Exhibit 10.9
Amended as of June 28, 2005
Further amended as of June 17, 2008
AMERICAN BANK OF NEW JERSEY
DIRECTORS CONSULTATION AND RETIREMENT PLAN
AS AMENDED AND RESTATED
WHEREAS, American Bank of New Jersey, Bloomfield, New Jersey (the "Bank")
previously implemented a Directors Consultation and Retirement Plan ("Plan") to
reward the years of extensive service provided by the current members of the
Board of Directors and to continue to attract and to retain the best talent
available to serve on its Board of Directors; and
WHEREAS, the corporate structure of the Bank has changed since the initial
implementation of such Plan to include the holding company for the Bank
("American Bancorp of New Jersey, Inc." or the "Company") and the directors of
the Bank also serve as directors of the Company and receive compensation for
such services; and
WHEREAS, the Board of Directors of the Bank has determined that it is
appropriate and advisable that the compensation paid by the Company to its
directors also be considered in determining benefits under the Plan; and
WHEREAS, the Board of Directors of the Bank has determined such program may
best be accomplished by having the Bank sponsor such a retirement plan, with
benefits to be based upon annual retainers and regular Board meeting fees paid
by the Bank and the Company and with the applicable costs of such a program and
benefits thereunder to be allocated to the Company and the Bank; and
WHEREAS, the Plan must be further amended to comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW THEREFORE, BE IT RESOLVED that the Plan, as previously approved and
amended by the Bank, be approved, amended and restated by the Bank and adopted
and approved by the Company as of June 17, 2008, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall, for the purpose of
the Plan and any subsequent amendment thereof, have the following meanings
unless a different meaning is plainly required by the content:
"Beneficiary" means the surviving spouse of the Participant (if any) as of
the date of death of such Participant, and shall specifically include the
Participant's estate, should the Participant have no surviving spouse. The term
Beneficiary shall also specifically include the estate of a Participant's
spouse, if such spouse shall survive the Participant.
"Board" means the Board of Directors of the Bank or the Company, as
constituted from time to time, and successors thereto.
"Change in Control" means: (i) the execution of an agreement for the sale
of all, or a material portion, of the assets of the Company or the Bank; (ii)
the execution of an agreement for a merger or recapitalization of the Company or
the Bank or any merger or recapitalization whereby the Company or the Bank is
not the surviving entity; (iii) a change of control of the Company or the Bank,
as otherwise defined or determined by the Office of Thrift Supervision, or
regulations promulgated by it; or (iv) the acquisition, directly or indirectly,
of the beneficial ownership (within the meaning of that term as it is used in
Section 13(d) of the Securities and Exchange Act of 1934 and the rules and
regulations promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Company or the Bank by any person, trust,
entity or group. This limitation shall not apply to the purchase of shares by
underwriters in connection with a public offering of the Company or the Bank
stock, or the purchase of shares of up to 25% of any class of securities of the
Company or the Bank by a tax-qualified employee stock benefit plan. The term
"person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.
Effective January 1, 2008, no transaction or event shall be considered a Change
in Control unless such transaction or event also qualifies as a change in the
ownership or effective control, or a change in the ownership of a substantial
portion of the assets of, the Company or a related corporation, within the
meaning of Section 409A.
"Committee" means the Compensation Committee of the Bank or the
administrative committee as appointed by the Board pursuant to Section 6.11
herein.
"Company" means American Bancorp of New Jersey, Inc. and any successor
entity or any future parent corporation of the Bank.
"Director" means a member of the Board of the Bank or the Company who is
not otherwise an employee of the Bank or the Company, or any parent or
subsidiary thereof.
"Disability" means a mental or physical disability as defined under Section
409A.
"Effective Date" means August 27, 1996, with such amendments as contained
herein.
"Participant" means a Director serving on or after the Effective Date and
electing to participate in the Plan. A Director's participation in the Plan
shall continue as long as he or she fulfills all the requirements for
participation subject to the right of termination, amendment, and modification
of the Plan set forth herein. A Director who previously served as an employee of
the Bank and upon retirement as an employee was eligible to receive future
retirement benefits under a defined benefit pension plan or a supplemental
retirement plan, executive salary continuation agreement or similar deferred
compensation arrangement maintained by the Bank shall not be eligible to be a
Participant in this Plan.
"Plan" means the American Bank of New Jersey Directors Consultation and
Retirement Plan as set forth herein, and as may be amended from time to time by
the Board.
"Retirement Benefit Amount" means the benefit payable under the Plan in
accordance with Section 2.4 herein.
"Retirement Date" means the date of termination of service as a Director
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following a Participant's completion of not less than 12 years of service as a
Director, or not less than six years of service following a Change in Control;
provided, however, the Retirement Date with regard to Directors serving as of
the Effective Date who have completed not less than five years of service as of
the Effective Date shall be the date of termination of service as a Director
without regard to the 12 years of service requirement. Upon death or Disability,
a Director shall be deemed to have terminated service as of such date. A
Director may attain the Retirement Date for Service completed at one corporate
entity and not yet meet the requirements for the Retirement Date for another
corporate entity. For purposes of this Plan, effective January 1, 2005, the
phrases "termination of service" and "termination from service" shall have the
same meaning as "separation from service", as that phrase is defined in Section
409A, taking into account all rules and presumptions provided for therein. No
termination of service or termination from service shall be considered to have
occurred unless it also qualifies as a separation from service, as herein
defined.
"Bank" means American Bank of New Jersey, Bloomfield, New Jersey, or any
predecessor or successor thereto.
"Section 409A" means Section 409A of the Code and the regulations and
guidance of general applicability issued thereunder.
"Service" means all years of Service as a member of the Board and all
predecessor entities; provided, however, Service with "predecessor entities"
refers only to predecessors of the Bank prior to the Effective Date. A year of
Service shall consist of twelve consecutive months of Service. In calculating
the Retirement Benefit Amount for Service to the Company and the Bank, years of
Service may differ based upon actual Service as a member of the Board of the
Company and the Bank.
ARTICLE II
BENEFITS
2.1 Retirement. Upon a Participant's termination from service as a Director
of the Bank and the Company on or after his or her applicable Retirement Date
for such corporate entity, the Bank shall pay to the Participant the Retirement
Benefit Amount, as described and in the amount set forth at Article II, Section
2.4; provided that such payments shall not commence prior to such Director's
attainment of age 65, except in accordance with Sections 2.2, 2.3 or 2.5 herein.
Payment of such Retirement Benefit Amount shall begin on the first business day
of the month immediately following a Participant's Retirement Date or the first
business day of the month immediately following such Participant's attainment of
age 65, if later. The Retirement Benefit Amount will continue to be paid on the
first business day of each subsequent month until all scheduled payments are
made to the Participant or the Beneficiary. Except as provided at Article II,
Sections 2.2, 2.3, and 2.5 herein, upon a Participant's termination from service
as a Director prior to his or her Retirement Date, the Bank and the Company
shall have no financial obligations to the Participant under the Plan.
2.2 Change in Control.
(a) Benefits payable to a Participant that has terminated from service
as a Director prior to the date of a Change in Control shall nevertheless remain
payable thereafter without regard to such Change in Control. However, upon a
Change in Control, all future benefits payable pursuant to Sections 2.1, 2.2,
2.3, and 2.5 of the Plan, shall be made in a lump sum payment equal to the
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present value of all future benefits payable to such Participant as soon as
administratively feasible as of or immediately following such Change in Control,
but in no event later than the earlier of the end of the year in which the
Change in Control occurs, or if later, the 15th day of the third month following
the date the Change in Control occurred. The interest rate in effect for a 3
year U.S. Treasury Note on the date of the lump sum payment as reported in the
Wall Street Journal shall be used for purposes of calculating the present value
of amounts payable in accordance with Section 2.4.
(b) A Participant that has not terminated from service as a Director
prior to the date of a Change in Control who as of the date of such Change in
Control has reached such Retirement Date shall be immediately eligible to
receive the Retirement Benefit Amount specified at Section 2.4 herein without
regard to the actual termination of Service as a Director or the age of such
Director at such time. Such Retirement Benefit Amount shall be paid in the form
of a lump sum payment equal to the present value of the Retirement Benefit
Amount payable under Section 2.4 discounted as provided at Section 2.2(a).
Payment of the lump sum amount shall be made to the Participant as soon as
practicable as of or immediately following such Change in Control, but in no
event later than the earlier of the end of the year in which the Change in
Control occurs, or if later, the 15th day of the third month following date the
Change in Control occurred.
2.3 Total and Permanent Disability. In the event of the Disability of a
Participant on or after the Retirement Date who as of the date of Disability
otherwise meets the requirements set forth at Section 2.1 without regard to the
age of such Director, such Participant will be paid the Retirement Benefit
Amount specified at Article II, Section 2.4. Payment of such benefits shall
commence on the first business day of the month immediately following the Bank's
receipt of a certification of such Participant's Disability.
2.4 Level of Benefit Payments. A Participant who retires as a Director on
or after his or her Retirement Date in accordance with Sections 2.1, 2.2, 2.3 or
2.5 herein, and who enters into an agreement to be a consulting director of the
Bank and the Company in accordance with Section 2.6 hereinafter shall receive
the Retirement Benefit Amount set forth as follows:
The Retirement Benefit Amount shall be equal to a monthly payment
for a period of the life of the Participant, but in no event for a
period of less than 144 consecutive calendar months, equal to the
product of (.08333333) times 100% of the highest aggregate annual fees
paid to a Participant during the most recently completed three
calendar year periods ending on or before such Participant's
Retirement Date; provided that annual fees paid for purposes of
computation of the Retirement Benefit Amount shall include retainer
fees and fees paid for regular Board meetings attended (and excluding
payment of fees for Special Meetings and Committee meetings) by the
Bank and the Company.
2.5 Death of Participant. Upon the death of a Participant who is receiving
benefit payments under the Plan prior to his or her death, the remaining monthly
payments to be made under the Plan (if any) shall be paid to the Beneficiary
after the Participant's death. Such remaining payments shall be made until the
total number of monthly payments made directly to such Participant plus the
number of monthly payments made to such Beneficiary shall equal a total of 144
monthly payments. Upon the death of a Participant who is not receiving benefit
payments under the Plan prior to his or her death who as of the date of death
otherwise meets the requirements set forth at Section 2.1, the Bank shall pay to
the Beneficiary the Retirement Benefit Amount set forth at Article II, Section
2.4 for a period of 144 monthly payments. If a Beneficiary dies prior to
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receiving all payments of the Retirement Benefit Amount, then the remaining
monthly payments will continue to be paid to the Beneficiary's estate, and all
obligations of the Bank and the Company under the Plan shall cease to exist with
respect to such Beneficiary only after all such payments have been made.
2.6 Notice of Retirement. A director electing to participate in the Plan
shall deliver written notice ("Notice") to the Board not less than thirty days
prior to the actual Retirement Date that such Director elects to participate in
the Plan. Such Notice, in a form similar to that contained at Schedule A hereto,
shall specify the date of such retirement from the Board as a Director and the
Participant's availability as a Consulting Director. A Participant who
terminates service as a Director upon death, Disability, or a Change in Control
shall not be required to deliver such Notice in order to be entitled to receive
benefits under the Plan.
2.7 Delay of Payments. In the event the Director is a "specified employee"
as defined in Section 409A at the time of his termination from service, then
payments to the Director shall not commence until six months after the
Directors's termination from service, or his death if earlier. Any payments that
are delayed because of the preceding sentence shall be accumulated without
interest and paid to the Director or his Beneficiary as soon as practicable
after the end of the six-month period.
ARTICLE III
TRUST/NON-FUNDED STATUS OF PLAN
3.1 Trust/Non Funded Status of Plan. Except as may be specifically
provided, nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Bank, the Company and the
Participant or any other person. Any funds which may be invested under the
provisions of this Plan shall continue for all purposes to be a part of the
general funds of the Bank. No person other than the Bank shall by virtue of the
provisions of this Plan have any interest in such funds. The Bank shall not be
under any obligation to use such funds solely to provide benefits hereunder, and
no representations have been made to any Participant that such funds can or will
be used only to provide benefits hereunder. To the extent that any person
acquires a right to receive payments under the Plan, such rights shall be no
greater than the right of any unsecured general creditor.
ARTICLE IV
VESTING
4.1 Vesting. All benefits under this Plan are deemed non-vested and
forfeitable prior to a Participant meeting the requirements set forth at
Sections 2.1, 2.2, 2.3 and 2.5 herein. All benefits payable hereunder shall be
deemed 100% vested and non-forfeitable by the Participant upon his or her
meeting the requirements set forth at Sections 2.1, 2.2, 2.3 or 2.5 herein. No
benefits shall be deemed payable hereunder for any period prior to the time that
such benefits shall be deemed 100% vested and non-forfeitable.
ARTICLE V
TERMINATION
5.1 Termination. All the rights of a Participant shall terminate
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immediately upon the Participant ceasing to be in the active service of the Bank
or the Company prior to the time that benefits payable under the Plan shall be
deemed to be 100% vested and non-forfeitable in accordance with Article IV. At
the sole discretion of the Committee, a leave of absence approved by the Board
shall not constitute a cessation of service within the meaning of this Section
5.1.
ARTICLE VI
GENERAL PROVISIONS
6.1 Other Benefits. Nothing in this Plan shall diminish or impair a
Participant's eligibility, participation or benefit entitlement under any other
benefit, insurance or compensation plan or agreement of the Bank or the Company
now or hereinafter in effect.
6.2 No Effect on Employment or Service. This Plan shall not be deemed to
give any Participant or other person in the employ or service of the Bank or the
Company any right to be retained in the employment or service of the Bank or the
Company, or to interfere with the right of the Bank or the Company to terminate
any Participant or such other person at any time and to treat him or her without
regard to the effect which such treatment might have upon him or her as a
Participant in this Plan.
6.3 Legally Binding. The rights, privileges, benefits and obligations under
this Plan are intended to be legal obligations of the Bank and binding upon the
Bank, its successors and assigns.
6.4 Modifications. The Bank, by action of the Board of Directors, reserves
the exclusive right to amend, modify, or terminate this Plan. Any such
termination, modification or amendment shall not terminate or diminish any
rights or benefits accrued by any Participant prior thereto without regard to
whether such rights or benefits shall be deemed vested as of such date. The Bank
shall give thirty (30) days notice in writing to any Participant prior to the
effective date of any amendment, modification or termination of this Plan.
Notwithstanding the foregoing, the Plan may not be terminated unless the
termination complies with the applicable requirements of Section 409A.
6.5 Arbitration. Any controversy or claim arising out of or relating to the
Plan or the breach thereof shall be settled by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association, with
such arbitration hearing to be held at the offices of the American Arbitration
Association ("AAA") nearest to the home office of the Bank, unless otherwise
mutually agreed to by the Participant and the Bank, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
6.6 Limitation. No rights of any Participant are assignable by any
Participant or Beneficiary, in whole or in part, either by voluntary or
involuntary act or by operation of law. The rights of a Participant or
Beneficiary hereunder are not subject to anticipation, alienation, sale,
transfer, assignment, pledge, hypothecation, encumbrance or garnishment by
creditors of the Participant or Beneficiary. Further, a Participant's rights
under the Plan are not subject to the debts, contracts, liabilities,
engagements, or torts of any Participant. No Participant or Beneficiary shall
have any right under this Plan or right against any assets held or acquired
pursuant thereto other than the rights of a general, unsecured creditor of the
Bank pursuant to the unsecured promise of the Bank to pay the benefits accrued
hereunder in accordance with the terms of this Plan. The Bank has no obligation
under this Plan to fund or otherwise secure its obligations to render payments
hereunder to a Participant or Beneficiary. No Participant or Beneficiary shall
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have any discretion in the use, disposition, or investment of any asset acquired
or set aside by the Bank to provide benefits under this Plan.
6.7 ERISA and IRS Disclaimer. It is intended that the Plan be neither
an "employee welfare benefit plan" nor an "employee pension benefit plan" for
purposes of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Further, it is intended that the Plan will not cause the interest of
a Participant under the Plan to be includable in the gross income of such
Participant prior to the actual receipt of a payment under the Plan for purposes
of the Code.
6.8 Regulatory Matters.
(a) The Participant or Beneficiary shall have no right to receive
compensation or other benefits in accordance with the Plan for any period after
termination of service for Just Cause. Termination for "Just Cause" shall
include termination because of the Participant's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the Plan.
(b) Notwithstanding anything herein to the contrary, any payments made
to a Participant or Beneficiary pursuant to the Plan shall be subject to and
conditioned upon compliance with 12 USC ss.1828(k) and 12 CFR 563.39 and any
regulations promulgated thereunder.
6.9 Incompetency. If the Bank shall find that any person to whom any
payment is payable under the Plan is deemed unable to care for his or her
personal affairs because of illness or accident, any payment due (unless a prior
claim therefor shall have been made by a duly appointed guardian, committee or
other legal representative) may be paid to the spouse, a child, a parent, or a
brother or sister, or to any person deemed by the Bank to have incurred expense
for such person otherwise entitled to payment, in such manner and proportions as
the Board may determine in its sole discretion. Any such payments shall
constitute a complete discharge of the liabilities of the Bank under the Plan.
6.10 Construction. The Committee shall have full power and authority to
interpret, construe and administer this Plan and the Committee's interpretations
and construction thereof, and actions thereunder shall be binding and conclusive
on all persons for all purposes. Directors of the Bank or the Company shall not
be liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Plan unless attributable to his or her
own willful, gross misconduct or lack of good faith.
6.11 Plan Administration. The Board shall administer the Plan; provided,
however, that the Board may appoint an administrative committee (i.e., the
Committee) to provide administrative services or perform duties required by this
Plan. The Committee shall have only the authority granted to it by the Board.
6.12 Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of New Jersey, except to the extent that
federal law shall be deemed to apply.
6.13 Section 409A. The Plan shall be administered and interpreted in a
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manner consistent with Section 409A.
6.14 Successors and Assigns. The Plan shall be binding upon any successor
or successors of the Bank, and unless clearly inapplicable, reference herein to
the Bank shall be deemed to include any successor or successors of the Bank.
6.15 Sole Agreement. The Plan expresses, embodies, and supersedes all
previous agreements, understandings, and commitments, whether written or oral,
between the Bank and any Participants hereto with respect to the subject matter
hereof.
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IN WITNESS WHEREOF, the Bank and the Company have caused the Plan to be
executed by its duly authorized officer.
American Bank of New Jersey
6/19/2008 By: /s/ W. George Parker
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Date
Title: Chairman of the Board of Directors
6/19/2008 /s/ Kathleen Walsh
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Date Witness
American Bancorp of New Jersey, Inc.
6/19/2008 By: /s/ W. George Parker
- ---------------------------- ----------------------------------
Date
Title: Chairman of the Board of Directors
6/19/2008 /s/ Kathleen Walsh
- ----------------------------- ----------------------------------
Date Witness
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SCHEDULE A
AMERICAN BANK OF NEW JERSEY
BLOOMFIELD, NEW JERSEY
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DIRECTORS' CONSULTATION AND RETIREMENT PLAN
NOTICE OF RETIREMENT AND PARTICIPATION
- -------------------------------------------------------------------------------
WHEREAS, the Board of Directors of American Bank of New Jersey, Bloomfield,
New Jersey ("Bank") has previously adopted the American Bank of New Jersey
Directors Consultation and Retirement Plan ("Plan"); and
WHEREAS, upon retirement as a Director, I am eligible to elect to
participate in the Plan.
My signature below hereby evidences my request to the Bank of my election
to participate in the Plan, as follows:
1. This election to participate in the Plan is being delivered to the Bank
effective ---------------------------;
2. I hereby resign as a director of both the Bank and the Company as of
___________________________ ("Retirement Date");
3. Upon retirement from the Board as of the Retirement Date, I shall be
appointed as a Consulting Director to the Bank and the Company and shall be
available to advise the Bank and the Company from time to time on business
and community relations matters as may be requested;
4. As a Consulting Director, I will not have any specific duties or
responsibilities, except as may be specifically requested from time to time
by the Board;
5. Compensation as a Consulting Director shall be as specified at Article II
of the Plan as a consulting retainer and retirement benefit;
6. Any benefits payable in accordance with the Plan on or after my death shall
be payable to my spouse if then living, and my spouse's estate thereafter.
If my spouse should predecease me, then upon my death, all remaining
benefit payments shall be payable to my estate;
7. I understand that the above listed items constitute the only benefits that
shall be delivered to me as a Participant in the Plan as further detailed
in the Plan.
A-1
Entered into on such date as noted below:
Accepted: ___________________________________ __________________
Retiring Director Date
Accepted: ___________________________________ __________________
For the Bank Date
Accepted: ___________________________________ __________________
For the Company Date
A-2