SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a 6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ASB Holding Company
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[ASB Holding Company Letterhead]
December 28, 2004
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of ASB Holding
Company (the "Company"), we invite you to attend our 2005 Annual Meeting of
Stockholders (the "Meeting") to be held at The Wilshire Grand Hotel, 350
Pleasant Valley Way, West Orange, New Jersey, on January 20, 2005, at 10:00 a.m.
The attached Notice of Annual Meeting of Stockholders and Proxy Statement
describe the formal business to be transacted at the Meeting.
The Board of Directors of the Company has determined that the matters
to be considered at the Meeting, described in the accompanying Notice of Annual
Meeting and Proxy Statement, are in the best interest of the Company and its
stockholders. The Board of Directors unanimously recommends a vote "FOR" each
matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS QUICKLY AS POSSIBLE. This will not prevent you from voting in person
at the Meeting, but will assure that your vote is counted if you are unable to
attend the Meeting.
Sincerely,
/s/Joseph Kliminski
Joseph Kliminski
President and Chief Executive Officer
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ASB HOLDING COMPANY
365 BROAD STREET
BLOOMFIELD, NEW JERSEY 07003
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 20, 2005
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of ASB Holding Company (the "Company") will be held at The Wilshire Grand Hotel,
350 Pleasant Valley Way, West Orange, New Jersey, on January 20, 2005, at 10:00
a.m. The Meeting is for the purpose of considering and acting upon the following
matters:
1. The election of two directors of ASB Holding Company; and
2. The approval of the ASB Holding Company 2005 Stock Option Plan;
3. The approval of the American Savings Bank of NJ 2005 Restricted Stock
Plan; and
4. The ratification of the appointment of Crowe Chizek and Company LLC as
the Company's independent auditor for the fiscal year ending September
30, 2005.
The transaction of such other business as may properly come before the
Meeting, or any adjournments thereof, may also be acted upon. The Board of
Directors is not aware of any other business to come before the Meeting.
The Board of Directors of the Company has determined that the matters
to be considered at the Meeting, described in the accompanying Notice of Annual
Meeting and Proxy Statement, are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
Action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Pursuant to the
Company's Bylaws, the Board of Directors has fixed the close of business on
December 10, 2004, as the record date for determination of the stockholders
entitled to vote at the Meeting and any adjournments thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY
REVOKE YOUR PROXY BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN
REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. IF YOU ARE PRESENT AT
THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT
BEFORE THE MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR
RECORD HOLDER TO VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Richard M. Bzdek
Richard M. Bzdek
Secretary
Bloomfield, New Jersey
December 28, 2004
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
ASB HOLDING COMPANY
365 BROAD STREET
BLOOMFIELD, NEW JERSEY 07003
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ANNUAL MEETING OF STOCKHOLDERS
January 20, 2005
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of ASB Holding Company (the "Company") to
be used at the Annual Meeting of Stockholders of the Company which will be held
at The Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey,
on January 20, 2005, at 10:00 a.m. (the "Meeting"). The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are being first mailed
to stockholders on or about December 28, 2004.
At the Meeting, stockholders will consider and vote upon (i) the
election of two directors of the Company, (ii) the approval of the ASB Holding
Company 2005 Stock Option Plan (the "2005 Option Plan"), (iii) the approval of
the American Savings Bank of NJ 2005 Restricted Stock Plan (the "2005 Restricted
Stock Plan"), and (iv) the ratification of the appointment of Crowe Chizek and
Company LLC as the Company's independent auditor for the fiscal year ending
September 30, 2005.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxyholder the discretionary authority to vote the
shares represented by such proxy in accordance with their best judgment on such
other business, if any, that may properly come before the Meeting or any
adjournment thereof.
The Company is the parent company of American Savings Bank of NJ (the
"Bank"). The Company was formed in June 2003 as a corporation chartered by the
Office of Thrift Supervision for the purpose of being a holding company for the
Bank. The Company is the majority-owned subsidiary of American Savings, MHC, a
federally-chartered mutual holding company. Because American Savings, MHC owns
approximately 70% of the Company's outstanding common stock, the votes cast by
American Savings, MHC will be determinative in the election of directors and the
ratification of auditors. The affirmative vote of both: (a) a majority of the
votes eligible to be cast at the Meeting including votes cast by American
Savings, MHC and (b) a majority of the votes cast at the Meeting by stockholders
other than American Savings, MHC (without regard to either (i) broker non-votes
or (ii) proxies marked "ABSTAIN") is required for the approval of the 2005
Option Plan and the 2005 Restricted Stock Plan.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of
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Directors will be voted as specified thereon. If no specification is made,
signed proxies will be voted "FOR" the nominees for election as directors as set
forth herein, "FOR" the approval of the 2005 Option Plan, "FOR" the approval of
the 2005 Restricted Stock Plan, and "FOR" the ratification of Crowe Chizek and
Company LLC as the Company's independent auditor for the fiscal year ending
September 30, 2005. The proxy confers discretionary authority on the persons
named thereon to vote with respect to the election of any person as a director
where the nominee is unable to serve, or for good cause will not serve, and with
respect to matters incident to the conduct of the Meeting.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
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Officers, directors and employees of the Company and its subsidiaries
have an interest in a matter being presented for stockholder approval. Upon
stockholder approval of the 2005 Option Plan and the 2005 Restricted Stock Plan,
officers, directors and employees of the Company and its subsidiaries may be
granted stock options or restricted stock under these new plans. The approval of
the 2005 Option Plan and the 2005 Restricted Stock Plan are being presented as
Proposal II and Proposal III, respectively.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on December 10, 2004
(the "Record Date"), are entitled to one vote for each share of Common Stock
then held. As of the Record Date, the Company had 5,554,500 shares of Common
Stock issued and outstanding.
As provided in the Charter of the Company, for a period of five years
from October 3, 2003, the date of the completion of the Company's stock
offering, no person, except for American Savings, MHC, is permitted to
beneficially own in excess of 10% of the Company's outstanding common stock (the
"Limit"), and any shares acquired in violation of this Limit, are not entitled
to any vote. A person or entity is deemed to beneficially own shares owned by an
affiliate of, as well as persons acting in concert with, such person or entity.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute a
quorum at the Meeting. With respect to any matter, broker non-votes (i.e.,
shares for which a broker indicates on the proxy that it does not have
discretionary authority as to such shares to vote on such matter) will be
considered present for purposes of determining whether a quorum is present. In
the event there are not sufficient votes for a quorum or to ratify any proposals
at the time of the Meeting, the Meeting may be adjourned in order to permit the
further solicitation of proxies.
As to the election of directors (Proposal I), the proxy provided by the
Board of Directors allows a stockholder to vote for the election of the nominees
proposed by the Board of Directors, or to withhold authority to vote for the
nominees being proposed. Under the Company's bylaws, directors are elected by a
plurality of votes cast, without regard to either (i) broker non-votes or (ii)
proxies as to which authority to vote for the nominees being proposed is
withheld.
Concerning all other matters that may properly come before the Meeting,
including the approval of the 2005 Option Plan (Proposal II), the approval of
the 2005 Restricted Stock Plan (Proposal III) and the ratification of the
independent auditors (Proposal IV), by checking the appropriate box, a
stockholder
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may: (i) vote "FOR" the item, (ii) vote "AGAINST" the item, or (iii) "ABSTAIN"
with respect to the item.
The affirmative vote of both: (a) a majority of the votes eligible to
be cast at the Meeting including votes cast by American Savings, MHC and (b) a
majority of the votes cast at the Meeting by stockholders other than American
Savings MHC (without regard to either (i) broker non-votes or (ii) proxies
marked "ABSTAIN") is required for the approval of the 2005 Option Plan and the
2005 Restricted Stock Plan. Broker non-votes and proxies marked "ABSTAIN" shall
have no effect on the outcome of the votes on Proposals II and III.
Unless otherwise required by law, all other matters, including the
ratification of the independent auditors (Proposal IV), shall be determined by a
majority of votes cast affirmatively or negatively without regard to (i) broker
non-votes or (ii) proxies marked "ABSTAIN" as to that matter.
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the outstanding shares of
Common Stock are required to file reports regarding such ownership pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the Record Date, the ownership of the Company's employee
stock ownership plan and the ownership of all executive officers and directors
of the Company. Management knows of no person or group that owns more than 5% of
the outstanding shares of Common Stock at the Record Date other then American
Savings, MHC.
Percent of Shares
Amount and Nature of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
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American Savings, MHC 3,888,150 70.0%
365 Broad Street
Bloomfield, New Jersey 07003
American Savings Bank of NJ Employee Stock 133,308 (1) 2.4%
Ownership Plan Trust (the "ESOP")
365 Broad Street
Bloomfield, New Jersey 07003
All directors and executive officers of the
Company as a group (nine persons) 220,924(2) 4.0%
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(1) These shares are held in a suspense account and are allocated among
participants annually on the basis of compensation as the ESOP debt is
repaid. As of the Record Date, 3,333 shares have been allocated to ESOP
participants. The Board of Directors appointed all non-employee directors
to serve as ESOP Trustees and as members of the ESOP Plan Committee. The
ESOP Plan Committee directs the vote of all unallocated shares and shares
allocated to participants if timely voting directions are not received for
such shares.
(2) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership. Excludes 133,308
shares held by the ESOP.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of the Common Stock, to file reports
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of ownership and changes in ownership of the Common Stock with the Securities
and Exchange Commission and to provide copies of those reports to the Company.
The Company is not aware of any beneficial owner, as defined under Section
16(a), of more than ten percent of its Common Stock other than American Savings,
MHC. To the Company's knowledge, all Section 16(a) filing requirements
applicable to its officers and directors were complied with during the 2004
fiscal year.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Company's charter requires that the Board of Directors be divided
into three classes, as nearly equal in number as possible, each class to serve
for a three-year period, with approximately one-third of the directors elected
each year. The Board of Directors currently consists of seven members. Two
directors will be elected at the Meeting, each to serve for a three-year term
and until their successors have been elected and qualified.
Stanley Obal and Vincent S. Rospond have been nominated by the Board of
Directors to serve as directors. Both of the nominees are currently members of
the Board of Directors. It is intended that proxies solicited by the Board of
Directors will, unless otherwise specified, be voted for the election of the
named nominees. If any of the nominees is unable to serve, the shares
represented by all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend or the size of the Board may
be reduced to eliminate the vacancy. At this time, the Board of Directors knows
of no reason why any of the nominees might be unavailable to serve.
The following table sets forth the names, ages, terms of, length of
board service and the number and percentage of shares of Common Stock
beneficially owned by the nominees, the directors continuing in office and the
executive officers of the Company.
Shares of
Age at Year First Current Common Stock Percent
September 30, Elected or Term to Beneficially of
Name 2004 Appointed(1) Expire Owned(2) Class
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Board Nominees for Term to Expire in 2008
Stanley Obal 82 1981 2005 10,000 *
Vincent S. Rospond 72 1981 2005 40,000 *
Directors Continuing in Office
W. George Parker 79 1967 2006 34,044 *
H. Joseph North 72 1991 2006 2,000 *
Joseph Kliminski 61 1986 2007 40,292 *
Robert A. Gaccione 63 2003 2007 15,000 *
James H. Ward, III 55 1991 2007 44,000 *
Executive Officers of the Company
Richard M. Bzdek 51 N/A N/A 31,500 *
Eric B. Heyer 42 N/A N/A 4,088 *
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* Less than 1%
(1) Refers to the year the individual first became a director of the Bank. Upon
formation of the Company in June 2003, each director of the Bank at that
time became a director of the Company.
(2) Beneficial ownership as of the Record Date. Includes shares of Common Stock
held directly as well as by spouses or minor children, in trust, and other
indirect beneficial ownership.
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Biographical Information
Directors and Executive Officers of the Company. Set forth below is the
business experience for the past five years of each of the directors, nominees
and executive officers of the Company.
Stanley Obal has been a member of the Board since 1981. Mr. Obal
retired in 1982 and was the owner of Obal's Inn, a tavern and restaurant in
Bloomfield, New Jersey.
Vincent S. Rospond has been a member of the Board since 1981. He is an
attorney and the majority stockholder of the law firm of Rospond, Rospond &
Conte, P.A. in Bloomfield, New Jersey. Rospond, Rospond & Conte serves as
general counsel to the Bank. Mr. Rospond is the president and a trustee of
United Way of Bloomfield, is a member and the former legal counsel of Bloomfield
Chamber of Commerce, and is a member and the treasurer of North Jersey
Manufacturer's & Businessmen Association. He is also a member of the Cornell
Club of New Jersey, the Essex County Bar Association, the Newark Art Museum, the
Bloomfield Music Federation and the New Jersey Bar Association.
W. George Parker has been a member of the Board since 1967 and Chairman
since 1990. Mr. Parker is the owner, president and chief executive officer of
Adco Chemical Company, located in Newark, New Jersey.
H. Joseph North has been a member of the Board since 1991. Mr. North
retired in 1987 as Town Administrator of Bloomfield, New Jersey after 20 years
of service as the municipality's chief administrative officer. Mr. North is a
past president and a lifetime member of the New Jersey Municipal Management
Association and is a former member of the International City Management
Association. Mr. North is also a former president of the Bloomfield Lions Club,
Bloomfield Fifth Quarter Club and Bloomfield Tennis Federation.
Joseph Kliminski has been a member of the Board since 1986. He has been
employed by the Bank since 1967 and became President and Chief Executive Officer
of the Bank in 1987 and President and Chief Executive Officer of the Company
upon its formation in June 2003. Mr. Kliminski is a member and past president of
the Bloomfield Lions Club, is president of the Advisory Board to the Bloomfield
Town Council, chairman of the Bloomfield Education Foundation, and chairman of
the Deborah Hospital Children of the World Golf Tournament. Mr. Kliminski also
serves on the Executive Committee of the Bloomfield Center Alliance, and is a
member and former president of the Board of Trustees of the Bloomfield Public
Library. He is also a former member of the Board of Governors of the New Jersey
League of Community Bankers and past president of the Essex County Savings
League.
Robert A. Gaccione has been a member of the Board since 2003. He has
been a senior partner of the law firm of Gaccione, Pomaco & Malanga, P.C. in
Belleville, New Jersey for thirty years. He is a former Federal Bureau of
Investigation agent. Mr. Gaccione also serves as the Essex County Tax Board
Commissioner. He served as a director of Franklin Community Bank, a commercial
bank located in Nutley, New Jersey for three years. Mr. Gaccione is a member and
the past president of the Belleville Rotary Club, is the president of the Clara
Maass Foundation and is a member of the Belleville Foundation.
James H. Ward, III has been a member of the Board since 1991 and Vice
Chairman since 2003. From 1998 to 2000, he was the majority stockholder and
Chief Operating Officer of Rylyn Group, which operated a restaurant in
Indianapolis, Indiana. Prior to that, he was the majority stockholder and Chief
Operating Officer of Ward and Company, an insurance agency in Springfield, New
Jersey, where he was employed from 1968 to 1998. He is now a retired investor.
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Richard M. Bzdek is the Bank's Executive Vice President, Chief
Operating Officer and Secretary and became Executive Vice President, Chief
Operating Officer and Secretary of the Company upon its formation in June 2003.
He has been employed by the Bank since 1975. Mr. Bzdek is the former president
and a current director of the Bloomfield Chamber of Commerce. He is a member of
the Financial Managers Society and serves as Vice Chairman on the Operations and
Technology Committee of the New Jersey League of Community Bankers. He is also
the treasurer and a trustee of United Way of Bloomfield and is a director and
co-founder of the Bloomfield Center Alliance.
Eric B. Heyer has been the Bank's Senior Vice President, Treasurer and
Chief Financial Officer since 1997 and became Chief Financial Officer of the
Company upon its formation in June 2003. Mr. Heyer has been employed by the Bank
since 1993. He was previously the chief financial officer of Monarch Savings
Bank in Kearny, New Jersey, where he was employed from 1986 to 1993. Mr. Heyer
is a member of the Financial Managers Society. He has previously served as a
trustee of Kingston United Methodist Church and currently serves on the finance
committee of Princeton United Methodist Church. Mr. Heyer also serves as a board
member of the Mental Health Clinic of Passaic in Clifton, New Jersey.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
Board and through activities of its committees. During the fiscal year ended
September 30, 2004, the Board of Directors met twenty- seven times, including
regularly scheduled and special meetings. No director attended fewer than 75% of
the total aggregate meetings of the Board of Directors plus meetings of
committees on which he served during the year ended September 30, 2004. The
Board maintains an Audit Committee and a Compensation Committee, as well as a
Nominating Committee, a Building and Grounds Committee and a Bylaws Committee.
The Compensation Committee consists of all directors who are
independent under the rules of the Nasdaq Stock Market. This committee met one
time during the year ended September 30, 2004. The responsibilities of this
committee include appraisal of the performance of officers of the Bank,
administration of management incentive compensation plans and review of the
directors' compensation. This committee reviews industry compensation surveys
and reviews the recommendations of senior management on employee compensation
matters.
The Audit Committee consists of Directors Parker, North and Ward, each
of whom is independent under the rules of the Nasdaq Stock Market. Each member
of the Audit Committee is qualified under the rules of the Nasdaq Stock Market
to serve as a member of the Audit Committee, however, none qualifies as an audit
committee financial expert within the meaning of the regulations of the
Securities and Exchange Commission. This committee meets periodically as needed
with the internal auditor and the external auditors and met three times during
the year ended September 30, 2004. This committee's main responsibilities
include oversight of the internal auditor and the external auditors and
monitoring of management and staff compliance with the Board's audit policies,
and applicable laws and regulations. This committee has adopted a written
charter, a copy of which was attached as an appendix to the 2003 proxy
statement.
Report of the Audit Committee. For the fiscal year ended September 30,
2004, the Audit Committee: (i) reviewed and discussed the Company's audited
financial statements with management, (ii) discussed with the Company's
independent auditor, Crowe Chizek and Company LLC ("Crowe Chizek"), all matters
required to be discussed under Statement on Auditing Standards No. 61, and (iii)
received from Crowe Chizek disclosures regarding Crowe Chizek's independence as
required by
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Independence Standards Board Standard No. 1 and discussed with Crowe Chizek its
independence. Based on the foregoing review and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2004.
Audit Committee:
W. George Parker
H. Joseph North
James H. Ward, III
Principal Accounting Fees and Services
Effective July 30, 2002, the Securities and Exchange Act of 1934 was
amended by the Sarbanes-Oxley Act of 2002 to require all auditing services and
non-audit services provided by an issuer's independent auditor to be approved by
the issuer's audit committee prior to such services being rendered or to be
approved pursuant to pre-approval policies and procedures established by the
issuer's audit committee. The Company's Audit Committee has not established
pre-approval procedures and instead specifically approves each service prior to
the engagement of the auditor for all audit and non-audit services.
All of the services listed below for 2004 and 2003 were approved by the
Audit Committee prior to the service being rendered. There were no services that
were not recognized to be non-audit services at the time of engagement that were
approved after the fact.
Audit Fees. The aggregate fees billed by Crowe Chizek for professional
services rendered for the audit of the Company's annual consolidated financial
statements and for the review of the consolidated financial statements included
in the Company's Quarterly Reports on Form 10-QSB for the fiscal years ended
September 30, 2004 and 2003 were $64,000 and $42,000, respectively.
Audit Related Fees. The aggregate fees billed by Crowe Chizek for
assurance and related services related to the Company's Form 10-KSB for the
years ended September 30, 2004 and 2003 were $7,500 and $7,500, respectively.
Tax Fees. The aggregate fees billed by Crowe Chizek for professional
services rendered for tax compliance, tax advice and tax planning for the years
ended September 30, 2004 and 2003 were $9,000 and $8,700, respectively. Such
tax-related services consisted in both years of tax return preparation and
consultation.
All Other Fees. The aggregate fees billed by Crowe Chizek for
professional services rendered for services or products other than those listed
under the captions "Audit Fees," "Audit-Related Fees," and "Tax Fees" totaled
$13,625 and $150,800, respectively, for the years ended September 30, 2004 and
2003, and consisted of expenses related to the Company's initial public
offering.
Director Nomination Process
The Nominating Committee consists of Directors Ward, North and
Gaccione. The Nominating Committee, which is not a standing committee,
recommends to the full Board of Directors persons for selection as the Board's
nominees for election as directors. The Committee was established subsequent to
the year ended September 30, 2004 and thus did not meet during fiscal 2004. As
defined by the rules
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of the Nasdaq Stock Market, each member of the committee is an independent
director. The responsibilities of the members of the Nominating Committee are
set forth in a charter, a copy of which is attached hereto as Appendix A.
The Company does not pay fees to any third party to identify or
evaluate or assist in identifying or evaluating potential nominees. The process
for identifying and evaluating potential nominees of the Board includes
soliciting recommendations from directors and officers of the Company and its
wholly-owned subsidiary, American Savings Bank of NJ. Additionally, the Board
will consider persons recommended by stockholders of the Company in selecting
nominees of the Board for election as directors. In the Board's selection of
nominees of the Board, there is no difference in the manner of evaluation of
potential nominees who have been recommended by directors or officers of the
Company and the Bank versus evaluation of potential nominees who have been
recommended by stockholders.
To be considered in the Board's selection of nominees of the Board,
recommendations from stockholders must be received by the Company in writing by
at least 120 days prior to the date the proxy statement for the previous year's
annual meeting was first distributed to stockholders. Recommendations should
identify the submitting stockholder, the person recommended for consideration
and the reasons the submitting stockholder believes such person should be
considered. Persons recommended for consideration as nominees of the Board
should meet the director qualification requirements set forth in Article III,
Sections 14, 15 and 16 of the Company's Bylaws, which require that (i) directors
may not serve as a management official of another depository institution or
depository holding company as those terms are defined by the regulations of the
Office of Thrift Supervision; (ii) directors must be persons of good character
and integrity and (iii) persons 75 years of age or above shall not be eligible
for election, re- election, appointment or re-appointment to the Board, except
for directors serving on the Board of American Savings Bank of NJ as of February
23, 1993. The Board also believes potential directors should be knowledgeable
about the business activities and market areas in which the Company and its
subsidiaries engage.
The good character and integrity requirement is embodied in Article
III, Section 15, which states that a person is not eligible to serve as director
if he or she: (1) is under indictment for, or has ever been convicted of, a
criminal offense, involving dishonesty or breach of trust and the penalty for
such offense could be imprisonment for more than one year; (2) is a person
against whom a federal or state bank regulatory agency has, within the past ten
years, issued a cease and desist order for conduct involving dishonesty or
breach of trust and that order is final and not subject to appeal; or (3) has
been found either by any federal or state regulatory agency whose decision is
final and not subject to appeal, or by a court to have (a) committed a willful
violation of any law, rule or regulation governing banking, securities,
commodities or insurance, or any final cease and desist order issued by a
banking, securities, commodities or insurance regulatory agency or (b) breached
a fiduciary duty involving personal profit.
Stockholder Communications
The Board of Directors does not have a formal process for stockholders
to send communications to the Board. In view of the infrequency of stockholder
communications to the Company, the Board does not believe that a formal process
is necessary. Written communications received by the Company from stockholders
are shared with the full Board no later than the next regularly scheduled Board
meeting. The Board encourages, but does not require, directors to attend the
annual meeting of stockholders. All of the Board's members attended the 2004
annual meeting of stockholders, except James H. Ward, III, who was unable to
attend due to illness.
-8-
Certain Relationships and Related Transactions
Other than as disclosed below, no directors, officers or their immediate
family members were engaged in transactions with the Company or any subsidiary
involving more than $60,000 (other than through a loan with the Bank) during
either of the two years ended September 30, 2004.
Director Vincent S. Rospond is the majority stockholder of the law firm of
Rospond, Rospond & Conte, P.A., which serves as general counsel to the Bank and
to which the Bank paid approximately $40,000 and $25,000 in legal fees during
the years ended September 30, 2004 and 2003. In addition, the Bank engages this
law firm in connection with loan closings, and fees paid by borrowers in loan
closings handled by such law firm totaled approximately $48,000 and $86,000
during fiscal 2004 and 2003.
Management believes that the transactions described above were on terms at
least as favorable to the Bank as the Bank would have received in transactions
with an unrelated party.
The Bank makes loans to its officers, directors and employees in the
ordinary course of business. The Bank waives its application fee for mortgages
to officers and employees on single-family owner- occupied homes or second
homes. It also reduces its application fee for mortgages on 2-4 family owner-
occupied homes by the amount of the application fee for single family home
mortgages and reduces its modification fee for 1-4 family owner-occupied home
mortgages or second home mortgages by the amount of the application fee for
single family home mortgages. Other than such application fee waivers and
reductions to officers and employees, such loans are on substantially the same
terms and conditions as those of comparable transactions prevailing at the time
with other persons. Such loans also do not include more than the normal risk of
collectibility or present other unfavorable features.
- --------------------------------------------------------------------------------
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
- --------------------------------------------------------------------------------
Compensation of Directors
Board Fees. Directors are currently paid a fee of $225 per Board meeting
attended, and no fees are paid for committee meetings. For fiscal year 2004,
each director received an additional annual fee of $25,000. Directors who also
serve as employees do not receive compensation as directors.
Directors Consultant and Retirement Plan. The Directors Consultant and
Retirement Plan provides retirement benefits to directors on their retirement
date. "Retirement date" means the date of termination of service as a director
following a participant's completion of not less than twelve 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
August 27, 1996 who have completed not less than five years of service as of
August 27, 1996 shall be the date of termination of service as a director
without regard to whether the twelve years of service requirement has been
fulfilled. Upon death or disability, a director shall be deemed to have
terminated service as of such date.
If a director agrees to become a consulting director to our board upon
retirement, he will receive a monthly payment for 144 months equal to 0.0833
times the average of the annual retainers paid (exclusive of payment of fees for
meetings) for the highest three yearly periods during the immediately prior
ten-year period. In the event of a change in control, all directors will be
presumed to have reached
-9-
the retirement date and each director will receive a lump sum payment equal to
the present value of future benefits payable.
Executive Compensation
Summary Compensation Table. The following table sets forth the
compensation awarded to or earned by the Company's President and Chief Executive
Officer and the other executive officers of the Company for the three fiscal
years ended September 30, 2004.
Annual Compensation
-----------------------------
All Other
Name and Principal Position Year Salary Bonus Compensation
- --------------------------- ------ ------ ----- ------------
Joseph Kliminski, President 2004 $250,000 $ 0 $188,101(1)
and Chief Executive Officer 2003 242,255 73,228 212,140
2002 197,447 35,455 90,427
Richard M. Bzdek, Executive 2004 $164,147 $ 0 $ 44,290(2)
Vice President, Chief 2003 162,244 30,492 46,498
Operating Officer and Secretary 2002 156,047 29,698 24,525
Eric B. Heyer, Senior Vice 2004 $145,000 $ 0 $ 32,617(3)
President, Treasurer and Chief 2003 139,615 50,322 31,019
Financial Officer 2002 122,308 24,283 15,724
- --------------
(1) For 2004, consists of (i) an accrual of $162,804 under Mr. Kliminski's
executive salary continuation agreement, (ii) an employer matching
contribution to the 401(k) Plan for Mr. Kliminski of $6,123, (iii) an
employer contribution to the Profit Sharing Plan for Mr. Kliminski of
$13,943, and (iv) the award of 292 shares under the ESOP as of December 31,
2003 based on the last reported sales price of the Common Stock of $17.90
on the date of the award.
(2) For 2004, consists of (i) an accrual of $21,249 under Mr. Bzdek's executive
salary continuation agreement, (ii) an employer matching contribution to
the 401(k) Plan for Mr. Bzdek of $4,647, (iii) an employer contribution to
the Profit Sharing Plan for Mr. Bzdek of $13,943, and (iv) the award of 249
shares under the ESOP as of December 31, 2003 based on the last reported
sales price of the Common Stock of $17.90 on the date of the award.
(3) For 2004, consists of (i) an accrual of $10,636 under Mr. Heyer's executive
salary continuation agreement, (ii) an employer matching contribution to
the 401(k) Plan for Mr. Heyer of $4,120, (iii) an employer contribution to
the Profit Sharing Plan for Mr. Heyer of $13,943, and (iv) the award of 219
shares under the ESOP as of December 31, 2003 based on the last reported
sales price of the Common Stock of $17.90 on the date of the award.
Employment Agreements. The Bank has entered into employment agreements
with Mr. Kliminski, Mr. Bzdek and Mr. Heyer. Mr. Kliminski's, Mr. Bzdek's and
Mr. Heyer's current base salaries are $250,000, $164,147 and $145,000,
respectively. Mr. Kliminski's employment agreement has a term of three years
while Mr. Bzdek's and Mr. Heyer's agreements have a term of two years. Each of
the agreements provides for an annual one-year extension of the term of the
agreement upon determination of the Board of Directors that the executive's
performance has met the requirements and standards of the Board, so that the
remaining term of the agreement continues to be three years, in the case of Mr.
Kliminski, and two years, in the case of Mr. Bzdek and Mr. Heyer. If the Bank
terminates Mr. Kliminski without "just cause"as defined in the agreement, he
will be entitled to a continuation of his salary from the date of termination
through the remaining term of the agreement, but in no event for a period of
less than two years. If the Bank terminates Mr. Bzdek or Mr. Heyer without "just
cause" as defined in the agreement, that individual will be entitled to a
continuation of his salary from the date of termination through the remaining
term of the agreement. Mr. Kliminski's employment agreement provides that if Mr.
Kliminski's employment is terminated without just cause within twenty-four
months of a change in control, he will be paid an amount equal to 2.999 times
his five-year average annual taxable cash compensation in
-10-
either a lump sum or, at his option, in periodic payments over a three-year
period or the remaining term of the agreement, whichever is less. Mr. Bzdek's
and Mr. Heyer's employment agreements provide that if their employment is
terminated without just cause within twelve months of a change in control, they
will be paid an amount equal to 2.0 times their five-year average annual taxable
cash compensation in either a lump sum or, at their option, in periodic payments
over a two-year period or the remaining term of the agreement, whichever is
less. If change in control payments had been made under the agreements as of
September 30, 2004, the payments would have equaled approximately $702,476,
$323,421 and $254,605 to Kliminski, Bzdek and Heyer, respectively.
The Company has entered into an employment agreement with Mr.
Kliminski, the terms of which are substantially the same as Mr. Kliminski's
employment agreement with the Bank. The agreement with the Company provides that
if Mr. Kliminski's employment is terminated without just cause as defined in the
agreement, he will be entitled to a continuation of his salary for three years
from the date of termination. Any payments to Mr. Kliminski under the employment
agreement with the Company will be reduced to the extent that payments are made
to Mr. Kliminski under his agreement with the Bank.
Executive Salary Continuation Agreements. The Bank has implemented
executive salary continuation agreements for the benefit of Messrs. Kliminski,
Bzdek and Heyer. The executive salary continuation agreements will provide
benefits at age 65 that would be comparable to approximately 50% of Mr.
Kliminski's average base salary based upon the average of the three highest out
of the last five years of employment, and 30% of average salary for Messrs.
Bzdek and Heyer. The benefits will be paid in equal monthly installments until
the death of the participant. If a participant terminates employment prior to
age 65, then the retirement benefit equals the then accrued balance of the
participant's liability reserve account, and the benefit is paid in equal
monthly installments until the death of the participant. Upon disability, the
participant will receive the then accrued balance of the participant's liability
reserve account, and the benefit is payable either in a lump sum or in 180
monthly installments. Upon a change in control of the Bank, and the
participant's termination, the participant will be deemed to reach age 65 and
will receive full retirement benefits. As long as such agreement remains in
effect, upon the death of a participant, the participant's beneficiary will be
paid a death benefit under the terms of the Endorsement Method Split Dollar Life
Insurance Agreement between the participant and the Bank.
For fiscal 2004, we accrued $162,804 under Mr. Kliminski's executive
salary continuation agreement, $21,249 under Mr. Bzdek's executive salary
continuation agreement and $10,636 under Mr. Heyer's executive salary
continuation agreement. These accruals reflect the scheduled accruals under the
plan in order for the retirement benefit provided by the plan to be fully
accrued at the expected retirement date. The accrual for Mr. Kliminski is higher
than for Messrs. Bzdek and Heyer due to the fewer number of months left to
accrue the full retirement benefit that will be payable to Mr. Kliminski at his
expected retirement date and also reflects a higher average base salary for Mr.
Kliminski and a higher percentage of such base provided under the plan, 50%
versus 30% for Messrs. Bzdek and Heyer. When the plan was established in
February 2002, there were 78 months until the expected retirement date for Mr.
Kliminski, compared to 196 months and 300 months for Messrs. Bzdek and Heyer.
The amounts required to accrue the present value of the retirement benefit
provided for each individual are based upon assumptions for both discount rate
and salary projections. These assumptions are reviewed at least annually and
provide the basis upon which monthly benefit accruals are recorded. Such
accruals are generally recorded in equal amounts from month to month with
changes made to such amounts as required by assumption changes.
-11-
- --------------------------------------------------------------------------------
PROPOSAL II - APPROVAL OF THE ASB HOLDING COMPANY
2005 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
General. The Board of Directors has adopted the ASB Holding Company
2005 Stock Option Plan (the "2005 Option Plan"), subject to approval by the
Company's stockholders. Pursuant to the 2005 Option Plan, up to 272,171 shares
of the Common Stock, are to be reserved from the Company's authorized but
unissued shares for issuance by the Company upon exercise of stock options to be
granted to officers, directors, employees, and other persons from time to time
("Options"). The purpose of the 2005 Option Plan is to attract and retain
qualified personnel for positions of substantial responsibility and to provide
additional incentive to certain officers, directors, employees and other persons
to promote the success of the business of the Company and the Bank. The 2005
Option Plan, which will become effective upon the date of stockholder approval
("Effective Date"), has a term of ten years, after which time no awards may be
made. The following summary of the material features of the 2005 Option Plan is
qualified in its entirety by reference to the complete provisions of the 2005
Option Plan which is attached hereto as Appendix B.
The 2005 Option Plan will be administered by the Board of Directors or
a committee of not less than two non-employee directors appointed by the
Company's Board of Directors and serving at the pleasure of the Board (the
"Option Committee"). Members of the Option Committee shall be "Non- Employee
Directors" within the meaning of Rule 16b-3 under to the Securities Exchange Act
of 1934 (the "Exchange Act"). The Option Committee may select the officers and
employees to whom options are to be granted and the number of Options to be
granted based upon several factors including prior and anticipated future job
duties and responsibilities, job performance, the Company's financial
performance and a comparison of awards given by other institutions that have
converted from mutual to stock form. A majority of the members of the Option
Committee shall constitute a quorum and the action of a majority of the members
present at any meeting at which a quorum is present shall be deemed the action
of the Option Committee.
Officers, directors, employees and other persons who are designated by
the Option Committee will be eligible to receive, at no cost to them, Options
under the 2005 Option Plan (the "Optionees"). Each Option granted pursuant to
the 2005 Option Plan shall be evidenced by an instrument in such form as the
Option Committee shall from time to time approve. It is anticipated that Options
granted under the 2005 Option Plan will constitute either Incentive Stock
Options (options that afford favorable tax treatment to recipients upon
compliance with certain restrictions pursuant to Section 422 of the Internal
Revenue Code of 1986, as amended ("Code"), and that do not normally result in
tax deductions to the Company) or Non- Incentive Stock Options (options that do
not afford recipients favorable tax treatment under Code Section 422). Option
shares may be paid for in cash, shares of the Common Stock, or a combination of
both. Common Stock used in full or partial payment of the exercise price must
have been owned by the person exercising such Option not less than six months
prior to the date of exercise. The Company will receive no monetary
consideration for the granting of stock options under the 2005 Option Plan.
Further, the Company will receive no consideration other than the option
exercise price per share for Common Stock issued to Optionees upon the exercise
of those Options.
Shares issuable under the 2005 Option Plan may be authorized but
unissued shares, treasury shares or shares purchased in the open market. An
Option which expires, becomes unexercisable, or is forfeited for any reason
prior to its exercise will again be available for issuance under the 2005 Option
Plan. No Option or any right or interest therein is assignable or transferable
except by will or the laws of descent
-12-
and distribution. The 2005 Option Plan shall continue in effect for a term of
ten years from the Effective Date.
Stock Options. The Option Committee may grant either Incentive Stock
Options or Non-Incentive Stock Options. Generally, except as may otherwise be
determined by the Option Committee at the time of the award, an Incentive Stock
Option may only be exercised while the Optionee serves as an employee of the
Company or within three months after termination of employment for a reason
other than death or disability (but in no event after the expiration date of the
Option). In the event of the disability or death of an Optionee during
employment, an exercisable Incentive Stock Option will continue to be
exercisable for one year and two years, respectively, to the extent exercisable
by the Optionee immediately prior to the Optionee's disability or death but only
if, and to the extent that, the Optionee was entitled to exercise such Incentive
Stock Options on the date of termination of employment. The terms and conditions
of Non- Incentive Stock Options relating to the effect of an Optionee's
termination of employment or service, disability, or death shall be such terms
as the Option Committee, in its sole discretion, shall determine at the time of
termination of service, disability or death, unless specifically determined at
the time of grant of such Options.
The exercise price for the purchase of Common Stock subject to an
Option may not be less than one hundred percent (100%) of the "Fair Market
Value" of the Common Stock covered by the Option on the date of grant of such
Option. For purposes of determining the Fair Market Value of the Common Stock,
if the Common Stock is traded otherwise than on a national securities exchange
at the time of the granting of an Option, then the exercise price per share of
the Option shall be not less than the mean between the last bid and ask price on
the date the Option is granted or, if there is no bid and ask price on that
date, then on the immediately prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the exercise price
per share shall be determined in good faith by the Option Committee. If an
officer or employee owns Common Stock representing more than ten percent of the
outstanding Common Stock at the time an Incentive Stock Option is granted, then
the exercise price shall be not less than one hundred and ten percent (110%) of
the Fair Market Value of the Common Stock at the time the Incentive Stock Option
is granted. No more than $100,000 of Incentive Stock Options can become
exercisable for the first time in any one year for any one person. The Option
Committee may impose additional conditions upon the right of an Optionee to
exercise any Option granted hereunder which are not inconsistent with the terms
of the 2005 Option Plan or the requirements for qualification as an Incentive
Stock Option, if such Option is intended to qualify as an Incentive Stock
Option.
No shares of Common Stock may be issued upon the exercise of an Option
until the Company has received full payment of the exercise price, and no
Optionee shall have any of the rights of a stockholder of the Company until
shares of Common Stock are issued to such Optionee. Upon the exercise of an
Option by an Optionee (or the Optionee's personal representative), the Option
Committee, in its sole and absolute discretion, may make a cash payment to the
Optionee, in whole or in part, in lieu of the delivery of shares of Common
Stock. Such cash payment to be paid in lieu of delivery of Common Stock shall be
equal to the difference between the Fair Market Value of the Common Stock on the
date of the Option exercise and the exercise price per share of the Option. Such
cash payment shall be in exchange for the cancellation of such Option. Such cash
payment shall not be made in the event that such transaction would result in
liability to the Optionee and the Company under Section 16(b) of the Exchange
Act or any related regulations promulgated thereunder.
The 2005 Option Plan provides that the Board of Directors of the
Company may authorize the Option Committee to direct the execution of an
instrument providing for the modification, extension or renewal of any
outstanding Option, provided that no such modification, extension or renewal
shall confer
-13-
on the Optionee any right or benefit which could not be conferred on the
Optionee by the grant of a new Option at such time, and shall not materially
decrease the Optionee's benefits under the Option without the Optionee's
consent, except as otherwise provided under the 2005 Option Plan.
Awards Under the 2005 Option Plan. The Board or the Option Committee
shall from time to time determine the officers, directors, employees and other
persons who shall be granted Options under the 2005 Option Plan, the number of
Options to be granted to any individual, and whether the Options granted will be
Incentive Stock Options and/or Non-Incentive Stock Options. In selecting
Optionees and in determining the number of Options to be granted, the Board or
the Option Committee may consider the nature of the services rendered by each
such individual, each individual's current and potential contribution to the
Company and such other factors as may be deemed relevant. Optionees may, if
otherwise eligible, be granted additional Options. In no event shall Common
Stock subject to Options granted to non- employee directors in the aggregate
under the 2005 Option Plan exceed 36% of the total number of shares reserved
under the 2005 Option Plan, and no more than 6% of the available shares of
Common Stock may be awarded to any individual non-employee director. In no
event, shall Common Stock subject to Options granted to any Employee exceed 25%
of the total number of the available shares of Common Stock.
Pursuant to the terms of the 2005 Option Plan, Non-Incentive Stock
Options to purchase shares of Common Stock as detailed below will be granted to
each non-employee director of the Company, as of the Effective Date, at an
exercise price equal to the Fair Market Value of the Common Stock on such date
of grant. Options may be granted to newly appointed or elected non-employee
directors within the sole discretion of the Option Committee, and the exercise
price shall be equal to the Fair Market Value of such Common Stock on the date
of grant. Twenty percent of the Options granted to non-employee directors on the
Effective Date will be first exercisable on the one year anniversary of the date
of the grant and 20% annually thereafter on the anniversary date of the award
during such period of service as a director or a director emeritus. Such Options
granted to non-employee directors will remain exercisable for up to ten years
from the date of grant. Upon the death or disability of a director or director
emeritus, such Options shall be deemed immediately 100% exercisable for their
remaining term. All outstanding Options become immediately exercisable in the
event of a change in control (as defined in the 2005 Option Plan) of the Company
or the Bank.
The table below presents information related to stock option awards
anticipated to be awarded upon stockholder approval of the 2005 Option Plan;
provided, however, that a letter of non-objection must be received from the
Office of Thrift Supervision in order to permit non-employee directors to
receive in the aggregate more than 30% of the total shares reserved under the
plan and more than 5% individually. If the non-objection of the Office of Thrift
Supervision is not received, the option award to each non- employee director
will be reduced to meet such restriction. No Options are expected to be awarded
to any associates of executive officers, directors or nominees.
NEW PLAN BENEFIT
OPTION PLAN
-----------
Number of Options
Name and Position Dollar Value$ (1) to be Granted
- ----------------- ----------------- ----------------
W. George Parker, Chairman N/A 15,650(3)
Joseph Kliminski, President, Chief Executive Officer N/A 64,640(2)
and Director
Robert A. Gaccione, Director N/A 15,650(3)
H. Joseph North, Director N/A 15,650(3)
Stanley Obal, Director N/A 15,650(3)(4)
-14-
Number of Options
Name and Position Dollar Value$ (1) to be Granted
- ----------------- ----------------- ----------------
Vincent S. Rospond, Director N/A 15,650(3)(4)
James H. Ward, III, Vice Chairman N/A 15,650(3)
Richard M. Bzdek, Executive Vice President, N/A 31,980(2)
Chief Operating Officer and Secretary
Eric B. Heyer, Senior Vice President N/A 29,258(2)
and Chief Financial Officer
Executive Group (3 persons) N/A 125,878(2)
Non-Executive Director Group (6 persons) N/A 93,900(3)
Non-Executive Officer Employee Group N/A 52,393(2)
- ----------------
(1) The exercise price of such Options shall be equal to the fair market value
of the Common Stock on the date of stockholder approval of the 2005 Option
Plan. Thus, on the date of stockholder approval, the Options will have zero
value. The exact dollar value of the Options will equal the difference
between the exercise price of such Options and the market price of the
Common Stock on the date of exercise of an Option. Accordingly, the exact
dollar value is not presently determinable.
(2) Options awarded to officers and employees will be exercisable as follows:
Options awarded at the time of stockholder approval are first exercisable
at the rate of 20% on the one year anniversary of the date of the award and
20% annually thereafter on the anniversary date of the award during periods
of continued service as an employee, director or director emeritus. Such
awards shall be 100% exercisable in the event of death, disability, or upon
a change in control of the Company or the Bank. Options awarded to
employees shall continue to be exercisable during continued service as an
employee, director or director emeritus. Options not exercised within three
months of termination of service as an employee shall thereafter be deemed
non-incentive stock options.
(3) Options awarded to directors are first exercisable at a rate of 20% on the
one year anniversary of the date of the award and 20% annually thereafter
on the anniversary date of the award during such period of service as a
director or director emeritus, and shall remain exercisable for ten years
without regard to continued service as a director or director emeritus.
Upon disability, death, or a change in control of the Company or the Bank,
such awards shall be 100% exercisable.
(4) Nominee for election as a director of the Company.
Effect of Mergers, Change of Control and Other Adjustments. Subject to
any required action by the stockholders of the Company, within the sole
discretion of the Option Committee, the aggregate number of shares of Common
Stock for which Options may be granted hereunder or the number of shares of
Common Stock represented by each outstanding Option will be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
shares of Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or decrease in the
number of shares of Common Stock effected without the receipt or payment of
consideration by the Company. Subject to any required action by the stockholders
of the Company, in the event of any change in control, recapitalization, merger,
consolidation, exchange of shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or event
(including a special or non-recurring dividend that has the effect of a return
of capital distribution to stockholders), the Option Committee, in its sole
discretion, shall have the power, prior to or subsequent to such action or
events, to (i) appropriately adjust the number of shares of Common Stock subject
to Options, the exercise price per share of such Option, and the consideration
to be given or received by the Company upon the exercise of any outstanding
Options; (ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or (iii) make such other adjustments in connection with the 2005 Option Plan
as the Option Committee, in its sole discretion, deems necessary, desirable,
appropriate or advisable. However, no action may be taken by the Option
Committee which would cause Incentive Stock Options granted pursuant to the 2005
Option Plan to fail to meet the requirements of Section 422 of the Code without
the consent of the Optionee.
-15-
The Option Committee will at all times have the power to accelerate the
exercise date of all Options granted under the 2005 Option Plan. In the case of
a Change in Control of the Bank or the Company as determined by the Option
Committee, all outstanding Options shall become immediately exercisable. A
Change in Control is defined to include (i) the sale of all, or a material
portion, of the assets of the Company or the Bank; (ii) the merger or
recapitalization of the Bank or the Company whereby the Bank or the Company is
not the surviving entity; (iii) a change in control of the Bank or the Company
as otherwise defined or determined by the Office of Thrift Supervision ("OTS")
or its regulations; or (iv) the acquisition, directly or indirectly, of the
beneficial ownership (within the meaning of Section 13(d) of the Exchange Act
and rules and regulations promulgated thereunder) of 25% or more of the
outstanding voting securities of the Company by any person, trust, entity, or
group. This limitation shall not apply to the purchase of shares by underwriters
in connection with a pubic offering of Company stock or the purchase of shares
of up to 25% of any class of securities of the Company by a tax-qualified
employee stock benefit plan which is exempt from the approval requirements set
forth under Section 574.3(c)(1)(vii) of OTS Regulations (12 C.F.R.
ss.574.3(c)(1)(vii)).
In the event of a Change in Control, the Option Committee and the Board
of Directors will take one or more of the following actions to be effective as
of the date of such Change in Control: (i) provide that such Options shall be
assumed, or equivalent Options shall be substituted, ("Substitute Options") by
the acquiring or succeeding corporation (or an affiliate thereof), provided
that: (A) any such Substitute Options exchanged for Incentive Stock Options
shall meet the requirements of Section 424(a) of the Code, and (B) the shares of
stock issuable upon the exercise of such Substitute Options shall constitute
securities registered in accordance with the Securities Act of 1933, as amended,
("1933 Act") or such securities shall be exempt from such registration in
accordance with Sections 3(a)(2) or 3(a)(5) of the 1933 Act (collectively,
"Registered Securities"), or in the alternative, if the securities issuable upon
the exercise of such Substitute Options shall not constitute Registered
Securities, then the Optionee will receive upon consummation of the Change in
Control a cash payment for each Option surrendered equal to the difference
between (1) the Fair Market Value of the consideration to be received for each
share of Common Stock in the Change in Control times the number of shares of
Common Stock subject to such surrendered Options, and (2) the aggregate exercise
price of all such surrendered Options, or (ii) in the event of a transaction
under the terms of which the holders of the Common Stock of the Company will
receive upon consummation thereof a cash payment (the "Merger Price") for each
share of Common Stock exchanged in the Change in Control transaction, to make or
to provide for a cash payment to the Optionees equal to the difference between
(A) the Merger Price times the number of shares of Common Stock subject to such
Options held by each Optionee (to the extent then exercisable at prices not in
excess of the Merger Price) and (B) the aggregate exercise price of all such
surrendered Options in exchange for such surrendered Options.
The power of the Option Committee to accelerate the exercise of Options
and the immediate exercisability of Options in the case of a Change in Control
of the Company could have an anti-takeover effect by making it more costly for a
potential acquiror to obtain control of the Company due to the higher number of
shares outstanding following such exercise of Options. The power of the Option
Committee to make adjustments in connection with the 2005 Option Plan, including
adjusting the number of shares subject to Options and canceling Options, prior
to or after the occurrence of an extraordinary corporate action, allows the
Option Committee to adapt the 2005 Option Plan to operate in changed
circumstances, to adjust the 2005 Option Plan to fit a smaller or larger
institution, and to permit the issuance of Options to new management following
such extraordinary corporate action. However, this power of the Option Committee
also has an anti-takeover effect, by allowing the Option Committee to adjust the
2005 Option Plan in a manner to allow the present management of the Company to
exercise more options and hold more
-16-
shares of the Company's Common Stock, and to possibly decrease the number of
Options available to new management of the Company.
Although the 2005 Option Plan may have an anti-takeover effect, the
Company's Board of Directors did not adopt the 2005 Option Plan specifically for
anti-takeover purposes. The 2005 Option Plan could render it more difficult to
obtain support for stockholder proposals opposed by the Company's Board and
management in that recipients of Options could choose to exercise such Options
and thereby increase the number of shares for which they hold voting power.
Also, the exercise of such Options could make it easier for the Board and
management to block the approval of certain transactions. In addition, the
exercise of such Options could increase the cost of an acquisition by a
potential acquiror.
In the event that the Bank shall be deemed critically undercapitalized
(as defined at 12 C.F.R. ss. 565.4), is subject to enforcement action by the
OTS, or receives a capital directive under 12 C.F.R. ss. 565.7, then all Options
awarded to executive officers or directors of the Company or its subsidiaries
must exercise such options or forfeit such Options.
Amendment and Termination of the 2005 Option Plan. The Board of
Directors may alter, suspend or discontinue the 2005 Option Plan, except that no
action of the Board shall increase the maximum number of shares of Common Stock
issuable under the 2005 Option Plan, materially increase the benefits accruing
to Optionees under the 2005 Option Plan or materially modify the requirements
for eligibility for participation in the 2005 Option Plan unless such action of
the Board shall be subject to approval or ratification by the stockholders of
the Company.
Possible Dilutive Effects of the 2005 Option Plan. The Common Stock to
be issued upon the exercise of Options awarded under the 2005 Option Plan may
either be authorized but unissued shares of Common Stock or shares purchased in
the open market. Because the stockholders of the Company do not have preemptive
rights, to the extent that the Company funds the 2005 Option Plan, in whole or
in part, with authorized but unissued shares, the interests of current
stockholders may be diluted. If upon the exercise of all of the Options, the
Company delivers newly issued shares of Common Stock (i.e., 272,171 shares of
Common Stock), then the dilutive effect to current stockholders would be
approximately 4.67%. The Company can avoid dilution resulting from awards under
the 2005 Option Plan by delivering shares repurchased in the open market upon
the exercise of Options.
Federal Income Tax Consequences. Under present federal tax laws, awards
under the 2005 Option Plan will have the following consequences:
1. The grant of an Option will not by itself result in the recognition of
taxable income to an Optionee nor entitle the Company to a tax deduction at
the time of such grant.
2. The exercise of an Option which is an "Incentive Stock Option" within the
meaning of Section 422 of the Code generally will not, by itself, result in
the recognition of taxable income to an Optionee nor entitle the Company to
a deduction at the time of such exercise. However, the difference between
the Option exercise price and the Fair Market Value of the Common Stock on
the date of Option exercise is an item of tax preference which may, in
certain situations, trigger the alternative minimum tax for an Optionee. An
Optionee will recognize capital gain or loss upon resale of the shares of
Common Stock received pursuant to the exercise of Incentive Stock Options,
provided that such shares are held for at least one year after transfer of
the shares or two years after the grant of the Option, whichever is later.
Generally, if the shares are not held for that period, the Optionee will
recognize ordinary income upon disposition in an amount equal to
-17-
the difference between the Option exercise price and the Fair Market Value
of the Common Stock on the date of exercise, or, if less, the sales
proceeds of the shares acquired pursuant to the Option.
3. The exercise of a Non-Incentive Stock Option will result in the recognition
of ordinary income by the Optionee on the date of exercise in an amount
equal to the difference between the exercise price and the Fair Market
Value of the Common Stock acquired pursuant to the Option.
4. The Company will be allowed a tax deduction for federal tax purposes equal
to the amount of ordinary income recognized by an Optionee at the time the
Optionee recognizes such ordinary income.
5. In accordance with Section 162(m) of the Code, the Company's tax deductions
for compensation paid to the most highly paid executives named in the
Company's Proxy Statement may be limited to no more than $1 million per
year, excluding certain "performance-based" compensation. The Company
intends for the award of Options under the 2005 Option Plan to comply with
the requirement for an exception to Section 162(m) of the Code applicable
to stock option plans so that the amount of the Company's deduction for
compensation related to the exercise of Options would not be limited by
Section 162(m) of the Code.
Accounting Treatment. Common Stock issuable pursuant to outstanding
Options under the Option Plan will be considered outstanding for purposes of
calculating earnings per share on a diluted basis. The Financial Accounting
Standards Board has announced a change in the required accounting methods
applicable to stock options effective after June 15, 2005. Under such accounting
requirements, the Company will be required to recognize compensation expense
related to stock options outstanding based upon the fair value of such awards at
the date of grant over the period that such awards are earned.
Stockholder Approval. Stockholder approval of the 2005 Option Plan is
being sought in accordance with OTS regulations. Additional purposes of
requesting stockholder approval of the 2005 Option Plan are to qualify the 2005
Option Plan for the granting of Incentive Stock Options in accordance with the
Code, to enable Optionees to qualify for certain exempt transactions related to
the short-swing profit recapture provisions of Section 16(b) of the Exchange
Act, and to meet the requirements for the tax- deductibility of certain
compensation items under Section 162(m) of the Code.
The affirmative vote of both: (a) a majority of the votes eligible to
be cast at the Meeting including votes cast by American Savings, MHC and (b) a
majority of the votes cast at the Meeting by stockholders other than American
Savings MHC (without regard to either (i) broker non-votes or (ii) proxies
marked "ABSTAIN") is required for the approval of the 2005 Option Plan. Broker
non-votes and proxies marked "ABSTAIN" shall have no effect on the outcome of
the votes on the 2005 Option Plan. The OTS does not endorse or approve the 2005
Option Plan in any way.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 2005
OPTION PLAN.
-18-
- --------------------------------------------------------------------------------
PROPOSAL III - APPROVAL OF AMERICAN SAVINGS BANK OF NJ
2005 RESTRICTED STOCK PLAN
- --------------------------------------------------------------------------------
General. The Board of Directors has adopted the American Savings Bank
of NJ 2005 Restricted Stock Plan (the "2005 Restricted Stock Plan") as a method
of providing directors, officers, and employees of the Bank or its subsidiaries
with a proprietary interest in the Company in a manner designed to encourage
such persons to remain in the employment or service of the Company or its
subsidiaries. The Bank will contribute sufficient funds to the 2005 Restricted
Stock Plan to purchase Common Stock representing up to 108,868 shares of Common
Stock. The 2005 Restricted Stock Plan may purchase such shares in the open
market or from the Company from authorized but unissued shares of Common Stock
or treasury shares. All of the Common Stock to be purchased by the 2005
Restricted Stock Plan will be purchased at the Fair Market Value of such stock
on the date of purchase. Awards under the 2005 Restricted Stock Plan will be
made in recognition of expected future services to the Bank or its subsidiaries
by its directors, officers and employees responsible for implementation of the
policies adopted by the Board of Directors and as a means of providing a further
retention incentive. The following is a summary of the material features of the
2005 Restricted Stock Plan which is qualified in its entirety by reference to
the complete provisions of the 2005 Restricted Stock Plan which is attached
hereto as Appendix C.
Awards Under the Restricted Stock Plan. Benefits under the 2005
Restricted Stock Plan ("Plan Share Awards") may be granted at the sole
discretion of a committee comprised of not less than two directors who are not
employees of the Bank or its subsidiaries (the "2005 Restricted Stock Plan
Committee") appointed by the Board of Directors. The 2005 Restricted Stock Plan
is managed by trustees (the "2005 Restricted Stock Plan Trustees") who are
non-employee directors and who have the responsibility to invest all funds
contributed by the Bank to the trust created for the 2005 Restricted Stock Plan
(the "2005 Restricted Stock Plan Trust"). Unless the terms of the 2005
Restricted Stock Plan or the 2005 Restricted Stock Plan Committee specifies
otherwise, awards under the 2005 Restricted Stock Plan will be in the form of
restricted stock payable as the Plan Share Awards shall be earned and non-
forfeitable. Twenty percent (20%) of such awards shall be earned and
non-forfeitable on the one year anniversary of the date of the grant of such
awards, and 20% annually thereafter on the anniversary of the date of the grant,
provided that the recipient of the award remains an employee, director or
director emeritus during such period. A recipient of such restricted stock will
not be entitled to voting rights associated with such shares prior to the
applicable date such shares are earned. Dividends paid on Plan Share Awards
shall be paid to the recipient as compensation within 30 days of the applicable
dividend payment date. Any shares held by the 2005 Restricted Stock Plan Trust
which are not yet earned shall be voted by the 2005 Restricted Stock Plan
Trustees, as directed by the 2005 Restricted Stock Plan Committee. If a
recipient of such restricted stock terminates employment or service for reasons
other than death, disability or a Change in Control of the Company or the Bank,
the recipient forfeits all rights to the awards under restriction. If the
recipient's termination of employment or service is caused by death, disability
or a Change in Control of the Company or the Bank, all restrictions expire and
all shares allocated shall become unrestricted. Plan Share Awards to directors
shall be immediately non-forfeitable in the event of the death, disability or a
Change in Control of the Company or the Bank, of such director and distributed
as soon as practicable thereafter. The Board of Directors can terminate the 2005
Restricted Stock Plan at any time, and if it does so, any shares not allocated
will revert to the Bank.
Plan Share Awards under the 2005 Restricted Stock Plan will be
determined by the 2005 Restricted Stock Plan Committee. In no event shall any
employee receive Plan Share Awards in excess of 25% of the aggregate Common
Stock authorized under the 2005 Restricted Stock Plan ("Plan Share Reserve").
Plan Share Awards may be granted to newly elected or appointed non-employee
directors subsequent to
-19-
the effective date of the 2005 Restricted Stock Plan, provided that the Plan
Share Awards made to non- employee directors shall not exceed 36% of the Plan
Share Reserve in the aggregate or 6% of the total Plan Share Reserve to any
individual non-employee director.
The aggregate number of Plan Shares available for issuance pursuant to
the Plan Share Awards and the number of shares to which any Plan Share Award
relates shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
effective date of the 2005 Restricted Stock Plan, resulting from any split,
subdivision or consolidation of the Common Stock or other capital adjustment,
change or exchange of Common Stock, or other increase or decrease in the number
or kind of shares effected without receipt or payment of consideration by the
Company.
The following table presents information related to the anticipated
award of Common Stock under the 2005 Restricted Stock Plan as authorized
pursuant to the terms of the 2005 Restricted Stock Plan or the anticipated
actions of the 2005 Restricted Stock Plan Committee; provided, however, that a
letter of non-objection must be received from the Office of Thrift Supervision
in order to permit non-employee directors to receive in the aggregate more than
30% of the total shares reserved under the plan and more than 5% individually.
If the non-objection of the Office of Thrift Supervision is not received, the
award of Common Stock under the 2005 Restricted Stock Plan to each non-employee
director will be reduced to meet such restriction. No Plan Share Awards are
expected to be granted to any associates of executive officers, directors or
nominees.
NEW PLAN BENEFITS
RESTRICTED STOCK PLAN
---------------------
Number of Shares
Name and Position Dollar Value ($)(1) to be Granted (2)
- ----------------- ------------------- -----------------
W. George Parker, Chairman $109,411 6,532
Joseph Kliminski, President, Chief Executive Officer $437,644 26,128
and Director
Robert A. Gaccione, Director $109,411 6,532
H. Joseph North, Director $109,411 6,532
Stanley Obal, Director $109,411 6,532(3)
Vincent S. Rospond, Director $109,411 6,532(3)
James H. Ward, III, Vice Chairman $109,411 6,532
Richard M. Bzdek, Executive Vice President, $218,822 13,064
Chief Operating Officer and Secretary
Eric B. Heyer, Senior Vice President $200,581 11,975
and Chief Financial Officer
Executive Group (3 persons) $857,047 51,167
Non-Executive Director Group (6 persons) $656,466 39,192
Non-Executive Officer Employee Group (3 persons) $310,026 18,509
- ----------------------
(1) These values are based on the last reported sales price of the Common Stock
on December 16, 2004, which was $16.75 per share. The exact dollar value of
the Common Stock granted will equal the market price of the Common Stock on
the date of vesting of such awards.
(2) All Plan Share Awards presented herein shall be earned at a rate of 20% on
the one year anniversary of the date of the award and 20% annually
thereafter on the anniversary of the date of the award. All awards shall
become immediately 100% vested upon death or disability or termination of
service following a change in control of the Company or the Bank (as
defined in the plan). Plan Share Awards shall continue to vest during
periods of service as an employee, director, or director emeritus.
(3) Nominee for election as a director of the Company.
-20-
Amendment and Termination of the Restricted Stock Plan. The Board may
amend or terminate the 2005 Restricted Stock Plan at any time. However, no
action of the Board may increase the maximum number of Plan Shares permitted to
be awarded under the 2005 Restricted Stock Plan, except for adjustments in the
Common Stock of the Company, materially increase the benefits accruing to
Participants under the 2005 Restricted Stock Plan or materially modify the
requirements for eligibility for participation in the 2005 Restricted Stock Plan
unless such action of the Board shall be subject to approval by the stockholders
of the Company.
Possible Dilutive Effects of the Restricted Stock Plan. It is the
Bank's present intention to fund the 2005 Restricted Stock Plan through
open-market purchases of Common Stock, which will cause no dilutive effect. The
2005 Restricted Stock Plan provides, however, that Common Stock to be awarded
may be acquired by the 2005 Restricted Stock Plan through open-market purchases
or from authorized but unissued shares of Common Stock from the Company. In that
stockholders do not have preemptive rights, to the extent that authorized but
unissued shares are utilized to fund Plan Share Awards, the interests of current
stockholders may be diluted. If all Plan Share Awards (i.e., 108,868 shares of
Common Stock) are funded with newly issued shares, the dilutive effect to
existing stockholders would be approximately 1.92%.
Federal Income Tax Consequences. Common Stock awarded under the 2005
Restricted Stock Plan is generally taxable to the recipient at the time that
such awards become earned and non-forfeitable, based upon the Fair Market Value
of such stock at the time of such vesting. Alternatively, a recipient may make
an election pursuant to Section 83(b) of the Code within 30 days of the date of
the transfer of such Plan Share Award to elect to include in gross income for
the current taxable year the Fair Market Value of such award. Such election must
be filed with the Internal Revenue Service within 30 days of the date of the
transfer of the stock award. The Bank will be allowed a tax deduction for
federal tax purposes as a compensation expense equal to the amount of ordinary
income recognized by a recipient of Plan Share Awards at the time the recipient
recognizes taxable ordinary income. A recipient of a Plan Share Award may elect
to have a portion of such award withheld by the 2005 Restricted Stock Plan Trust
in order to meet any necessary tax withholding obligations.
Accounting Treatment. For accounting purposes, the Bank will recognize
compensation expense for Common Stock subject to Plan Share Awards over the
vesting period at the fair market value of the shares on the date they are
awarded.
Stockholder Approval. The Company is submitting the 2005 Restricted
Stock Plan to stockholders for approval in accordance with OTS regulations. The
2005 Restricted Stock Plan and awards made thereunder will not be effective
until receipt of stockholder approval of Proposal III. Additionally, stockholder
approval of the 2005 Restricted Stock Plan will enable recipients of Plan Share
Awards to qualify for certain exemptive treatment from the short-swing profit
recapture provisions of Section 16(b) of the Exchange Act.
The affirmative vote of both: (a) a majority of the votes eligible to
be cast at the Meeting including votes cast by American Savings, MHC and (b) a
majority of the votes cast at the Meeting by stockholders other than American
Savings MHC (without regard to either (i) broker non-votes or (ii) proxies
marked "ABSTAIN") is required for the approval of the 2005 Restricted Stock
Plan. Broker non-votes and proxies marked "ABSTAIN" shall have no effect on the
outcome of the votes on the 2005 Restricted Stock Plan. The OTS does not endorse
or approve the 2005 Restricted Stock Plan in any way.
-21-
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF
THE RESTRICTED STOCK PLAN.
- --------------------------------------------------------------------------------
PROPOSAL IV - RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors of the Company has appointed Crowe Chizek and
Company LLC as the Company's independent auditor for the fiscal year ending
September 30, 2005, subject to ratification by the Company's stockholders. A
representative of Crowe Chizek and Company LLC is expected to be present at the
Meeting, will have the opportunity to make a statement if he so desires, and is
expected to be available to respond to appropriate questions.
Ratification of the appointment of the auditors requires the
affirmative vote of a majority of the votes cast, in person or by proxy, by the
stockholders of the Company at the Meeting. The Board of Directors recommends
that stockholders vote "FOR" the ratification of the appointment of Crowe Chizek
and Company LLC as the Company's auditors for the 2005 fiscal year.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
Under the Company's bylaws, stockholder proposals that are not included
in the Company's proxy statement for the annual meeting, will only be considered
at such meeting if the stockholder submits notice of the proposal to the Company
at the above address by at least five days before the date of the annual
meeting. Stockholder proposals must meet other applicable criteria as set forth
in the Company's bylaws in order to be considered at the annual meeting.
In order to be considered for inclusion in the Company's proxy
materials for the annual meeting of stockholders to be held in 2006, all
stockholder proposals must be received at the Company's executive office at 365
Broad Street, Bloomfield, New Jersey 07003 by August 19, 2005. Stockholder
proposals must meet other applicable criteria as set forth in the Company's
bylaws in order to be considered for inclusion in the Company's proxy materials.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any other matters to come before
the Meeting. However, if any other matters should properly come before the
Meeting or any adjournments, it is intended that proxies in the accompanying
form will be voted in respect thereof in accordance with the judgment of the
persons named in the accompanying proxy.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Common Stock. In addition to solicitations by
mail, directors, officers, and regular employees of the Company may solicit
proxies personally or by telephone without additional compensation. The Company
has engaged D.F. King to act as a proxy
-22-
solicitor in connection with the Meeting; and the anticipated cost of this
engagement is approximately $25,000.
- --------------------------------------------------------------------------------
FORM 10-KSB
- --------------------------------------------------------------------------------
A copy of the Company's annual report on Form 10-KSB for the fiscal
year ended September 30, 2004 will be furnished without charge to stockholders
as of the Record Date upon written request to the Secretary, ASB Holding
Company, 365 Broad Street, Bloomfield, New Jersey 07003.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Richard M. Bzdek
Richard M. Bzdek
Secretary
-23-
APPENDIX A
ASB HOLDING COMPANY
NOMINATING COMMITTEE CHARTER
This Nominating Committee Charter has been adopted by the Board of
Directors of ASB Holding Company (the "Company"). The Nominating Committee of
the Board shall review and reassess this charter annually and recommend any
proposed changes to the Board for approval.
Statement of Purpose
The Committee's purpose is to seek and recommend qualified persons for
the Board's approval as the Board's nominees for election or appointment to the
Company's Board of Directors. The Committee may also have such other duties as
may from time to time be assigned to it by the Board.
Membership
The membership of the Committee shall consist of at least three
directors, whose directorships are not up for election at the next annual
meeting of stockholders of the Company and who are independent directors.
Applicable laws and regulations, including the regulations of the Nasdaq Stock
Market, as they may be amended from time to time, will be followed in evaluating
a director's independence. The Chairman of the Board of Directors shall annually
appoint the directors to serve on the Committee.
One member of the Committee shall be appointed as chair. The chair
shall be responsible for leadership of the Committee, including scheduling and
presiding over meetings, preparing agendas, and making regular reports to the
Board.
Responsibilities
Although the Committee may consider other duties from time to time, the
general recurring activities of the Committee in carrying out its nominating
function are described below. The responsibilities of the Committee shall
include, but not be limited to:
1. Identify, recruit and interview qualified individuals to be
the Board's nominees for election or appointment to the Board
of Directors.
2. Annually present to the Board the names of individuals
recommended for selection by the Board as the Board's
nominees.
3. Annually review and make recommendations about changes to the
charter of the Nominating Committee.
4. Any other duties or responsibilities expressly delegated to
the Committee by the Board from time to time.
Nomination/Appointment Policy
The Committee believes that it is in the best interest of the Company
and its shareholders to obtain highly-qualified persons to serve as members of
the Board of Directors. The Committee will seek nominees with excellent
decision-making ability, business experience, personal integrity and reputation
A-1
who are knowledgeable about the business activities and market areas in which
the Company and its subsidiaries engage.
The Committee's process for identifying and evaluating potential
nominees will include soliciting recommendations from directors and officers of
the Company and its wholly-owned subsidiary, American Savings Bank of NJ.
Additionally, the Committee will consider persons recommended by shareholders of
the Company. The Committee will evaluate persons recommended by directors or
officers of the Company or American Savings Bank of NJ and persons recommended
by shareholders in the same manner.
To be considered in the Committee's selection of its nominees,
recommendations from shareholders must be received by the Company in writing by
at least 120 days prior to the date the proxy statement for the previous year's
annual meeting was first distributed to shareholders. Recommendations should
identify the submitting shareholder, the person recommended for consideration
and the reasons the submitting shareholder believes such person should be
considered.
Nomination Procedure
Except in the case of a nominee substituted as a result of the death or
other incapacity of a management nominee, the Committee shall deliver written
nominations to the Secretary of the Company at least 20 days prior to the date
of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the Company's subsidiary bank.
No nominations for directors except those made by the Committee shall
be voted upon at the annual meeting unless other nominations by shareholders are
made in writing and delivered to the Secretary of the Company at least five days
prior to the date of the annual meeting. Nominations made by shareholders must
also be accompanied by a certification, under oath before a notary public, by
each nominee that he meets the eligibility requirements to be a director as set
forth in Article III of the Company's Bylaws. Upon delivery, such nominations
shall be posted in a conspicuous place in each office of the Company's
subsidiary bank.
Ballots bearing the names of all persons nominated by the Committee and
by shareholders shall be provided for use at the annual meeting. However, if the
Committee shall fail or refuse to act at least 20 days prior to the annual
meeting, nominations for directors may be made at the annual meeting by any
shareholder entitled to vote and shall be voted upon.
Resources and Authority
The Committee shall have the resources and authority appropriate to
discharge its duties and responsibilities, including the authority to select,
retain, terminate and approve the fees and other retention terms of special
counsel and other experts or consultants as it deems appropriate, without
seeking approval of the Board or management. With respect to consultants or
search firms used to identify director nominees, this authority shall be vested
solely in the Committee.
Meetings and Reports
The Committee shall meet as frequently as the Committee considers
necessary and no less than once a year. The Committee shall keep regular minutes
of its meetings and shall cause them to be recorded in books kept for that
purpose in the office of the Company.
A-2
Publication of Charter
Pursuant to the rules of the Securities and Exchange Commission
promulgated under the Securities Exchange Act of 1934, as amended, a copy of
this charter shall be attached as an appendix to the Company's annual meeting
proxy statement at least once every three fiscal years.
A-3
APPENDIX B
ASB HOLDING COMPANY.
2005 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The Plan shall be known as the ASB HOLDING COMPANY
-------------------
("Company") 2005 Stock Option Plan (the "Plan"). The purpose of the Plan is to
attract and retain qualified personnel for positions of substantial
responsibility and to provide additional incentive to officers, directors,
employees and other persons providing services to the Company, or any present or
future parent or subsidiary of the Company to promote the success of the
business. The Plan is intended to provide for the grant of "Incentive Stock
Options," within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and Non-Incentive Stock Options, options that do
not so qualify. The provisions of the Plan relating to Incentive Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.
2. DEFINITIONS. The following words and phrases when used in this Plan with
-----------
an initial capital letter, unless the context clearly indicates otherwise, shall
have the meaning as set forth below. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural.
"Award" means the grant by the Committee of an Incentive Stock Option or a
Non-Incentive Stock Option, or any combination thereof, as provided in the Plan.
"Bank" shall mean American Savings Bank of NJ, or any successor corporation
thereto.
"Board" shall mean the Board of Directors of the Company, or any successor
or parent corporation thereto.
"Change in Control" shall mean: (i) the sale of all, or a material portion,
of the assets of the Company or its Subsidiaries; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, 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 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 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 Company stock,
or the purchase of shares of up to 25% of any class of securities of the Company
by a tax-qualified employee stock benefit plan which is exempt from the approval
requirements, set forth under 12 C.F.R. Section 574.3(c)(1)(vii) as now in
effect or as may hereafter be amended. 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. A Change in Control shall not include a
transaction whereby the MHC shall merge into the Company or the Bank and a new
Parent of the Company or the Bank is formed.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"Committee" shall mean the Board or the Stock Option Committee appointed by
the Board in accordance with Section 5(a) of the Plan.
B-1
"Common Stock" shall mean common stock of the Company, or any successor or
parent corporation thereto.
"Company" shall mean the ASB HOLDING COMPANY, the parent corporation of the
Bank, or any successor or Parent thereof.
"Continuous Employment" or "Continuous Status as an Employee" shall mean
the absence of any interruption or termination of employment with the Company or
any present or future Parent or Subsidiary of the Company. Employment shall not
be considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Company or in the case of transfers between
payroll locations, of the Company or between the Company, its Parent, its
Subsidiaries or a successor.
"Director" shall mean a member of the Board of the Company, or any
successor or parent corporation thereto.
"Director Emeritus" shall mean a person serving as a director emeritus,
advisory director, consulting director or other similar position as may be
appointed by the Board of Directors of the Bank or the Company from time to
time.
"Disability" means (a) with respect to Incentive Stock Options, the
"permanent and total disability" of the Employee as such term is defined at
Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive Stock
Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Bank or the Parent
in his then current capacity as determined by the Committee.
"Effective Date" shall mean the date of approval of the Plan by the
stockholders of the Company.
"Employee" shall mean any person employed by the Company or any present or
future Parent or Subsidiary of the Company.
"Fair Market Value" shall mean: (i) if the Common Stock is traded otherwise
than on a national securities exchange, then the Fair Market Value per Share
shall be equal to the mean between the last bid and ask price of such Common
Stock on such date or, if there is no bid and ask price on said date, then on
the immediately prior business day on which there was a bid and ask price. If no
such bid and ask price is available, then the Fair Market Value shall be
determined by the Committee in good faith; or (ii) if the Common Stock is listed
on a national securities exchange, including the Nasdaq National Market, then
the Fair Market Value per Share shall be not less than the average of the
highest and lowest selling price of such Common Stock on such exchange on such
date, or if there were no sales on said date, then the Fair Market Value shall
be not less than the mean between the last bid and ask price on such date. If no
such bid and ask price is available, then the Fair Market Value shall be
determined by the Committee in good faith.
"Incentive Stock Option" or "ISO" shall mean an option to purchase Shares
granted by the Committee pursuant to Section 8 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify as
an incentive stock option under Section 422 of the Code.
B-2
"MHC" shall mean American Savings, MHC, the mutual holding company of the
Bank.
"Non-Incentive Stock Option" or "Non-ISO" shall mean an option to purchase
Shares granted pursuant to Section 9 hereof, which option is not intended to
qualify under Section 422 of the Code.
"Option" shall mean an Incentive Stock Option or Non-Incentive Stock Option
granted pursuant to this Plan providing the holder of such Option with the right
to purchase Common Stock.
"Optioned Stock" shall mean stock subject to an Option granted pursuant to
the Plan.
"Optionee" shall mean any person who receives an Option or Award pursuant
to the Plan.
"Parent" shall mean any present or future corporation which would be a
"parent corporation" of the Bank or the Company as defined in Sections 424(e)
and (g) of the Code.
"Participant" means any Director, officer or Employee of the Company or any
Parent or Subsidiary of the Company or any other person providing a service to
the Company who is selected by the Committee to receive an Award, or who by the
express terms of the Plan is granted an Award.
"Plan" shall mean the ASB Holding Company 2005 Stock Option Plan.
"Share" shall mean one share of the Common Stock.
"Subsidiary" shall mean any present or future corporation which constitutes
a "subsidiary corporation" of the Company as defined in Sections 424(f) and (g)
of the Code, including the Bank.
3. SHARES SUBJECT TO THE PLAN. Except as otherwise required by the
-----------------------------
provisions of Section 13 hereof, the aggregate number of Shares which may be
issued pursuant to the Plan with respect to Awards made thereunder shall not
exceed 272,171 Shares ("Share Limit"). The aggregate number of Shares that may
be issued upon the exercise of Incentive Stock Options under the Plan shall not
exceed this Share Limit. Such Shares may either be from authorized but unissued
shares, treasury shares or shares purchased in the market for Plan purposes. If
an Award shall expire, become unexercisable, or be forfeited for any reason
prior to its exercise, new Awards may be granted under the Plan with respect to
the number of Shares as to which such expiration has occurred.
4. SIX MONTH HOLDING PERIOD. Subject to vesting requirements, if
---------------------------
applicable, except in the event of death or Disability of the Optionee or a
Change in Control of the Company, a minimum of six months must elapse between
the date of the grant of an Option and the date of the sale of the Common Stock
received through the exercise of such Option.
5. ADMINISTRATION OF THE PLAN.
--------------------------
(a) COMPOSITION OF THE COMMITTEE. The Plan shall be administered by
----------------------------
the Board of Directors of the Company or a Committee which shall consist of not
less than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons designated as members of the Committee shall
meet the requirements of a "Non-Employee Director" within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, as found at 17
C.F.R. Section 240.16b-3.
B-3
(b) POWERS OF THE COMMITTEE. The Committee is authorized (but only to
-----------------------
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
The President of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute written agreements
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option, the expiration date of
such Options, and such other terms and restrictions applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.
(c) EFFECT OF COMMITTEE'S DECISION. All decisions, determinations and
------------------------------
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. ELIGIBILITY FOR AWARDS AND LIMITATIONS.
--------------------------------------
(a) The Committee shall from time to time determine the Participants
who shall be granted Awards under the Plan, the number of Awards to be granted
to each such Participant, and whether Awards granted to each such Participant
under the Plan shall be Incentive and/or Non-Incentive Stock Options. In
selecting Participants and in determining the number of Shares of Common Stock
to be granted to each such Participant, the Committee may consider the nature of
the prior and anticipated future services rendered by each such Participant,
each such Participant's current and potential contribution to the Company and
such other factors as the Committee may, in its sole discretion, deem relevant.
Participants who have been granted an Award may, if otherwise eligible, be
granted additional Awards.
(b) The aggregate Fair Market Value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by each Employee during any calendar year
(under all Incentive Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future Parent or Subsidiary of the Company)
shall not exceed $100,000. Notwithstanding the prior provisions of this Section
6, the Committee may grant Options in excess of the foregoing limitations,
provided said Options shall be clearly and specifically designated as not being
Incentive Stock Options.
(c) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 34.5%
of the total number of Shares authorized for delivery under this Plan pursuant
to Section 3 herein or more than 5.75% to any individual non-employee Director;
provided, however, that if a letter of non-objection for the Plan is not
received from the Office of Thrift Supervision, Shares subject to Options
granted to non-employee Directors in the aggregate under this Plan will be
limited to 30% of the total number of Shares authorized for delivery under this
Plan pursuant to Section 3 herein or 5% to any individual non-employee Director.
In no event shall Shares subject to Options granted to any Employee exceed more
than 25% of the total number of Shares authorized for delivery under the Plan.
B-4
7. TERM OF THE PLAN. The Plan shall continue in effect for a term of ten
----------------
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof. No Option shall be granted under the Plan after ten (10) years from
the Effective Date.
8. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Incentive Stock Options
-----------------------------------------------
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) OPTION PRICE.
(i) The price per Share at which each Incentive Stock Option
granted by the Committee under the Plan may be exercised shall not, as to any
particular Incentive Stock Option, be less than the Fair Market Value of the
Common Stock on the date that such Incentive Stock Option is granted.
(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time the Incentive Stock Option is granted, the Incentive Stock Option exercise
price shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of the Common Stock on the date that the Incentive Stock Option is
granted.
(b) PAYMENT. Full payment for each Share of Common Stock purchased
upon the exercise of any Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price must have been owned by the party exercising such Option for not
less than six months prior to the date of exercise of such Option, and such
Common Stock shall be valued at the Fair Market Value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment has been received by the Company, and no Optionee shall have
any of the rights of a stockholder of the Company until Shares of Common Stock
are issued to the Optionee.
(c) TERM OF INCENTIVE STOCK OPTION. The term of exercisability of each
Incentive Stock Option granted pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive Stock Option is granted, provided
that in the case of an Employee who owns stock representing more than ten
percent (10%) of the Common Stock outstanding at the time the Incentive Stock
Option is granted, the term of exercisability of the Incentive Stock Option
shall not exceed five (5) years.
(d) EXERCISE GENERALLY. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company at all times during the period beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3) months prior to the date of exercise of any such Incentive Stock
Option. The Committee may impose additional conditions upon the right of an
Optionee to exercise any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by action of the Committee at the time of the grant of the Options, the
Options will be first exercisable at the rate of 20% on the one year anniversary
of the date of grant and 20% annually thereafter during such periods of service
as an Employee, Director or Director Emeritus.
B-5
(e) CASHLESS EXERCISE. Subject to vesting requirements, if applicable,
an Optionee who has held an Incentive Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee gives the Company written notice of the exercise of the Option together
with an order to a registered broker-dealer or equivalent third party, to sell
part or all of the Optioned Stock and to deliver enough of the proceeds to the
Company to pay the Option exercise price and any applicable withholding taxes.
If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company. The Option shall not be deemed exercised until
the Company has received full payment for the exercise price of such Option.
(f) TRANSFERABILITY. An Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. TERMS AND CONDITIONS OF NON-INCENTIVE STOCK OPTIONS. Each Non-Incentive
---------------------------------------------------
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Non-Incentive
Stock Option granted pursuant to the Plan shall comply with and be subject to
the following terms and conditions.
(a) OPTIONS GRANTED TO DIRECTORS. Subject to the limitations of
Section 6(c), Non- Incentive Stock Options to purchase 16,330 shares of Common
Stock will be granted to each Director who is not an Employee as of the
Effective Date, at an exercise price equal to the Fair Market Value of the
Common Stock on such date of grant. The Options will be first exercisable at the
rate of 20% on the one year anniversary of the Effective Date and 20% annually
thereafter during such periods of service as a Director or Director Emeritus.
Upon the death or Disability of the Director or Director Emeritus, such Option
shall be deemed immediately 100% exercisable. Such Options shall continue to be
exercisable for a period of ten years following the date of grant without regard
to the continued services of such Director as a Director or Director Emeritus.
In the event of the Optionee's death, such Options may be exercised by the
personal representative of his estate or person or persons to whom his rights
under such Option shall have passed by will or by the laws of descent and
distribution. Options may be granted to newly appointed or elected non-employee
Directors within the sole discretion of the Committee. The exercise price per
Share of such Options granted shall be equal to the Fair Market Value of the
Common Stock at the time such Options are granted. All outstanding Awards shall
become immediately exercisable in the event of a Change in Control of the Bank
or the Company. Unless otherwise inapplicable, or inconsistent with the
provisions of this paragraph, the Options to be granted to Directors hereunder
shall be subject to all other provisions of this Plan.
(b) OPTION PRICE. The exercise price per Share of Common Stock for
each Non-Incentive Stock Option granted pursuant to the Plan shall be at such
price as the Committee may determine in its sole discretion, but in no event
less than the Fair Market Value of such Common Stock on the date of grant as
determined by the Committee in good faith.
(c) PAYMENT. Full payment for each Share of Common Stock purchased
upon the exercise of any Non-Incentive Stock Option granted under the Plan shall
be made at the time of exercise of each such Non-Incentive Stock Option and
shall be paid in cash (in United States Dollars), Common Stock or a combination
of cash and Common Stock. Common Stock utilized in full or partial payment of
the exercise price must have been owned by the party exercising such Option for
not less than six months prior to the date of exercise of such Option, and such
Common Stock shall be valued at the Fair Market
B-6
Value at the date of exercise. The Company shall accept full or partial payment
in Common Stock only to the extent permitted by applicable law. No Shares of
Common Stock shall be issued until full payment has been received by the Company
and no Optionee shall have any of the rights of a stockholder of the Company
until the Shares of Common Stock are issued to the Optionee.
(d) TERM. The term of exercisability of each Non-Incentive Stock
Option granted pursuant to the Plan shall be not more than ten (10) years from
the date each such Non-Incentive Stock Option is granted.
(e) EXERCISE GENERALLY. The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan. Except
as otherwise provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options, the Options will be first exercisable at
the rate of 20% on the one year anniversary of the date of grant and 20%
annually thereafter during such periods of service as an Employee, Director or
Director Emeritus.
(f) CASHLESS EXERCISE. Subject to vesting requirements, if applicable,
an Optionee who has held a Non-Incentive Stock Option for at least six months
may engage in the "cashless exercise" of the Option. Upon a cashless exercise,
an Optionee gives the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company. Such Option shall not be deemed exercised
until the Company has received full payment for the exercise price of such
Option.
(g) TRANSFERABILITY. Any Non-Incentive Stock Option granted pursuant
to the Plan shall be exercised during an Optionee's lifetime only by the
Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
10. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH ON INCENTIVE
-----------------------------------------------------------------------
STOCK OPTIONS.
-------------
(a) TERMINATION OF EMPLOYMENT. In the event that any Optionee's
employment with the Company shall terminate for any reason, other than
Disability or death, all of any such Optionee's Incentive Stock Options, and all
of any such Optionee's rights to purchase or receive Shares of Common Stock
pursuant thereto, shall automatically terminate on (A) the earlier of (i) or
(ii): (i) the respective expiration dates of any such Incentive Stock Options,
or (ii) the expiration of not more than three (3) months after the date of such
termination of employment; or (B) at such later date as is determined by the
Committee at the time of the grant of such Award based upon the Optionee's
continuing status as a Director or Director Emeritus of the Bank or the Company,
but only if, and to the extent that, the Optionee was entitled to exercise any
such Incentive Stock Options at the date of such termination of employment, and
further that such Award shall thereafter be deemed a Non-Incentive Stock Option.
In the event that a Subsidiary ceases to be a Subsidiary of the Company, the
employment of all of its employees who are not immediately thereafter employees
of the Company shall be deemed to terminate upon the date such Subsidiary so
ceases to be a Subsidiary of the Company.
B-7
(b) DISABILITY. In the event that any Optionee's employment with the
Company shall terminate as the result of the Disability of such Optionee, such
Optionee may exercise any Incentive Stock Options granted to the Optionee
pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) DEATH. In the event of the death of an Optionee, any Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time. At the discretion of the Committee, upon
exercise of such Options the Optionee may receive Shares or cash or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the difference between the Fair Market Value of such Shares and the
exercise price of such Options on the exercise date.
(d) INCENTIVE STOCK OPTIONS DEEMED EXERCISABLE. For purposes of
Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
(e) TERMINATION OF INCENTIVE STOCK OPTIONS. Except as may be specified
by the Committee at the time of grant of an Option, to the extent that any
Incentive Stock Option granted under the Plan to any Optionee whose employment
with the Company terminates shall not have been exercised within the applicable
period set forth in this Section 10, any such Incentive Stock Option, and all
rights to purchase or receive Shares of Common Stock pursuant thereto, as the
case may be, shall terminate on the last day of the applicable period.
11. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH ON
----------------------------------------------------------------------
NON-INCENTIVE STOCK OPTIONS. The terms and conditions of Non-Incentive Stock
- ----------------------------
Options relating to the effect of the termination of an Optionee's employment or
service, Disability of an Optionee or his death shall be such terms and
conditions as the Committee shall, in its sole discretion, determine at the time
of termination of service, unless specifically provided for by the terms of the
Agreement at the time of grant of the award, and provided further that any such
terms and conditions may not be inconsistent with applicable regulations of the
Office of Thrift Supervision or other appropriate banking regulatory agency.
12. WITHHOLDING TAX. The Company shall have the right to deduct from all
----------------
amounts paid in cash with respect to the cashless exercise of Options any taxes
required by law to be withheld with respect to such cash payments. Where a
Participant or other person is entitled to receive Shares pursuant to the
exercise of an Option, the Company shall have the right to require the
Participant or such other person to pay the Company the amount of any taxes
which the Company is required to withhold with respect to such Shares, or, in
lieu thereof, to retain, or to sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
B-8
13. RECAPITALIZATION, MERGER, CONSOLIDATION, CHANGE IN CONTROL AND OTHER
-----------------------------------------------------------------------
TRANSACTIONS.
- ------------
(a) ADJUSTMENT. Subject to any required action by the stockholders of
the Company, within the sole discretion of the Committee, the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) CHANGE IN CONTROL. All outstanding Awards shall become immediately
exercisable in the event of a Change in Control of the Company or the Bank. In
the event of such a Change in Control, the Committee and the Board of Directors
will take one or more of the following actions to be effective as of the date of
such Change in Control:
(i) provide that such Options shall be assumed, or equivalent
options shall be substituted, ("Substitute Options") by the acquiring or
succeeding corporation (or an affiliate thereof), provided that: (A) any such
Substitute Options exchanged for Incentive Stock Options shall meet the
requirements of Section 424(a) of the Code, and (B) the shares of stock issuable
upon the exercise of such Substitute Options shall constitute securities
registered in accordance with the Securities Act of 1933, as amended, ("1933
Act") or such securities shall be exempt from such registration in accordance
with Sections 3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered
Securities"), or in the alternative, if the securities issuable upon the
exercise of such Substitute Options shall not constitute Registered Securities,
then the Optionee will receive upon the exercise of the Substitute Options a
cash payment for each Option surrendered equal to the difference between (1) the
Fair Market Value of the consideration to be received for each share of Common
Stock in the Change in Control transaction times the number of shares of Common
Stock subject to such surrendered Options, and (2) the aggregate exercise price
of all such surrendered Options, or
(ii) in the event of a transaction under the terms of which the
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment (the "Merger Price") for each share of Common Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such Options held by each
Optionee (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such surrendered Options in
exchange for such surrendered Options.
(c) EXTRAORDINARY CORPORATE ACTION. Notwithstanding any provisions of
the Plan to the contrary, subject to any required action by the stockholders of
the Company, in the event of any Change in Control, recapitalization, merger,
consolidation, exchange of Shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Committee, in its sole discretion, shall have the power, prior or
subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the Option exercise price per Share of Common Stock, and
the consideration to be given or received by the Company upon the exercise of
any outstanding Option;
B-9
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary, desirable, appropriate
or advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code without the consent of the
Optionee.
(d) ACCELERATION. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan;
provided that such action is not contrary to regulations of the OTS or other
appropriate banking regulatory agency then in effect.
(e) NON-RECURRING DIVIDENDS. Notwithstanding anything herein to the
contrary, upon the payment of a special or non-recurring dividend that has the
effect of a return of capital distribution to the stockholders, the Company
shall, within the discretion of the Committee, either:
(i) adjust the Option exercise price per share in a proportionate
and equitable manner to reflect the payment of such capital distribution, or
(ii) make an equivalent payment to each Participant holding an
outstanding Option as of the dividend record date of such dividend. Such payment
shall be made at substantially the same time, in substantially the same form and
in substantially the same amount per Optioned Stock as the dividend or other
distribution paid with respect to outstanding Shares; provided, however, that if
any dividend or distribution on outstanding Shares is paid in property other
than cash, the Company, in the Committee's discretion, may make such payment in
a cash amount per Optioned Stock equal in fair market value to the fair market
value of the non-cash dividend or distribution; or
(iii) take the action described in Section 13(e)(i) with respect
to certain outstanding Options and the action described in Section 13(e)(ii)
with respect to the remaining outstanding Options.
Except as expressly provided in Sections 13(a) and 13(b), no Optionee
shall have any rights by reason of the occurrence of any of the events described
in this Section 13.
14. TIME OF GRANTING OPTIONS. The date of grant of an Option under the Plan
------------------------
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
15. EFFECTIVE DATE. The Plan shall become effective upon the date of
---------------
approval of the Plan by the stockholders of the Company, subject to approval or
non-objection by the Office of Thrift Supervision, if applicable. The Committee
may make a determination related to Awards prior to the Effective Date with such
Awards to be effective upon the date of stockholder approval of the Plan.
16. APPROVAL BY STOCKHOLDERS. The Plan shall be approved by an affirmative
------------------------
vote of a majority vote of the total votes eligible to be cast at a meeting of
stockholders of the Company held within twelve (12) months before or after the
date the Plan is approved by the Board.
B-10
17. MODIFICATION OF OPTIONS. At any time and from time to time, the Board
-----------------------
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on the Optionee by the grant of a new
Option at such time, or shall not materially decrease the Optionee's benefits
under the Option without the consent of the holder of the Option, except as
otherwise permitted under Section 18 hereof.
18. AMENDMENT AND TERMINATION OF THE PLAN.
-------------------------------------
(a) ACTION BY THE BOARD. The Board may alter, suspend or discontinue
the Plan, except that no action of the Board may increase (other than as
provided in Section 13 hereof) the maximum number of Shares permitted to be
issued under the Plan, materially increase the benefits accruing to Participants
under the Plan or materially modify the requirements for eligibility for
participation in the Plan unless such action of the Board shall be subject to
approval or ratification by the stockholders of the Company. Notwithstanding
anything herein to the contrary, in no event shall the Board or the Committee
amend the Plan or amend an Award under the Plan which allows the exercise price
of any Option granted under the Plan to be reduced after the date of grant,
except as otherwise permitted in accordance with Section 13 of the Plan, without
stockholder approval of such action.
(b) CHANGE IN APPLICABLE LAW. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule, regulation or policy which would make the exercise of all or part of any
previously granted Option unlawful or subject the Company to any penalty, the
Committee may restrict any such exercise without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.
19. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATIONS ON OPTION EXERCISE;
----------------------------------------------------------------------
CANCELLATION OF OPTION RIGHTS.
-----------------------------
(a) Shares shall not be issued with respect to any Option granted
under the Plan unless the issuance and delivery of such Shares shall comply with
all relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.
(c) As a condition to the exercise of an Option or the delivery of the
Shares, the Company may require the person exercising the Option or receiving
delivery of the Shares to make such representations and warranties as may be
necessary to assure the availability of an exemption from the registration
requirements of federal or state securities law.
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company or its
Subsidiaries for "cause" as defined at 12 C.F.R. 563.39(b)(1) as determined by
the Board of Directors or the Committee, all Options held by such Participant
shall cease to be exercisable as of the date of such termination of employment
or service.
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(e) Upon the exercise of an Option by an Optionee (or the Optionee's
personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the
delivery of shares of Common Stock. Such cash payment to be paid in lieu of
delivery of Common Stock shall be equal to the difference between the Fair
Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
(f) In the event that the Bank shall be deemed critically
undercapitalized (as defined at 12 C.F.R. Section 565.4), is subject to
enforcement action by the Office of Thrift Supervision, or receives a capital
directive under 12 C.F.R. Section 565.7, then all Options awarded to executive
officers or directors of the Company or its Subsidiaries must exercise such
options or forfeit such Options.
(g) Notwithstanding anything herein to the contrary, in no event shall
Shares be issued with respect to any Award to the extent that such issuance
would cause the MHC to fail to qualify as a mutual holding company under
applicable regulations.
20. RESERVATION OF SHARES. During the term of the Plan, the Company will
----------------------
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
21. UNSECURED OBLIGATION. No Participant under the Plan shall have any
---------------------
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
22. NO EMPLOYMENT RIGHTS. No Director, Employee or other person shall have
--------------------
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in administration of the Plan shall be construed
as giving any person any rights of employment or retention as an Employee,
Director, Director Emeritus or in any other capacity with the Company, the Bank
or other Subsidiaries.
23. GOVERNING LAW. The Plan shall be governed by and construed in
--------------
accordance with the laws of the State of New Jersey, except to the extent that
federal law shall be deemed to apply.
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APPENDIX C
AMERICAN SAVINGS BANK OF NJ
2005 RESTRICTED STOCK PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 American Savings Bank of NJ ("Bank") hereby establishes the Restricted
Stock Plan (the "Plan") and Trust (the "Trust") upon the terms and conditions
hereinafter stated in this Restricted Stock Plan and Trust Agreement (the
"Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and to retain personnel of
experience and ability in key positions of responsibility with the Bank and its
subsidiaries, by providing such personnel of the Bank and its subsidiaries with
an increased equity interest in the parent corporation of the Bank, ASB Holding
Company ("Parent"), as compensation for their prior and anticipated future
professional contributions and service to the Bank and its subsidiaries.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meaning as set forth below. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
"Bank" means American Savings Bank of NJ, a federal stock savings bank.
"Beneficiary" means the person or persons designated by the Participant to
receive any benefits payable under the Plan in the event of such Participant's
death. Such person or persons shall be designated in writing by the Participant
and addressed to the Bank or the Committee on forms provided for this purpose by
the Committee and delivered to the Bank and may be changed from time to time by
similar written notice to the Committee. A Participant's last will and testament
or any codicil thereto shall not constitute written designation of a
Beneficiary. In the absence of such written designation, the Beneficiary shall
be the Participant's surviving spouse, if any, or if none, the Participant's
estate.
"Board" means the Board of Directors of the Bank, or any successor
corporation thereto.
"Cause" means the personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profits, intentional failure to
perform stated duties, willful violation of a material
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provision of any law, rule or regulation (other than traffic violations and
similar offense), or a material violation of a final cease-and-desist order or
any other action which results in a substantial financial loss to the Bank or
its Subsidiaries.
"Change in Control" shall mean: (i) the sale of all, or a material portion,
of the assets of the Parent or the Bank; (ii) the merger or recapitalization of
the Parent or the Bank whereby the Parent or the Bank is not the surviving
entity; (iii) a change in control of the Parent or the Bank, as otherwise
defined or determined by the Office of Thrift Supervision ("OTS") 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 1934 Act and the rules and regulations promulgated thereunder) of
twenty-five percent (25%) or more of the outstanding voting securities of the
Parent by any person, trust, entity or group. This limitation shall not apply to
the purchase of shares of up to 25% of any class of securities of the Parent by
a tax-qualified employee stock benefit plan which is exempt from the approval
requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or
as may hereafter be amended. 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. A Change in Control shall not include a transaction
whereby the MHC shall merge with the Parent or the Bank and a new parent
corporation of the Parent or the Bank is formed.
"Committee" means the Board of Directors of the Parent or the Restricted
Stock Plan Committee appointed by the Board of Directors of the Parent pursuant
to Article IV hereof.
"Common Stock" means shares of the common stock of the Parent, or any
successor corporation or parent thereto.
"Conversion" means the effective date of the stock charter of the Bank and
simultaneous acquisition of all of the outstanding stock of the Bank by the
Parent.
"Director" means a member of the Board of the Bank.
"Director Emeritus" means a person serving as a director emeritus, advisory
director, consulting director, or other similar position as may be appointed by
the Board of Directors of the Parent or the Bank from time to time.
"Disability" means any physical or mental impairment which renders the
Participant incapable of continuing in the employment or service of the Bank or
any Subsidiary in his current capacity as determined by the Committee.
"Eligible Participant" means an Employee or Director who may receive a Plan
Share Award under the Plan.
"Employee" means any person who is employed by the Bank or a Subsidiary.
"Effective Date" shall mean the date of stockholder approval of the Plan by
the stockholders of the Parent.
"MHC" means American Savings, MHC, a federally-chartered mutual holding
company and majority shareholder of Parent.
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"Parent" means ASB Holding Company, and any successor corporation thereto.
"Participant" means an Employee or Director who receives a Plan Share Award
under the Plan.
"Plan Shares" means shares of Common Stock held in the Trust which are
awarded or issuable to a Participant pursuant to the Plan.
"Plan Share Award" or "Award" means a right granted to a Participant under
this Plan to earn or to receive Plan Shares.
"Plan Share Reserve" means the shares of Common Stock held by the Trust
pursuant to Sections 5.03 and 5.04.
"Subsidiary" means those subsidiaries of the Bank which, with the consent
of the Board, agree to participate in this Plan.
"Trustee" or "Trustee Committee" means that person(s) or entity nominated
by the Committee and approved by the Board pursuant to Sections 4.01 and 4.02 to
hold legal title to the Plan assets for the purposes set forth herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and interpreted
by the Board or the Committee appointed by said Board, which shall consist of
not less than two non-employee members of the Board of Directors of the Parent,
which shall have all of the powers allocated to it in this and other sections of
the Plan. All persons designated as members of the Committee shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("1934 Act"). The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding. The Committee shall act by
vote or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. The Committee shall report its actions and decisions with respect to
the Plan to the Board at appropriate times, but in no event less than one time
per calendar year. The Committee shall recommend to the Board one or more
persons or entity to act as Trustee in accordance with the provision of this
Plan and Trust and the terms of Article VIII hereof.
4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee shall
be appointed or approved by, and will serve at the pleasure of the Board. The
Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove, replace or add Trustees. The Board
shall have all of the powers allocated to it in this and other sections of the
Plan, may take any action under or with respect to the Plan which the Committee
is authorized to take, and may reverse or override any action taken or decision
made by the Committee under or with respect to the Plan, provided, however, that
the Board may not revoke any Plan Share Award already made except as provided in
Section 7.01(b) herein.
4.03 LIMITATION ON LIABILITY. No member of the Board, the Committee or the
Trustee shall be liable for any determination made in good faith with respect to
the Plan or any Plan Share Awards granted. If a member of the Board, Committee
or any Trustee is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by any reason of anything done or not done by
him in such capacity under
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or with respect to the Plan, the Bank shall indemnify such member against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in the best interests of the Bank and its
Subsidiaries and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board of Directors of the Bank
shall determine the amounts (or the method of computing the amounts) to be
contributed by the Bank to the Trust established under this Plan. Such
contribution amounts shall be paid to the Trustee at the time of contribution.
No contributions to the Trust by Participants shall be permitted except with
respect to amounts necessary to meet tax withholding obligations.
5.02 INITIAL INVESTMENT. Any funds held by the Trust prior to investment in
the Common Stock shall be invested by the Trustee in such interest-bearing
account or accounts at the Bank as the Trustee shall determine to be
appropriate.
5.03 INVESTMENT OF TRUST ASSETS. Following approval of the Plan by
stockholders of the Parent and receipt of any other necessary regulatory
approvals, the Trust shall purchase Common Stock of the Parent in an amount
equal to up to 100% of the Trust's cash assets, after providing for any required
withholding as needed for tax purposes, provided, however, that the Trust shall
not purchase more than 108,868 shares of Common Stock. The Trustee may purchase
shares of Common Stock in the open market or, in the alternative, may purchase
authorized but unissued shares of the Common Stock or treasury shares from the
Parent in an amount sufficient to fund the Plan Share Reserve.
5.04 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON PLAN SHARE
RESERVES. Upon the allocation of Plan Share Awards under Sections 6.02 and 6.05,
or the decision of the Committee to return Plan Shares to the Parent, the Plan
Share Reserve shall be reduced by the number of Shares subject to the Awards so
allocated or returned. Any Shares subject to an Award which are not earned
because of forfeiture by the Participant pursuant to Section 7.01 shall be added
to the Plan Share Reserve.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. Eligible Participants may receive Plan Share Awards
within the sole discretion of the Committee. Directors who are not otherwise
Employees shall receive Plan Share Awards pursuant to Section 6.05.
6.02 ALLOCATIONS. The Committee will determine which of the Eligible
Participants will be granted Plan Share Awards and the number of Shares covered
by each Award, provided, however, that in no event shall any Awards be made
which will violate the Articles of Incorporation or Bylaws of the Bank or its
Subsidiaries or any applicable federal or state law or regulation. In the event
Shares are forfeited for any reason or additional Shares are purchased by the
Trustee, the Committee may, from time to time, determine which of the Eligible
Participants will be granted Plan Share Awards to be awarded from forfeited
Shares. In selecting such Eligible Participants to whom Plan Share Awards will
be granted and the number of shares covered by such Awards, the Committee shall
consider the prior and anticipated future position, duties and responsibilities
of the Eligible Participants, the value of their prior and anticipated future
services to the Bank and its Subsidiaries, and any other factors the Committee
may deem
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relevant. All actions by the Committee shall be deemed final, except to the
extent that such actions are revoked by the Board. Notwithstanding anything
herein to the contrary, in no event shall any Participant receive Plan Share
Awards in excess of 25% of the aggregate Plan Shares authorized under the Plan.
6.03 FORM OF ALLOCATION. As promptly as practicable after a determination
is made pursuant to Section 6.02 or Section 6.05 that a Plan Share Award is to
be made, the Committee shall notify the Participant in writing of the grant of
the Award, the number of Plan Shares covered by the Award, and the terms upon
which the Plan Shares subject to the award may be earned. The date on which the
Committee makes its award determination or the date the Committee so notifies
the Participant shall be considered the date of grant of the Plan Share Awards
as determined by the Committee. The Committee shall maintain records as to all
grants of Plan Share Awards under the Plan.
6.04 ALLOCATIONS NOT REQUIRED. Notwithstanding anything to the contrary at
Sections 6.01, 6.02 or 6.05, no Eligible Participant shall have any right or
entitlement to receive a Plan Share Award hereunder, such Awards being at the
sole discretion of the Committee and the Board, nor shall the Eligible
Participant as a group have such a right. The Committee may, with the approval
of the Board (or, if so directed by the Board) return all Common Stock in the
Plan Share Reserve to the Bank at any time, and cease issuing Plan Share Awards.
6.05 AWARDS TO DIRECTORS. Subject to the limitations provided in this
Section 6.05, upon the Effective Date, a Plan Share Award consisting of 6,532
Plan Shares shall be awarded to each Director of the Bank that is not otherwise
an Employee. Such Plan Share Award shall be earned and non-forfeitable at the
rate of one-fifth as of the one-year anniversary of the Effective Date and an
additional one-fifth following each of the next four successive years during
such continued periods of service as a Director or Director Emeritus. Such Plan
Share Award shall be immediately 100% earned and non-forfeitable in the event of
the death or Disability of such Director or Director Emeritus. Such Plan Share
Award shall be immediately 100% earned and non-forfeitable upon a Change in
Control of the Parent or the Bank. Subsequent to the Effective Date, Plan Share
Awards may be awarded to newly elected or appointed Directors of the Bank by the
Committee. In no event shall total Plan Share Awards granted to non- employee
Directors of the Bank in the aggregate under this Plan exceed more than 36% of
the total Plan Share Reserve or more than 6% to any individual non-employee
Director; provided, however, that if a letter of non-objection for the Plan is
not received from the Office of Thrift Supervision, total Plan Share Awards
granted to non-employee Directors in the aggregate under this Plan will be
limited to 30% of the total Plan Share Reserve or 5% to any individual
non-employee Director.
ARTICLE VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNINGS PLAN SHARES; FORFEITURES.
(A) GENERAL RULES. Unless the Committee shall specifically state to the
contrary at the time a Plan Share Award is granted, Plan Shares subject to an
Award shall be earned and non-forfeitable by a Participant at the rate of
one-fifth of such Award following one year after the granting of such Award, and
an additional one-fifth following each of the next four successive years;
provided that such Participant remains an Employee, Director, or Director
Emeritus during such period.
(B) REVOCATION FOR MISCONDUCT. Notwithstanding anything herein to the
contrary, the Board shall, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been delivered thereunder to the
Participant, whether or not yet earned, in the case of a Participant who is
discharged from the employ or service of the Bank or a Subsidiary for Cause, or
who is discovered after termination of employment or
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service to have engaged in conduct that would have justified termination for
Cause. A determination of Cause shall be made by the Board within its sole
discretion.
(C) EXCEPTION FOR TERMINATIONS DUE TO DEATH OR DISABILITY. Notwithstanding
the general rule contained in Section 7.01(a) above, all Plan Shares subject to
a Plan Share Award held by a Participant whose employment or service with the
Bank or a Subsidiary terminates due to death or Disability, shall be deemed
earned and nonforfeitable as of the Participant's last date of employment or
service with the Bank or a Subsidiary and shall be distributed as soon as
practicable thereafter.
(D) EXCEPTION FOR TERMINATION AFTER A CHANGE IN CONTROL. Notwithstanding
the general rule contained in Section 7.01 above, all Plan Shares subject to a
Plan Share Award held by a Participant shall be deemed to be immediately 100%
earned and non-forfeitable in the event of a Change in Control of the Parent or
the Bank and shall be distributed as soon as practicable thereafter.
7.02 ACCRUAL AND PAYMENT OF DIVIDENDS. A holder of a Plan Share Award,
whether or not earned, shall also be entitled to receive an amount equal to any
cash dividends declared and paid with respect to shares of Common Stock
represented by such Plan Share Award between the date the relevant Plan Share
Award was granted to such Participant and the date the Plan Shares are
distributed. Such cash dividend amounts applicable to Plan Share Awards shall
constitute compensation that shall be paid by the Trust or the Bank to the
Participant within 30 days of the respective dividend payment date.
7.03 DISTRIBUTION OF PLAN SHARES.
(A) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except as provided in
Subsections (d) and (e) below, Plan Shares shall be distributed to the
Participant or his Beneficiary, as the case may be, as soon as practicable after
they have been earned. No fractional shares shall be distributed.
Notwithstanding anything herein to the contrary, at the discretion of the
Committee, Plan Shares may be distributed prior to such Shares being 100%
earned, provided that such Plan Shares shall contain a restrictive legend
detailing the applicable limitations of such shares with respect to transfer and
forfeiture.
(B) FORM OF DISTRIBUTION. All Plan Shares, together with any shares
representing stock dividends, shall be distributed in the form of Common Stock.
One share of Common Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be made in cash.
Notwithstanding anything within the Plan to the contrary, upon a Change in
Control whereby substantially all of the Common Stock of the Parent shall be
acquired for cash, all Plan Shares associated with such Plan Share Awards,
together with any shares representing stock dividends associated with such Plan
Share Awards, shall be, at the sole discretion of the Committee, distributed as
of the effective date of such Change in Control, or as soon as administratively
feasible thereafter, in the form of cash equal to the consideration received in
exchange for such Common Stock represented by such Plan Shares.
(C) WITHHOLDING. The Trustee may withhold from any payment or distribution
made under this Plan sufficient amounts of cash or shares of Common Stock
necessary to cover any applicable withholding and employment taxes, and if the
amount of such payment or distribution is not sufficient, the Trustee may
require the Participant or Beneficiary to pay to the Trustee the amount required
to be withheld in taxes as a condition of delivering the Plan Shares. The
Trustee shall pay over to the Bank or a Subsidiary which employs or employed
such Participant any such amount withheld from or paid by the Participant or
Beneficiary.
(D) TIMING: EXCEPTION FOR 10% SHAREHOLDERS. Notwithstanding Subsection (a)
above, no Plan Shares may be distributed prior to the date which is five years
from the effective date of the
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Conversion to the extent the Participant or Beneficiary, as the case may be,
would after receipt of such Shares own in excess of ten percent (10%) of the
issued and outstanding shares of Common Stock of the Parent, unless such action
is approved in advance by a majority vote of disinterested directors of the
Board of the Parent. Any Plan Shares remaining undistributed solely by reason of
the operation of this Subsection (d) shall be distributed to the Participant or
his Beneficiary on the date which is five years from the effective date of the
Conversion.
(E) REGULATORY EXCEPTIONS. No Plan Shares shall be distributed, however,
unless and until all of the requirements of all applicable law and regulation
shall have been fully complied with, including the receipt of approval of the
Plan by the stockholders of the Parent by such vote, if any, as may be required
by applicable law and regulations.
7.04 VOTING OF PLAN SHARES. After a Plan Share Award has become earned and
non-forfeitable, the Participant shall be entitled to direct the Trustee as to
the voting of the Plan Shares which are associated with the Plan Share Award and
which have not yet been distributed pursuant to Section 7.03, subject to rules
and procedures adopted by the Committee for this purpose. All shares of Common
Stock held by the Trust as to which Participants are not entitled to direct, or
have not directed, the voting of such Shares, shall be voted by the Trustee as
directed by the Committee.
ARTICLE VIII
TRUST
8.01 TRUST. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Committee pursuant to the Plan.
8.02 MANAGEMENT OF TRUST. It is the intention of this Plan and Trust that
the Trustee shall have complete authority and discretion with respect to the
management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust, except those attributable to cash dividends paid
with respect to Plan Shares not held in the Plan Share Reserve, in Common Stock
to the fullest extent practicable, except to the extent that the Trustee
determines that the holding of monies in cash or cash equivalents is necessary
to meet the obligations of the Trust. In performing their duties, the Trustees
shall have the power to do all things and execute such instruments as may be
deemed necessary or proper, including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets in the
Common Stock without regard to any law now or hereafter in force limiting
investments for Trustees or other fiduciaries. The investment authorized
herein may constitute the only investment of the Trust, and in making such
investment, the Trustee is authorized to purchase Common Stock from the
Parent or from any other source, and such Common Stock so purchased may be
outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in accordance with
(a) above in such deposit accounts, and certificates of deposit (including
those issued by the Bank), obligations of the United States government or
its agencies or such other investments as shall be considered the
equivalent of cash.
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(c) To sell, exchange or otherwise dispose of any property at any time held
or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in the name
of a nominee, without the addition of words indicating that such security
is an asset of the Trust (but accurate records shall be maintained showing
that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may be in the opinion
of the Trustee reasonable for the proper operation of the Plan and Trust.
(f) To employ brokers, agents, custodians, consultants and accountants.
(g) To hire counsel to render advice with respect to their rights, duties
and obligations hereunder, and such other legal services or representation
as they may deem desirable.
(h) To hold funds and securities representing the amounts to be distributed
to a Participant or his Beneficiary as a consequence of a dispute as to the
disposition thereof, whether in a segregated account or held in common with
other assets.
(i) As may be directed by the Committee or the Board from time to time, the
Trustee shall pay to the Bank earnings of the Trust attributable to the
Plan Share Reserve.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of a court for the exercise of any power
herein contained, or to maintain bond.
8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and detailed
records and accounts of all transactions of the Trust, which shall be available
at all reasonable times for inspection by any legally entitled person or entity
to the extent required by applicable law, or any other person determined by the
Committee.
8.04 EARNINGS. All earnings, gains and losses with respect to Trust assets
shall be allocated in accordance with a reasonable procedure adopted by the
Committee, to bookkeeping accounts for Participants or to the general account of
the Trust, depending on the nature and allocation of the assets generating such
earnings, gains and losses. In particular, any earnings on cash dividends
received with respect to shares of Common Stock shall be allocated to accounts
for Participants, except to the extent that such cash dividends are distributed
to Participants, if such shares are the subject of outstanding Plan Share
Awards, or, otherwise to the Plan Share Reserve.
8.05 EXPENSES. All costs and expenses incurred in the operation and
administration of this Plan, including those incurred by the Trustee, shall be
paid by the Bank.
8.06 INDEMNIFICATION. Subject to the requirements and limitations of
applicable laws and regulations, the Parent and the Bank shall indemnify, defend
and hold the Trustee harmless against all claims, expenses and liabilities
arising out of or related to the exercise of the Trustee's powers and the
discharge of their duties hereunder, unless the same shall be due to their gross
negligence or willful misconduct.
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ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan Shares
available for issuance pursuant to the Plan Share Awards and the number of
Shares to which any Plan Share Award relates shall be proportionately adjusted
for any increase or decrease in the total number of outstanding shares of Common
Stock issued subsequent to the effective date of the Plan resulting from any
split, subdivision or consolidation of the Common Stock or other capital
adjustment, change or exchange of the Common Stock, or other increase or
decrease in the number or kind of shares effected without receipt or payment of
consideration by the Bank.
9.02 AMENDMENT AND TERMINATION OF THE PLAN. The Board may, by resolution,
at any time, amend or terminate the Plan. The power to amend or terminate the
Plan shall include the power to direct the Trustee to return to the Bank all or
any part of the assets of the Trust, including shares of Common Stock held in
the Plan Share Reserve, as well as shares of Common Stock and other assets
subject to Plan Share Awards which have not yet been earned by the Participants
to whom they have been awarded. However, the termination of the Trust shall not
affect a Participant's right to earn Plan Share Awards and to the distribution
of Common Stock relating thereto, including earnings thereon, in accordance with
the terms of this Plan and the grant by the Committee or the Board.
Notwithstanding the foregoing, no action of the Board may increase (other than
as provided in Section 9.01 hereof) the maximum number of Plan Shares permitted
to be awarded under the Plan as specified at Section 5.03, materially increase
the benefits accruing to Participants under the Plan or materially modify the
requirements for eligibility for participation in the Plan unless such action of
the Board shall be subject to ratification by the stockholders of the Parent.
9.03 NONTRANSFERABLE. Plan Share Awards and rights to Plan Shares shall not
be transferable by a Participant, and during the lifetime of the Participant,
Plan Shares may only be earned by and paid to the Participant who was notified
in writing of the Award by the Committee pursuant to Section 6.03. No
Participant or Beneficiary shall have any right in or claim to any assets of the
Plan or Trust, nor shall the Parent, the Bank, or any Subsidiary be subject to
any claim for benefits hereunder.
9.04 NO EMPLOYMENT RIGHTS. Neither the Plan nor any grant of a Plan Share
Award or Plan Shares hereunder nor any action taken by the Trustee, the
Committee or the Board in connection with the Plan shall create any right,
either express or implied, on the part of any Participant to continue in the
employ or service of the Parent, the Bank, or a Subsidiary thereof.
9.05 VOTING AND DIVIDEND RIGHTS. No Participant shall have any voting or
dividend rights of a stockholder with respect to any Plan Shares covered by a
Plan Share Award, except as expressly provided in Sections 7.02 and 7.04 above,
prior to the time said Plan Shares are actually distributed to such Participant.
9.06 GOVERNING LAW. The Plan and Trust shall be governed by and construed
under the laws of the State of New Jersey, except to the extent that Federal Law
shall be deemed applicable.
9.07 EFFECTIVE DATE. The Plan shall be effective as of the date of approval
of the Plan by stockholders of the Parent, subject to the receipt of approval or
non-objection by the OTS or other applicable banking regulator, if applicable.
C-9
9.08 TERM OF PLAN. This Plan shall remain in effect until the earlier of
(i) termination by the Board, (ii) the distribution of all assets of the Trust,
or (iii) 21 years from the Effective Date. Termination of the Plan shall not
effect any Plan Share Awards previously granted, and such Plan Share Awards
shall remain valid and in effect until they have been earned and paid, or by
their terms expire or are forfeited.
9.09 TAX STATUS OF TRUST. It is intended that the Trust established hereby
shall be treated as a grantor trust of the Bank under the provisions of Section
671 et seq. of the Internal Revenue Code of 1986, as amended, as the same may be
amended from time to time.
C-10
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ASB HOLDING COMPANY
365 BROAD STREET
BLOOMFIELD, NEW JERSEY 07003
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ANNUAL MEETING OF STOCKHOLDERS
January 20, 2005
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The undersigned hereby appoints the Board of Directors of ASB Holding
Company (the "Company"), or its designee, with full powers of substitution, to
act as attorneys and proxies for the undersigned, to vote all shares of Common
Stock of the Company, which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting"), to be held at The Wilshire Grand Hotel,
350 Pleasant Valley Way, West Orange, New Jersey, on January 20, 2005, at 10:00
a.m. and at any and all adjournments thereof, in the following manner:
FOR WITHHELD
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1. The election as director of the nominees
listed with terms to expire in 2008
(except as marked to the contrary below): [ ] [ ]
Stanley Obal
Vincent S. Rospond
INSTRUCTIONS: To withhold your vote for any nominee, write the nominee's name on
- ------------ the line provided below.
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FOR AGAINST ABSTAIN
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2. The approval of the ASB Holding Company
2005 Stock Option Plan. [ ] [ ] [ ]
3. The approval of the American Savings
Bank of NJ 2005 Restricted Stock Plan. [ ] [ ] [ ]
4. The ratification of the appointment of
Crowe Chizek and Company LLC as the
Company's independent auditor for the
fiscal year ending September 30, 2005. [ ] [ ] [ ]
The Board of Directors recommends a vote "FOR" the above listed
nominees and proposals. --
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THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR THE NOMINEES LISTED AND THE
PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS
SIGNED PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT.
AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this Proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this Proxy by filing a
subsequently dated Proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this Proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement and the 2004 Annual Report to Stockholders.
[ ] Check Box if You Plan
Dated: to Attend the Annual Meeting.
-----------------------
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------ ----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this Proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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