BCB BANCORP, INC.
EXECUTIVE AGREEMENT
WHEREAS, JAMES E. COLLINS ("Executive") and BCB BANCORP, INC. (the
"Company") and BCB COMMUNITY BANK (the "Bank") have entered into an Executive
Agreement ("Executive Agreement") to guarantee and ensure that the Executive
shall receive the full value of the benefits to which he is entitled under
various benefit plans sponsored by the Company or by the Bank in which the
Executive is a participant; and
WHEREAS, tax law provisions relating to "golden parachute payments" could
have the effect of reducing the benefits otherwise promised to Executive under
the various benefit plans sponsored by the Company or the Bank as a result of a
Change in Control of the Company or the Bank, either as the result of cut-backs
in the benefit due to restrictions imposed by the Company or the Bank's
regulators or the imposition of an excise tax on the deemed "excess parachute
payment"; and
WHEREAS, the Board believes that this Executive Agreement is in the best
interests of the Company and the Bank and their shareholders and will provide
the benefits intended to be provided to Executive in the event of a change in
control of the Company or the Bank, without any reduction because of tax code
"penalties" or excise taxes relating to a change in control; and
WHEREAS, Section 409A of the Internal Revenue Code ("Code") necessitates
certain changes to this Executive Agreement and the Bank and Executive desire to
amend this Executive Agreement to comply with this Code Section.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereto
hereby agree as follows:
1. In the event of a Change in Control (as defined in the Change in Control
Agreement between the Company and the Executive) of the Bank or the Company, the
Executive shall be entitled to receive, pursuant to this Executive Agreement, an
amount payable by the Company or the Bank, in addition to any compensation or
benefits otherwise paid by the Bank or the Company, which shall equal the
difference, if any, between (i) the amount that would be paid by the Company or
the Bank under the terms of the various benefit plans without regard to any
reduction that may be required or imposed by any regulatory authority having
jurisdiction over the Company or the Bank, and (ii) the amount that is actually
paid to or for the benefit of the Executive by the Company or the Bank under the
terms of the various benefit plans.
2. In addition, in each calendar year that Executive is entitled to receive
payments or benefits under the provisions of a benefit plan and this Executive
Agreement, the independent accountants of the Company or the Bank shall
determine if an excess parachute payment (as defined in Code Section 4999 of the
Code) exists. Such determination shall be made after taking any reductions
permitted pursuant to Section 280G of the Code and the regulations thereunder.
Any amount determined to be an excess parachute payment after taking into
account such reductions shall be hereafter referred to as the "Initial Excess
Parachute Payment." As soon as practicable after a Change in Control, the
Initial Excess Parachute Payment shall be determined. Upon the Date of
Termination following a Change in Control, the Company or the Bank shall pay
Executive, subject to applicable withholding requirements under applicable state
or federal law an amount equal to:
(i) twenty (20) percent of the Initial Excess Parachute Payment (or
such other amount equal to the tax imposed under Section 4999 of
the Code), and
(ii) such additional amount (tax allowance) as may be necessary to
compensate Executive for the payment by Executive of state and
federal income and excise taxes on the payment provided under
Clause (i) and on any payments under this Clause (ii). In
computing such tax allowance, the payment to be made under
Clause (i) shall be multiplied by the "gross up percentage"
("GUP"). The GUP shall be determined as follows:
Tax Rate
GUP = ---------------
1- Tax Rate
The Tax Rate for purposes of computing the GUP shall be the
highest marginal federal and state income and employment-related
tax rate, including any applicable excise tax rate, applicable
to the Executive in the year in which the payment under Clause
(i) is made.
Notwithstanding the foregoing, any payment pursuant to this Executive
Agreement shall be made no later than sixty (60) days after the date on which
the Executive remits any excise tax to the required taxing authority.
3. Notwithstanding the foregoing, if it shall subsequently be determined in
a final judicial determination or a final administrative settlement to which
Executive is a party that the excess parachute payment as defined in Section
4999 of the Code, reduced as described above, is different from the Initial
Excess Parachute Payment (such different amount being hereafter referred to as
the "Determinative Excess Parachute Payment") then the Company or Bank's
independent accountants shall determine the amount (the "Adjustment Amount") the
Executive must pay to the Company or Bank or the Company or Bank must pay to the
Executive in order to put the Executive (or the Company or Bank, as the case may
be) in the same position as the Executive (or the Company or Bank, as the case
may be) would have been if the Initial Excess Parachute Payment had been equal
to the Determinative Excess Parachute Payment. In determining the Adjustment
Amount, the independent accountants shall take into account any and all taxes
(including any penalties and interest) paid by or for Executive or refunded to
Executive or for Executive's benefit. As soon as practicable after the
Adjustment Amount has been so determined, the Company or the Bank shall pay the
Adjustment Amount to Executive or the Executive shall repay the Adjustment
Amount to the Company or Bank, as the case may be. The purpose of this paragraph
is to assure that (i) the Executive is not paid more as reimbursement for the
golden parachute excise tax than it may ultimately be determined is necessary to
make him whole, and (ii) if it is subsequently determined that additional golden
parachute excise tax is owed by him, additional reimbursement payments will be
made to him to make him whole for the additional excise tax.
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4. In each calendar year that Executive receives payments or benefits under
one or more benefit plans sponsored by the Bank or the Company, Executive shall
report on his state and federal income tax returns such information as is
consistent with the determination made by the independent accountants of the
Company or Bank as described above. The Company and the Bank shall indemnify and
hold Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorney's fees, interest, fines and penalties)
that Executive incurs as a result of so reporting such information. Executive
shall promptly notify the Company or the Bank in writing whenever the Executive
receives notice of the institution of a judicial or administrative proceeding,
formal or informal, in which the federal tax treatment under Section 4999 of the
Code of any amount paid or payable under this Supplemental Agreement is being
reviewed or is in dispute. The Company or the Bank shall assume control at its
expense over all legal and accounting matters pertaining to such federal tax
treatment (except to the extent necessary or appropriate for Executive to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable pursuant to this contract). The Executive shall cooperate fully with
the Company or the Bank in any such proceeding. The Executive shall not enter
into any compromise or settlement or otherwise prejudice any rights the Company
or the Bank may have in connection therewith without prior consent to the
Company or Bank.
5. This Executive Agreement shall be binding on the Company, the Bank,
their successors and assigns and the benefits hereunder shall inure to the
benefit of Executive, his heirs and beneficiaries.
IN WITNESS WHEREOF, the Company, the Bank, and the Executive have caused
this Executive Agreement to be executed as of the 10th day of December, 2008.
BCB BANCORP, INC.
By: /s/ Mark D. Hogan
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BCB COMMUNITY BANK
By: /s/ Mark D. Hogan
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EXECUTIVE
By: /s/ James E. Collins
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James E. Collins
Senior Lending Officer