income taxes 1,443 1,589
Supplemental disclosure of non-cash investing activities:
Loans transferred to foreclosed real estate 347 233
Securitization of loans reclassified to securities
available for sale - 27,417
(Increase) decrease-market valuation of securities
available for sale $ (1,941) $ 1,525
See notes to consolidated financial statements
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
1. Financial Statements
--------------------
The consolidated financial statements should be read in conjunction with
the financial statements and schedules as presented in the Annual Report on Form
10-K of Interchange Financial Services Corporation (the "Company") for the year
ended December 31, 1994.
Consolidated financial data for the six months ended June 30, 1995 and 1994
are unaudited but reflect all adjustments consisting of only normal recurring
adjustments which are, in the opinion of management, considered necessary for a
fair presentation of the financial condition and results of operations for the
interim periods. Results for interim periods are not necessarily indicative of
results to be expected for any other period or the full year.
2. Legal Proceedings
-----------------
Interchange State Bank (the "Bank"), a wholly owned subsidiary of the
Company, was a defendant in a lawsuit commenced in April 1989, (Great American
Mortgage Corp., et al vs. Robert Utter, et al.) filed in Superior Court of New
Jersey alleging that the Bank was statutorily liable in conversion for having
paid checks drawn on demand deposit accounts of plaintiffs at the Bank bearing
forged or irregular endorsements.
On December 2, 1992, the Court directed judgment to be entered against the
Bank in the total principal sum of $484 thousand with prejudgment interest. On
April 5, 1993, the Bank filed a Notice of Appeal of this judgment and, by virtue
of post-judgment motions, the amount was reduced to the principal sum of $311
thousand plus pre-judgment interest. This judgment was appealed and, by virtue
of this appeal, the amount was further reduced to $245 thousand. The matter
remained on appeal until May 8, 1995 at which time, by Court order, the matter
was settled. Pursuant thereto, the Bank has paid a total of $89 thousand against
the aforesaid judgment, which has now been discharged of record. The Bank
continues to pursue various parties for recoupment of the aforesaid monies under
which it is likely that the Bank's liability for the payment will either be
reduced to its proportionate share under contribution theories or it will be
exonerated under indemnification theories.
In a related matter, on January 8, 1993, an interlocutory judgment was
entered against the Bank in the principal sum of $120 thousand with prejudgment
interest. The Bank has appealed this judgment and a stay of execution has been
effected.
In 1992, the Company accrued $500 thousand as a provision for an adverse
judgment in this litigation. Based on the May 8, 1995 partial settlement of
these matters, the Company has reduced the reserve by $250 thousand to $161
thousand which the Company and its legal counsel believe is adequate to cover
any remaining liabilities related to these matters.
The Company is also a party to routine litigation involving various aspects
of its business, none of which, in the opinion of management, after consultation
with legal counsel, is expected to have a material, adverse impact on the
consolidated financial condition, results of operations or liquidity of the
Company.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is an analysis of the consolidated financial
condition and results of operations of the Company for the six months ended June
30, 1995 and 1994 and should be read in conjunction with the consolidated
financial statements and notes thereto included in Item 1 hereof.
Results of Operations
---------------------
Earnings Summary
----------------
Net income in the first six months of 1995 improved $390 thousand or 15.1%
over the comparable 1994 period. The increase was primarily attributable to the
increase in net interest income of $566 thousand for the six-month period ended
June 30, 1995 over the same period a year ago. The improvement in net interest
income resulted from a 7.6% increase in average earning assets for the six-month
period ended June 30, 1995 over the same period a year ago. For the same
periods, net yield on average earning assets decreased ten basis points. In
addition, earnings were favorably impacted by the settlement of a 1992 lawsuit
against the banking subsidiary (see legal proceedings in notes to consolidated
financial statements). The settlement resulted in a $250 thousand reduction of a
previously established reserve, adding $162 thousand to net income. Furthermore,
earnings were positively affected by an increase of $187 thousand in the
recognition of discounts related to purchased loans.
Earnings for the period were adversely affected by an increase in the
provision for loan losses of $150 thousand (see provision for loan losses and
loan loss experience). Furthermore, earnings were negatively impacted by an
increase in non-interest expenses of $130 thousand. Salaries and benefits
increased $233 thousand and made up the largest portion of the increase. The
increase resulted from annual salary increases and new employees. Increases in
other non-interest expenses were offset by a reduction of $250 thousand to the
litigation reserve discussed above.
The Company's most important revenue source is net interest income which is
the difference between interest earned on its interest earning assets, such as
loans and investments, and the interest paid on its interest bearing
liabilities, primarily deposits. Changes in net interest income from period to
period result from increases or decreases in the average balances of interest
earning assets and interest bearing liabilities and increases or decreases in
the spread between the average rates earned on such assets and the average rates
paid on such liabilities.
For the six months ended June 30, 1995 net interest income on a tax
equivalent basis, was $10.9 million, an increase of 5.5% over net interest
income of $10.3 million in the same period in 1994. The principal factor in this
improvement was an increase of approximately 7.6% in average interest earning
assets resulting from loan acquisitions of $25.7 million in June 1994 and $6.9
million in October 1994. An increase in interest expense partially offset the
positive effects derived from interest earning assets. Interest expense
increased due to an increase of 7.2% in average interest bearing liabilities.
The increase occurred mostly in certificates of deposit and borrowings which
typically bear the highest interest rate. The borrowings were used primarily to
fund the loan acquisitions.
<PAGE>
Nonperforming Assets
--------------------
Nonperforming assets, consisting of nonaccrual loans, restructured loans
and foreclosed real estate, increased $646 thousand from $5.4 million at June
30, 1994 to $6.1 million at June 30, 1995. In the second quarter of 1995
nonperforming assets decreased $698 thousand from $6.8 million at March 31,
1995. The ratio of nonperforming assets to total loans and foreclosed real
estate increased from 1.9% at June 30, 1994 to 2.1% at June 30, 1995. The ratio
at June 30, 1995 decreased as compared to 2.6% at December 31, 1994.
Provision for Loan Losses and Loan Loss Experience
--------------------------------------------------
The provision for loan losses represents management's determination of the
amount necessary to bring the allowance for loan losses to a level that
management considers adequate to reflect the risk of future losses inherent in
the Company's loan portfolio. In its evaluation of the adequacy of the allowance
for loan losses, management considers past loan loss experience, changes in the
composition of nonperforming loans, the condition of borrowers facing financial
pressure, the relationship of the current level of the allowance to the loan
portfolio and to nonperforming loans and existing economic conditions. However,
the process of determining the adequacy of the allowance is necessarily
judgmental and subject to changes in external conditions. Accordingly, there can
be no assurance that existing levels of the allowance will ultimately prove
adequate to cover actual loan losses.
The provision for loan losses was increased $150 thousand during the
quarter ended June 30, 1995 to bring the allowance for loan losses to a level
that is commensurate with the increase in loan activity. As of June 30, 1995
gross loans were $288 million as compared to $280 million at the same date in
1994.
The allowance for loan losses was $3.8 million at June 30, 1995 and
December 31, 1994 representing 63.4% and 50.7% of nonperforming assets at
those dates, respectively.
<PAGE>
<TABLE>
Securities
Investment securities and securities available for sale consist of the following: (in thousands)
<CAPTION>
June 30, 1995
------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
Investment securities
Obligations of U.S. Treasury $ 115,789 $ 1,560 $ 807 $ 116,542
------- ---- ----- -------
Securities available for sale
Obligation of U.S. Agencies 28,041 5 895 27,151
Obligations of states and
political subdivisions 882 19 - 901
Other debt securities 148 2 - 150
Equity securities 2,435 - - 2,435
------- ----- ----- ------
31,506 26 895 30,637
------- ----- ----- ------
Total securities $ 147,295 $ 1,586 $ 1,702 $ 147,179
======= ====== ===== =======
<CAPTION>
December 31, 1994
-------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- --------- --------- ------
<S> <C> <C> <C> <C>
Investment securities
Obligations of U.S. Treasury $ 121,512 $ 47 $ 4,841 $ 116,718
------- ---- ----- -------
Securities available for sale
Obligations of U.S. agencies 26,855 - 2,823 24,032
Obligations of states and
political subdivisions 1,442 12 2 1,452
Other debt securities 147 3 - 150
Equity securities 1,635 - - 1,635
------- ----- ------ ------
30,079 15 2,825 27,269
------- ----- ------ ------
Total securities $ 151,591 $ 62 $ 7,666 $ 143,987
======= ===== ====== =======
</TABLE>
<PAGE>
<TABLE>
At June 30, 1995, the contractual maturities of investment securities and securities available
for sale are as follows: (in thousands)
<CAPTION>
Securities
Investment Securities Available for Sale
-------------------------- ---------------------------
Amortized Market Amortized Market
Cost Value Cost Value
-------- -------- ------- ------
<S> <C> <C> <C> <C>
Within 1 year $ 17,155 $ 17,183 $ 612 $ 617
After 1 but within 5 years 81,676 81,827 4,191 4,202
After 5 but within 10 years 16,958 17,532 123 125
After 10 years - - 24,145 23,258
Equity securities - - 2,435 2,435
-------- -------- ------- -------
Total $115,789 $116,542 $31,506 $30,637
======== ======== ======= =======
</TABLE>
<PAGE>
<TABLE>
Capital Adequacy
The table below presents the Company's capital position as of June 30, 1995: (dollars in thousands)
<S> <C>
Stockholders' equity $ 38,324
Intangible assets (2,199)
Unrealized loss-securities available for sale 560
------
Tier 1 capital 36,685
Allowable portion of allowance
for loan losses 3,517
-------
Total risk-based capital $40,202
=======
Risk weighted assets $281,339
========
<CAPTION>
Minimum
Actual Requirement
------ -----------
<S> <C> <C>
Risk-based ratio
Tier 1 13.04% 4.00%
Total 14.29 8.00
Leverage capital ratio 7.75 3.00
</TABLE>
<PAGE>
Liquidity
---------
Liquidity is the ability to provide promptly and economically the cash
necessary to meet customer credit needs and satisfy deposit withdrawal
requirements. Cash and cash equivalents totaled $36.3 million at June 30, 1995
up from $26.0 million at December 31, 1994. As of June 30, 1995 securities
maturing within one year amounted to $17.8 million, up from $15.3 million at
December 31, 1994.
Another source of liquidity is borrowing capability. The Bank has a variety
of sources of short-term liquidity available, including federal funds purchased
from correspondent banks, the Federal Reserve discount window, credit services
through its membership in the Federal Home Loan Bank, sales of securities under
repurchase agreements as well as loan participation or sales of loans and sales
of securities available for sale. The Company also generates liquidity from the
regular principal payments made on its portfolio of loans.
The Company believes that these sources of liquidity are adequate to meet
its needs.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
--------------------------
Interchange State Bank (the "Bank"), a wholly owned subsidiary of the
Company, was a defendant in a lawsuit commenced in April 1989, (Great American
Mortgage Corp., et al vs. Robert Utter, et al.) filed in Superior Court of New
Jersey alleging that the Bank was statutorily liable in conversion for having
paid checks drawn on demand deposit accounts of plaintiffs at the Bank bearing
forged or irregular endorsements.
On December 2, 1992, the Court directed judgment to be entered against the
Bank in the total principal sum of $484 thousand with prejudgment interest. On
April 5, 1993, the Bank filed a Notice of Appeal of this judgment and, by virtue
of post-judgment motions, the amount was reduced to the principal sum of $311
thousand plus pre-judgment interest. This judgment was appealed and, by virtue
of this appeal, the amount was further reduced to $245 thousand. The matter
remained on appeal until May 8, 1995 at which time, by Court order, the matter
was settled. Pursuant thereto, the Bank has paid a total of $89 thousand against
the aforesaid judgment, which has now been discharged of record. The Bank
continues to pursue various parties for recoupment of the aforesaid monies under
which it is likely that the Bank's liability for the payment will either be
reduced to its proportionate share under contribution theories or it will be
exonerated under indemnification theories.
In a related matter, on January 8, 1993, an interlocutory judgment was
entered against the Bank in the principal sum of $120 thousand with prejudgment
interest. The Bank has appealed this judgment and a stay of execution has been
effected.
In 1992, the Company accrued $500 thousand as a provision for an adverse
judgment in this litigation. Based on the May 8, 1995 partial settlement of
these matters, the Company has reduced the reserve by $250 thousand to $161
thousand which the Company and its legal counsel believe is adequate to cover
any remaining liabilities related to these matters.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
On May 25, 1995 at the annual meeting, the following matters were submitted
to a vote of security holders:
(a) Election of directors. Anthony D. Andora, J. Fletcher Creamer, Jr., David
R. Ficca and Benjamin Rosenzweig were re-elected, by the common
shareholders, as directors of Interchange Financial Services Corporation.
The votes were as follows:
For Against Abstain
--------- ------- -------
Anthony D. Andora 2,393,293 1,244 -
J. Fletcher Creamer, Jr. 2,391,958 2,579 -
David R. Ficca 2,393,597 940 -
Benjamin Rosenzweig 2,392,428 2,109 -
(b) Approval of an amendment to the stock option plan of 1989 to increase from
80,000 to 270,000 the number of shares available to be issued pursuant to
the plan. The votes were as follows:
For Against Abstain
--------- ------- -------
Amendment to stock option
plan of 1989 1,631,740 272,837 43,175
(c) Ratification of appointment of Deloitte & Touche LLP as independent
auditors. The votes were as follows:
For Against Abstain
--------- ------- -------
Ratification of appointment
of independent auditors 2,384,061 2,175 8,301
The total number of shares of Interchange Financial Services Corporation
common stock outstanding as of April 20, 1995 the record date for the annual
meeting, was 2,697,100.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) The following exhibits are furnished herewith:
Exhibit No.
----------
10 Material contracts
(a) Agreement for legal services between Andora, Palmisano &
Geaney and the Company dated April 27, 1995.
(b) Change in Control Agreement dated May 22, 1995 for Anthony
S. Abbate
(c) Change in Control Agreement dated May 22, 1995 for Robert N.
Harris
(d) Change in Control Agreement dated May 22, 1995 for Richard
Latrenta
(e) Change in Control Agreement dated May 22, 1995 for Frank
Giancola
11 Statement Re: Computation of Per Share Earnings
(b) No reports on Form 8-K have been filed during the quarter ended June
30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. Interchange Financial Services
Corporation
by: /s/Robert N. Harris
-------------------
Robert N. Harris
Executive Vice President
AGREEMENT FOR LEGAL SERVICES
THIS AGREEMENT for legal services made this 27th day of April, 1995, by
and between:
ANDORA, PALMISANO & GEANEY
A Professional Corporation
303 Molnar Drive, P.O. Box 431
Elmwood Park, New Jersey 07407-0431
hereinafter referred to as "Attorneys",
and
INTERCHANGE FINANCIAL SERVICES CORPORATION
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07662
and
INTERCHANGE STATE BANK
A Banking Corporation
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07662
hereinafter referred to as "Clients".
IN CONSIDERATION of the mutual promises, covenants and undertakings
contained herein the Attorneys and the Clients agree as follows:
1. RETAINER
Clients hereby retain the services of Attorneys to act as its corporate
counsel for the term and compensation as outlined herein.
2. TERM
The Attorneys shall be retained by Clients until the next annual
reorganization meeting of Clients.
3. COMPENSATION
The Clients shall pay the Attorneys for services rendered as corporate
counsel an annual retainer of NINETY-FIVE THOUSAND DOLLARS ($95,000.00) payable
in equal monthly installments on the first day of each and every month
commencing the first day of the month following the execution of this Agreement.
Clients shall, in addition to the annual retainer, pay to the Attorneys all
out-of-pocket expenses, filing fees, or disbursements made by the Attorneys on
Clients' behalf. Clients shall, in addition to the payment of the annual
retainer and all costs, pay to the Attorneys a legal fee based on the rate per
hour as shown on Schedule A for all legal services provided to Clients by the
Attorney which are "legal services rendered in addition to those rendered as
corporate counsel." Such fees and costs shall be billed by Attorneys to clients
on a thirty-day basis and Clients shall pay all bills within five (5) days after
each monthly Board of Director's meeting of the Clients.
4. DEFINITIONS
The following words and phrases shall have the following meanings:
A. "Legal services rendered as corporate counsel" shall mean and include
all of the following types of legal work:
1. Except as hereinafter set forth in subparagraph B, document
review and drafting of documents on behalf of the Clients
including, but not limited to: leases, notes, contracts,
mortgages, commitment letters, disclosure statements,
modifications, extensions and legal agreements not related to
third-party borrowers, except residential mortgage reviews.
2. Providing legal advice required in the usual course of
Clients' business including compliance analysis.
3. Attendance at Board of Director's and Shareholders' Meetings
other than as a Director.
4. Advice regarding levies and executions
5. Preparation of annual SEC 10K, 10Q and "ordinary" proxy
filings.
B. "Legal services rendered in addition to those rendered as general
corporate counsel" shall mean and include, but not be limited to, all
of the following types of legal work which shall be billed on an
hourly basis:
1. Litigation in which Clients are named as defendants.
2. Litigation or other proceedings in which Clients and another
person or agency (i.e., Small Business Administration)
specially retain Attorney. The hourly rate for such legal
services shall be specifically agreed upon by Clients, the
agency, and Attorneys.
3. Foreclosure litigation, including lien protection litigation
in any Court including the Bankruptcy Court.
4. Regulatory or administrative law proceedings including but
not limited to Department of Banking, zoning agencies,
N.L.R.B., F.D.I.C., and Tax Court.
5. Loan reviews and closings, including modifications and
extensions thereof, except that the fee shall be based upon
$250.00 per hour plus costs and such fee shall not exceed
1/2% of the principal amount of the loan plus costs but in
no event shall such fee be less than $250.00.
6. Closings in which the bank is a buyer or seller.
7. SEC Filings other than annual 10K, 10Q or "ordinary" proxy
filings.
8. Mergers and Acquisitions.
9. All other legal services not specifically set forth in
Paragraph 4A.
5. BINDING EFFECT
This agreement shall be binding upon and shall inure to the benefit of
the parties' successors or assigns.
6. NO ASSIGNMENT
This agreement shall not be assigned or sublet without the express
written consent of the parties.
7. LAW APPLICABLE
This agreement shall be governed by the laws of the State of New
Jersey.
8. SEVERABILITY
In the event any clause, section or paragraph of this agreement shall be
declared invalid or unenforceable by a court of competent jurisdiction, such
invalid or unenforceability shall not affect the remainder of this Agreement.
IN WITNESS WHEREOF the parties have hereunto signed this agreement the date
first above written.
INTERCHANGE STATE BANK
ATTEST:
/s/Benjamin Rosenzweig /s/ Anthony S. Abbate
Benjamin Rosenzweig, Secretary Anthony S. Abbate, President
INTERCHANGE FINANCIAL SERVICES CORPORATION
ATTEST:
/s/Benjamin Rosenzweig /s/ Anthony S. Abbate
Benjamin Rosenzweig, Secretary Anthony S. Abbate, President
ANDORA, PALMISANO & GEANEY
ATTEST:
s/sJohn P. Palmisano, s/sAnthony D. Andora
John P. Palmisano, Secretary Anthony D. Andora, President
<PAGE>
SCHEDULE A
The hourly rates contained herein are subject to change on the anniversary
dates of the Agreement of Legal Services.
Schedule A, reviewed and approved at Annual Reorganization Meeting on April
27, 1995.
Andora D. Andora $250.00 per hour
John P. Palmisano $250.00 per hour
John F. Geaney $250.00 per hour
Other Partners and
Senior Associates $175.00 per hour
Other Associates $150.00 per hour
<PAGE>
May 22, 1995
Mr. Anthony S. Abbate
6 Robin Hood Court
Montvale, NJ 07645
Dear Mr. Abbate:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not
voluntarily leave the employ of the Company except as may be permitted
hereunder, and will continue to perform your regular duties as President
and Chief Executive Officer of the Company. Notwithstanding the foregoing,
the Company may terminate your employment at any time, subject to providing
the benefits hereinafter specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of three consecutive years,
individuals who at the beginning of such period constitute the Board cease
for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of
each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within three (3) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph
(i) or (ii) above or by you pursuant to subparagraph (B) of
paragraph (i) or paragraph (iii) above shall be communicated by
written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean
a notice which shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is
terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned
to the performance of your duties on a full-time basis during
such thirty (30) day period), (B) if your employment is
terminated pursuant to paragraph (ii) above, the date specified
in the Notice of Termination, and (C) if your employment is
terminated for any other reason, the date on which a Notice of
Termination is given; provided that if within thirty (30) days
after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding and final
arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction entered upon such arbitration
award (the time of appeal therefrom having expired and no appeal
having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) The Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given plus credit for any vacation earned but not taken and the
amount, if any, of any bonus for a past fiscal year and the portion of
the current fiscal year ending on the Date of Termination which has
not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to three (3) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses incurred
by you as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit
provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) three (3) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment three (3)
additional years of Credited Service and deemed 3 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment provided
for in this Section 4 by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer
after the Date of Termination or otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /S/Anthony D. Andora
------------------------
Name: Anthony D. Andora
Title:Chairman of the Board
Agreed to this 26th day of May, 1995.
/s/Anthony S. Abbate
----------------------------------
Anthony S. Abbate, President & CEO
Attest by: /s/Benjamin Rosenzweig
----------------------
Benjamin Rosenzweig, Secretary
<PAGE>
May 22, 1995
Mr. Robert N. Harris
7 Brockden Drive
Mendham, NJ 07945
Dear Mr. Harris:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not voluntarily
leave the employ of the Company except as may be permitted hereunder, and
will continue to perform your regular duties as Executive Vice President of
the Company. Notwithstanding the foregoing, the Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within two (2) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to subparagraph (B) of paragraph (i) or
paragraph (iii) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (B)
if your employment is terminated pursuant to paragraph (ii) above, the
date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within thirty (30)
days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or
by a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time of appeal
therefrom having expired and no appeal having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below: (i) The Company shall pay you your full base
salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given plus credit for any vacation earned but not
taken and the amount, if any, of any bonus for a past fiscal year and the
portion of the current fiscal year ending on the Date of Termination which
has not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to two (2) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) two (2) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment two (2)
additional years of Credited Service and deemed 2 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination or
otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /s/Anthony D. Andora
---------------------
Name: Anthony D. Andora
Title: Chairman of the Board
Agreed to this 8 day of June, 1995.
/s/Robert N. Harris
-------------------
Robert N. Harris
Executive Vice President
Chief Financial Officer
Attest by: /s/Benjamin Rosenzweig
----------------------
Benjamin Rosenzweig, Secretary
<PAGE>
May 22, 1995
Mr. Frank R. Giancola
18 Franciscan Way
Fair Lawn, NJ 07410
Dear Mr. Giancola:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not voluntarily
leave the employ of the Company except as may be permitted hereunder, and
will continue to perform your regular duties as Senior Vice President of
the Company. Notwithstanding the foregoing, the Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within two (2) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to subparagraph (B) of paragraph (i) or
paragraph (iii) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (B)
if your employment is terminated pursuant to paragraph (ii) above, the
date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within thirty (30)
days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or
by a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time of appeal
therefrom having expired and no appeal having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) The Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given plus credit for any vacation earned but not taken and the
amount, if any, of any bonus for a past fiscal year and the portion of
the current fiscal year ending on the Date of Termination which has
not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to two (2) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) two (2) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment two (2)
additional years of Credited Service and deemed 2 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination or
otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /s/Anthony D. Andora
--------------------
Name:Anthony D. Andora
Title:Chairman of the Board
Agreed to this 2 day of June, 1995.
/s/Frank R. Giancola
----------------------------------
Frank R. Giancola, Sr. Vice President
Attest by: /s/Benjamin Rosenzweig
----------------------
Benjamin Rosenzweig, Secretary
<PAGE>
May 22, 1995
Mr. Richard N. Latrenta
405 Tenafly Road
Englewood, NJ 07631
Dear Mr. Latrenta:
Interchange Financial Services Corporation, a New Jersey Bank Holding Company
(the "Company"), considers the maintenance of a sound and vital executive team
to be essential to protecting and enhancing the best interests of the Company
and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of executives to
the detriment of the Company and its stockholders. Accordingly, the Board of
Directors of the Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's executive team.
This letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Company's Right to Terminate
During the term of this Agreement, you agree that you will not voluntarily
leave the employ of the Company except as may be permitted hereunder, and
will continue to perform your regular duties as Senior Vice President of
the Company. Notwithstanding the foregoing, the Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof.
2. Change in Control
No benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below, and your employment
by the Company shall thereafter have been terminated in accordance with
Section 3 below. For purposes of this Agreement, a "change in control of
the Company" shall mean, unless the Board otherwise directs resolution
approved by unanimous vote of the entire membership thereof adopted prior
thereto, a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
25% control of the combined voting power of the Company's then outstanding
securities; or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
3. Termination Following Change in Control
If any of the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon your subsequent termination, so
long as such termination occurs within two (2) years after a change in
control of the Company, unless such termination is (A) because of your
death or Retirement, (B) by the Company for Cause or Disability or (c) by
you other than for Good Reason.
(i) Disability; Retirement
(A) Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from
your duties with the Company on a full-time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after
Notice of Termination (as hereinafter defined) is given following
such absence, you shall have returned to the full time
performance of your duties; or
(B) Termination by the Company or you of your employment based on
"Retirement" shall mean your voluntary termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.
(ii) Cause
Termination by the Company of your employment for Cause shall mean
your termination on account of:
(A) Your willful commission of an act that causes or is reasonably
likely to cause substantial damage to the Company;
(B) Your commission of an act of fraud in the performance of your
duties on behalf of the Company;
(C) Your conviction for commission of a felony or other crime
punishable by confinement for a period in excess of one (1) year
in connection with the performance of your duties on behalf of
the Company; or
(D) The order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the termination of your
employment.
(iii) Good Reason
Termination by you of your employment for "Good Reason" shall mean
termination based on:
(A) Subsequent to a change in control of the Company, and without
your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control,
or a change in your reporting responsibilities, titles or offices
as in effect immediately prior to a change in control, or any
removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of
your death or by you other than for Good Reason;
(B) Subsequent to a change in control of the Company, a reduction by
the Company in your base salary as in effect on the date hereof
or as the same may be increased from time to time;
(C) Subsequent to a change in control of the Company, a failure by
the Company to continue any bonus plans in which you are
presently entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in the forms
currently in effect, or a failure by the Company to continue you
as a participant in the Bonus Plans on at least the same basis as
you presently participate in accordance with the Bonus Plans;
(D) Subsequent to a change in control of the Company and without your
express written consent, the Company's requiring you to be based
anywhere other than within thirty (30) miles of your present
office location, except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations;
(E) Subsequent to change in control of the Company, the failure by
the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option
plan, life insurance plan, health-and-accident plan or disability
plan in which you are participating at the time of a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which
would adversely affect your participation in or materially reduce
your benefits under any of such plans or deprive you of any
material fringe benefit enjoyed by you at the time of the change
in control, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the company's normal vacation policy in effect on
the date hereof;
(F) Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the agreement to perform
this Agreement by any successor as contemplated in Section 6
hereof; or
(G) Subsequent to a change in control of the Company, any purported
termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall
be effective.
(iv) Notice of Termination
Any purported termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to subparagraph (B) of paragraph (i) or
paragraph (iii) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) Date of Termination
"Date of Termination" shall mean (A) if your employment is terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (B)
if your employment is terminated pursuant to paragraph (ii) above, the
date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within thirty (30)
days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or
by a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time of appeal
therefrom having expired and no appeal having been perfected).
4. Certain Benefits Upon Termination
If, after a change in control of the Company shall have occurred, as
defined in Section 2 above, your employment by the Company shall be
terminated (A) by the Company other than for Cause, Disability or
Retirement or (B) by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) The Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given plus credit for any vacation earned but not taken and the
amount, if any, of any bonus for a past fiscal year and the portion of
the current fiscal year ending on the Date of Termination which has
not yet been awarded or paid to you under the Bonus Plans;
(ii) In lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to
you on the fifth day following the Date of Termination a lump sum
amount equal to two (2) times your annual base salary at the highest
rate in effect during the twelve (12) months immediately preceding the
Date of Termination;
(iii)The Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement);
(iv) The Company shall maintain in full force and effect, for your
continued benefit until the earlier of (A) two (2) years after the
Date of Termination or (B) your commencement of full time employment
with a new employer, all life insurance, medical, health and accident,
and disability plans, programs or arrangements in which you were
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event
that your participation in any such plan or program is barred, the
Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans
and programs. In addition, the Company shall pay you a lump sum amount
of equivalent actuarial value to the additional pension benefit you
would have earned under the Company's Pension Plan as in effect on the
date the change of control occurs, but disregarding any Internal
Revenue Code limitations pertaining to qualified plans, if you were
granted at the time of your termination of employment two (2)
additional years of Credited Service and deemed 2 years older under
the Plan. In determining the equivalent actuarial value of the
additional pension granted under this Section 4, an interest rate of
5% and the mortality table under the Company's Pension Plan shall be
used to determine the lump sum amount.
You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination or
otherwise.
5. Certain Further Payments by the Corporation
In the event that any amount or benefit paid or distributed to you pursuant
to this Agreement, taken with any amounts or benefits otherwise paid or
distributed to you by the Company or any affiliated company (collectively
the "Covered Payments"), are or become subject to the tax (the "Excise
Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to you at the time specified
below an additional amount (the "Tax Reimbursement Payment") such that the
net amount retained by you with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Reimbursement Payment
provided for by this Section 5, but before deduction for any Federal, state
or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(i) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
(A) Such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in the
opinion of the Company's independent certified public accountants
appointed prior to the date the Change of Control occurs or tax
counsel selected by such accountants (the "Accountants"), such
Covered Payments (in whole or in part) either do not constitute
parachute payments or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Code) in excess of the "base amount", or such
parachute payments are otherwise not subject to such Excise Tax,
and
(B) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(ii) For purposes of determining the amount of the Tax Reimbursement
Payment, you shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) Any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such
year.
(iii)In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, you shall repay to the Company, at the
time that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.
In the event that the Excise Tax is later determined to exceed the
amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the
time of the Tax Reimbursement Payment), the Company shall make an
additional Tax Reimbursement Payment in respect of such excess (plus
any interest or penalty payment with respect to such excess) at the
time that the amount of such excess is finally determined.
(iv) The Tax Reimbursement Payment (or portion thereof) provided for in
this Section 5 shall be paid to you not later than ten (10) business
days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall pay to you by such date an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth business day
after written demand by the Company for payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).
6. Term of Agreement
This Agreement shall continue in effect so long as you are employed by the
Company provided that, if a change of control of the Company, as defined in
Section 2 hereof, shall have occurred during the term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36)
months beyond the month in which such change in control occurred.
7. Successor; Binding Agreement
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, by agreement in form
and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in
the same amount and on the same terms as you would be entitled
hereunder if you terminated your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there be no such
designee, to your estate.
8. Notice
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the President of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
9. Miscellaneous
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement; provided, however, that this Agreement shall not supersede
or in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of New Jersey.
10. Validity
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
11. Tax Withholding
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
13. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE COMPANY
By /s/Anthony D. Andora
-------------------
Name: Anthony D. Andora
Title: Chairman of the Board
Agreed to this 8 day of June, 1995.
/s/Richard N. Latrenta
----------------------
Richard N. Latrenta, Sr. Vice President
Sr. LoanOffice
Attest by: /s/Benjamin Rosenzweig
-----------------------
Benjamin Rosenzweig, Secretary
<TABLE>
Exhibit 11
Computation of Per Share Earnings
(in thousands, except per share data)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
----------------------- -------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 1,565 $ 1,409 $2,970 $ 2,580
Preferred dividend requirements $ (28) $ (28) $ (57) $ (56)
Weighted average common shares outstanding 2,697 2,697 2,697 2,697
----- ----- ----- -----
Net income per common share $ 0.57 $ 0.51 1.08 0.94
======= ====== ==== ====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-END> Jun-30-1995
<CASH> 22,367
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 13,900
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,637
<INVESTMENTS-CARRYING> 115,789
<INVESTMENTS-MARKET> 116,542
<LOANS> 287,982
<ALLOWANCE> 3,849
<TOTAL-ASSETS> 483,443
<DEPOSITS> 432,042
<SHORT-TERM> 7,100
<LIABILITIES-OTHER> 3,477
<LONG-TERM> 2,500
<COMMON> 4,495
0
5,000
<OTHER-SE> 28,829
<TOTAL-LIABILITIES-AND-EQUITY> 483,443
<INTEREST-LOAN> 13,490
<INTEREST-INVEST> 4,665
<INTEREST-OTHER> 189
<INTEREST-TOTAL> 18,344
<INTEREST-DEPOSIT> 7,083
<INTEREST-EXPENSE> 7,452
<INTEREST-INCOME-NET> 10,892
<LOAN-LOSSES> 600
<SECURITIES-GAINS> 15
<EXPENSE-OTHER> 7,940
<INCOME-PRETAX> 4,481
<INCOME-PRE-EXTRAORDINARY> 2,970
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,970
<EPS-PRIMARY> 1.080
<EPS-DILUTED> 1.080
<YIELD-ACTUAL> 4.859
<LOANS-NON> 4,652
<LOANS-PAST> 0
<LOANS-TROUBLED> 468
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,839
<CHARGE-OFFS> 647
<RECOVERIES> 57
<ALLOWANCE-CLOSE> 3,849
<ALLOWANCE-DOMESTIC> 3,085
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 764
</TABLE>
