AMERICAN BANK OF NEW JERSEY
DIRECTORS CONSULTATION AND RETIREMENT PLAN
AS AMENDED AND RESTATED
WHEREAS, American Bank of New Jersey, Bloomfield, New Jersey (the
"Savings Bank") previously implemented a Directors Consultation and Retirement
Plan ("Plan") to reward the years of extensive service provided by the current
members of the Board of Directors and to continue to attract and to retain the
best talent available to serve on its Board of Directors; and
WHEREAS, the corporate structure of the Savings Bank has change since
the initial implementation of such Plan to include the mutual holding company
for the Savings Bank ("American Savings, MHC" or "MHC") and the mid-tier holding
company ("ASB Holding Company" or "Company") and the directors of the Savings
Bank also serve as directors of such other entities and receive compensation for
such services, and
WHEREAS, the Board of Directors of the Savings Bank has determined that
it is appropriate and advisable that the compensation paid by the Company and
the MHC, if applicable, to its directors also be considered in determining
benefits under the Plan, and
WHEREAS, the Board of Directors of the Savings Bank has determined such
program may best be accomplished by having the Savings Bank sponsor such a
retirement plan, with benefits to be based upon annual retainers and regular
Board meeting fees paid by the Savings Bank, the Company and the MHC, if
applicable, and with the applicable costs of such a program and benefits
thereunder to be allocated to the Company, the Savings Bank and the MHC.
NOW THEREFORE, BE IT RESOLVED that the Plan, as previously approved and
amended by the Savings Bank, be approved, amended and restated by the Savings
Bank, and adopted and approved by the Company and the MHC, as of June 28, 2005,
as follows:
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall, for the purpose
of the Plan and any subsequent amendment thereof, have the following meanings
unless a different meaning is plainly required by the content:
"Beneficiary" means the surviving spouse of the Participant (if any) as
of the date of death of such Participant, and shall specifically include the
Participant's estate, should the Participant have no surviving spouse. The term
Beneficiary shall also specifically include the estate of a Participant's
spouse, if such spouse shall survive the Participant.
"Board" means the Board of Directors of the Savings Bank, the Company
or the MHC, as constituted from time to time, and successors thereto.
"Change in Control" means: (i) the execution of an agreement for the
sale of all, or a material portion, of the assets of the Company or the Savings
Bank; (ii) the execution of an agreement for a merger or recapitalization of the
Company or the Savings Bank or any merger or recapitalization whereby the
Company or the Savings Bank is not the surviving entity; (iii) a change of
control of the Company or the Savings Bank, as otherwise defined or determined
by the Office of Thrift Supervision, or regulations promulgated by it; or (iv)
the acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder) of twenty-five percent (25%) or
more of the outstanding voting securities of the Company or the Savings Bank by
any person, trust, entity or group. This limitation shall not apply to the
purchase of shares by underwriters in connection with a public offering of the
Company or the Savings Bank stock (or a parent holding company's stock), or the
purchase of shares of up to 25% of any class of securities of the Savings Bank
by a tax-qualified employee stock benefit plan. The term "person" refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. A change in control shall not be
deemed to have occurred as a result of a reorganization of the Savings Bank into
a stock savings bank, the reorganization of the Savings Bank into the mutual
holding company structure, or the reorganization of the MHC and the Company and
simultaneous acquisition of 100% of the stock of the Savings Bank by a new
parent savings and loan holding company or bank holding company.
"Committee" means the Compensation Committee of the Savings Bank or the
administrative committee as appointed by the Board pursuant to Section 6.11
herein.
"Company" means the ASB Holding Company and any successor entity or any
future parent corporation of the Savings Bank.
"Director" means a member of the Board of the Savings Bank, the Company
or the MHC who is not otherwise an employee of the Savings Bank, the Company
orthe MHC, or any parent or subsidiary thereof.
"Disability" means a mental or physical disability which prevents the
Director from performing the normal duties of his or her position with the
Savings Bank. The disability must have prevented the Director from performing
his or her duties for at least three months, and a physician satisfactory to
both the Director and the Savings Bank must certify that the Director is
disabled from performing his or her normal duties with the Savings Bank
thereafter.
"Effective Date" means August 27, 1996, with such amendments as
contained herein.
"MHC"means American Savings, MHC, the mutual holding company of the
Savings Bank.
"Participant" means a Director serving on or after the Effective Date
and electing to participate in the Plan. A Director's participation in the Plan
shall continue as long as he or she fulfills all the requirements for
participation subject to the right of termination, amendment, and modification
of the Plan set forth herein. A Director who previously served as an employee of
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the Bank and upon retirement as an employee was eligible to receive future
retirement benefits under a defined benefit pension plan or a supplemental
retirement plan, executive salary continuation agreement or similar deferred
compensation arrangement maintained by the Bank shall not be eligible to be a
Participant in this Plan.
"Plan" means the American Bank of New Jersey Directors Consultation and
Retirement Plan as set forth herein, and as may be amended from time to time by
the Board.
"Retirement Benefit Amount" means the benefit payable under the Plan in
accordance Section 2.4 herein.
"Retirement Date" means the date of termination of service as a
Director following a Participant's completion of not less than 12 years of
service as a Director, or not less than six years of service following a Change
in Control; provided however, the Retirement Date with regard to Directors
serving as of the Effective Date who have completed not less than five years of
service as of the Effective Date shall be the date of termination of service as
a Director without regard to the 12 years of service requirement. Upon death or
Disability, a Director shall be deemed to have terminated service as of such
date. A Director may attain the Retirement Date for Service completed at one
corporate entity and not yet meet the requirements for the Retirement Date for
another corporate entity.
"Savings Bank" means American Bank of New Jersey, Bloomfield, New
Jersey, or any predecessor or successor thereto.
"Service" means all years of Service as a member of the Board and all
predecessor entities; provided however, Service with "predecessor entities"
refers only to predecessors of the Savings Bank prior to the Effective Date. A
year of Service shall consist of twelve consecutive months of service. In
calculating the Retirement Benefit Amount for Service to the Company, the
Savings Bank and the MHC, years of Service may differ based upon actual Service
as a member of the Board of the Company, the Savings Bank and the MHC.
ARTICLE II
BENEFITS
2.1 Retirement. Upon a Participant's termination from service as a
Director of the Savings Bank, the Company or the MHC on or after his or her
applicable Retirement Date for such corporate entity, the Savings Bank shall pay
to the Participant the Retirement Benefit Amount, as described and in the amount
set forth at Article II, Section 2.4; provided that such payments shall not
commence prior to such Director's attainment of age 65, except in accordance
with Sections 2.2, 2.3 or 2.5 herein. Payment of such Retirement Benefit Amount
shall begin on the first business day of the month immediately following a
Participant's Retirement Date or the first business day of the month immediately
following such Participant's attainment of age 65, if later. The Retirement
Benefit Amount will continue to be paid on the first business day of each
subsequent month until all scheduled payments are made to the Participant or the
Beneficiary. Except as provided at Article II, Sections 2.2, 2.3, and 2.5
herein, upon a Participant's
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termination from service as a Director prior to his or her Retirement Date, the
Savings Bank shall have no financial obligations to the Participant under the
Plan.
2.2 Change in Control.
(a) Benefits payable to a Participant that has
terminated from service as a Director prior to the date of a
Change in Control shall nevertheless remain payable thereafter
without regard to such Change in Control. However, upon a
Change in Control, all future benefits payable pursuant to
Sections 2.1, 2.2, 2.3, and 2.5 of the Plan, shall be made in
a lump sum payment equal to the present value of all future
benefits payable to such Participant as soon as
administratively feasible as of or immediately following such
Change in Control. The interest rate in effect for a 3 year
U.S. Treasury Note on the date of the lump sum payment as
reported in the Wall Street Journal shall be used for purposes
of calculating the present value of amounts payable in
accordance with Section 2.4.
(b) A Participant that has not terminated from
service as a Director prior to the date of a Change in Control
who as of the date of such Change in Control has reached such
Retirement Date shall be immediately eligible to receive the
Retirement Benefit Amount specified at Section 2.4 herein
without regard to the actual termination of service as a
Director or the age of such Director at such time. Such
Retirement Benefit Amount shall be paid in the form of a lump
sum payment equal to the present value of the Retirement
Benefit Amount payable under Section 2.4 discounted as
provided at Section 2.2(a). Payment of the lump sum amount
shall be made to the Participant as soon as practicable as of
or immediately following such Change in Control.
2.3 Total and Permanent Disability. In the event of the Disability of a
Participant on or after the Retirement Date who as of the date of Disability
otherwise meets the requirements set forth at Section 2.1 without regard to the
age of such Director, such Participant will be paid the Retirement Benefit
Amount specified at Article II, Section 2.4. Payment of such benefits shall
commence on the first business day of the month immediately following the
Savings Bank's receipt of a certification of such Participant's Disability.
2.4 Level of Benefit Payments. A Participant who retires as a Director
on or after his or her Retirement Date in accordance with Sections 2.1, 2.2, 2.3
or 2.5 herein, and who enters into an agreement to be a consulting director of
the Savings Bank, the Company and the MHC in accordance with Section 2.6
hereinafter shall receive the Retirement Benefit Amount set forth as follows:
The Retirement Benefit Amount shall be equal to a monthly
payment for a period of the life of the Participant, but in no event
for a period of less than 144 consecutive calendar months, equal to the
product of (.08333333) times 100% of the highest aggregate annual fees
paid to a Participant during the most recently completed three calendar
year periods ending on or before such Participant's Retirement Date;
provided that annual fees paid for purposes of computation of the
Retirement Benefit Amount shall include retainer
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fees and fees paid for regular Board meetings attended (and excluding
payment of fees for Special Meetings and Committee meetings) by the
Savings Bank, the Company and the MHC.
2.5 Death of Participant. Upon the death of a Participant who is
receiving benefit payments under the Plan prior to his or her death, the
remaining monthly payments to be made under the Plan (if any) shall be paid to
the Beneficiary after the Participant's death. Such remaining payments shall be
made until the total number of monthly payments made directly to such
Participant plus the number of monthly payments made to such Beneficiary shall
equal a total of 144 monthly payments. Upon the death of a Participant who is
not receiving benefit payments under the Plan prior to his or her death who as
of the date of death otherwise meets the requirements set forth at Section 2.1,
the Savings Bank shall pay to the Beneficiary the Retirement Benefit Amount set
forth at Article II, Section 2.4 for a period of 144 monthly payments. If a
Beneficiary dies prior to receiving all payments of the Retirement Benefit
Amount, then the remaining monthly payments will continue to be paid to the
Beneficiary's estate, and all obligations of the Savings Bank, the Company and
the MHC under the Plan shall cease to exist with respect to such Beneficiary
only after all such payments have been made.
2.6 Notice of Retirement. A director electing to participate in the
Plan shall deliver written notice ("Notice") to the Board not less than thirty
days prior to the actual Retirement Date that such Director elects to
participate in the Plan. Such Notice, in a form similar to that contained at
Schedule A hereto, shall specify the date of such retirement from the Board as a
Director and the Participant's availability as a Consulting Director. A
Participant who terminates service as a Director upon death, Disability, or a
Change in Control shall not be required to deliver such Notice in order to be
entitled to receive benefits under the Plan.
ARTICLE III
TRUST/NON-FUNDED STATUS OF PLAN
3.1 Trust/Non-Funded Status of Plan. Except as may be specifically
provided, nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Savings Bank, the Company or the
MHC and the Participant or any other person. Any funds which may be invested
under the provisions of this Plan shall continue for all purposes to be a part
of the general funds of the Savings Bank, the Company or the MHC. No person
other than the Savings Bank shall by virtue of the provisions of this Plan have
any interest in such funds. The Savings Bank shall not be under any obligation
to use such funds solely to provide benefits hereunder, and no representations
have been made to any Participant that such funds can or will be used only to
provide benefits hereunder. To the extent that any person acquires a right to
receive payments under the Plan, such rights shall be no greater than the right
of any unsecured general creditor.
ARTICLE IV
VESTING
4.1 Vesting. All benefits under this Plan are deemed non-vested
and forfeitable prior to a Participant meeting the requirements set forth at
Sections 2.1, 2.2, 2.3 and 2.5 herein. All
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benefits payable hereunder shall be deemed 100% vested and non-forfeitable by
the Participant upon his or her meeting the requirements set forth at Sections
2.1, 2.2, 2.3 or 2.5 herein. No benefits shall be deemed payable hereunder for
any period prior to the time that such benefits shall be deemed 100% vested and
non-forfeitable.
ARTICLE V
TERMINATION
5.1 Termination. All the rights of a Participant shall terminate
immediately upon the Participant ceasing to be in the active service of the
Savings Bank, the Company or the MHC prior to the time that benefits payable
under the Plan shall be deemed to be 100% vested and non- forfeitable in
accordance with Article V. At the sole discretion of the Committee, a leave of
absence approved by the Board shall not constitute a cessation of service within
the meaning of this Section 5.1.
ARTICLE VI
GENERAL PROVISIONS
6.1 Other Benefits. Nothing in this Plan shall diminish or impair a
Participant's eligibility, participation or benefit entitlement under any other
benefit, insurance or compensation plan or agreement of the Savings Bank, the
Company or the MHC now or hereinafter in effect.
6.2 No Effect on Employment or Service. This Plan shall not be deemed
to give any Participant or other person in the employ or service of the Savings
Bank, the Company or the MHC any right to be retained in the employment or
service of the Savings Bank, the Company or the MHC, or to interfere with the
right of the Savings Bank, the Company or the MHC to terminate any Participant
or such other person at any time and to treat him or her without regard to the
effect which such treatment might have upon him or her as a Participant in this
Plan.
6.3 Legally Binding. The rights, privileges, benefits and obligations
under this Plan are intended to be legal obligations of the Savings Bank and
binding upon the Savings Bank, its successors and assigns.
6.4 Modification. The Savings Bank, by action of the Board of
Directors, reserves the exclusive right to amend, modify, or terminate this
Plan. Any such termination, modification or amendment shall not terminate or
diminish any rights or benefits accrued by any Participant prior thereto without
regard to whether such rights or benefits shall be deemed vested as of such
date. The Savings Bank shall give thirty (30) days notice in writing to any
Participant prior to the effective date of any amendment, modification or
termination of this Plan.
6.5 Arbitration. Any controversy or claim arising out of or relating to
the Plan or the breach thereof shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
with such arbitration hearing to be held at the offices of the American
Arbitration Association ("AAA") nearest to the home office of the Savings Bank,
unless otherwise mutually agreed to by the Participant and the Savings Bank, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
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6.6 Limitation. No rights of any Participant are assignable by any
Participant or Beneficiary, in whole or in part, either by voluntary or
involuntary act or by operation of law. The rights of a Participant or
Beneficiary hereunder are not subject to anticipation, alienation, sale,
transfer, assignment, pledge, hypothecation, encumbrance or garnishment by
creditors of the Participant or Beneficiary. Further, a Participant's rights
under the Plan are not subject to the debts, contracts, liabilities,
engagements, or torts of any Participant. No Participant or Beneficiary shall
have any right under this Plan or right against any assets held or acquired
pursuant thereto other than the rights of a general, unsecured creditor of the
Savings Bank pursuant to the unsecured promise of the Savings Bank to pay the
benefits accrued hereunder in accordance with the terms of this Plan. The
Savings Bank has no obligation under this Plan to fund or otherwise secure its
obligations to render payments hereunder to a Participant or Beneficiary. No
Participant or Beneficiary shall have any discretion in the use, disposition, or
investment of any asset acquired or set aside by the Savings Bank to provide
benefits under this Plan.
6.7 ERISA and IRC Disclaimer. It is intended that the Plan be neither
an "employee welfare benefit plan" nor an "employee pension benefit plan" for
purposes of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Further, it is intended that the Plan will not cause the interest of
a Participant under the Plan to be includable in the gross income of such
Participant prior to the actual receipt of a payment under the Plan for purposes
of the Internal Revenue Code of 1986, as amended ("IRC").
6.8 Regulatory Matters.
(a) The Participant or Beneficiary shall have no right to receive
compensation or other benefits in accordance with the Plan for any period after
termination of service for Just Cause. Termination for "Just Cause" shall
include termination because of the Participant's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the Plan.
(b) Notwithstanding anything herein to the contrary, any payments made
to a Participant or Beneficiary pursuant to the Plan shall be subject to and
conditioned upon compliance with 12 USC ss.1828(k) and 12 CFR 563.39 and any
regulations promulgated thereunder.
6.9 Incompetency. If the Savings Bank shall find that any person to
whom any payment is payable under the Plan is deemed unable to care for his or
her personal affairs because of illness or accident, any payment due (unless a
prior claim therefor shall have been made by a duly appointed guardian,
committee or other legal representative) may be paid to the spouse, a child, a
parent, or a brother or sister, or to any person deemed by the Savings Bank to
have incurred expense for such person otherwise entitled to payment, in such
manner and proportions as the Board may determine in its sole discretion. Any
such payments shall constitute a complete discharge of the liabilities of the
Savings Bank under the Plan.
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6.10 Construction. The Committee shall have full power and authority to
interpret, construe and administer this Plan and the Committee's interpretations
and construction thereof, and actions thereunder, shall be binding and
conclusive on all persons for all purposes. Directors of the Savings Bank, the
Company or the MHC shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this Plan
unless attributable to his or her own willful, gross misconduct or lack of good
faith.
6.11 Plan Administration. The Board shall administer the Plan;
provided, however, that the Board may appoint an administrative committee (i.e.,
the Committee) to provide administrative services or perform duties required by
this Plan. The Committee shall have only the authority granted to it by the
Board.
6.12 Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of New Jersey ("State"), except to the extent
that federal law shall be deemed to apply.
6.13 Successors and Assigns. The Plan shall be binding upon any
successor or successors of the Savings Bank, and unless clearly inapplicable,
reference herein to the Savings Bank shall be deemed to include any successor or
successors of the Savings Bank.
6.14 Sole Agreement. The Plan expresses, embodies, and supersedes all
previous agreements, understandings, and commitments, whether written or oral,
between the Savings Bank and any Participants hereto with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, the Savings Bank has caused the Plan to be executed
by its duly authorized officer.
American Bank of New Jersey
September 14, 2005 By: /s/Joseph Kliminski
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Date Title: Chief Executive Officer
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September 14, 2005 /s/Kathleen E. Walsh
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Date Witness