Exhibit 10.7
AMENDED AND RESTATED
EXECUTIVE SALARY CONTINUATION AGREEMENT
THIS
AMENDED AND RESTATED AGREEMENT, made and entered into this 17th day
of
June, 2008, by and between American Bank of New Jersey, a savings
bank organized
and existing under the laws of the United States (hereinafter
referred to as the
"Bank"), and Richard Bzdek, an Executive of the Bank (hereinafter
referred to as
the "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the
Executive and the Bank have previously entered into an
Executive Salary Continuation Agreement; and
WHEREAS, since the execution of the original agreement,
certain changes to
Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"), have
been enacted; and
WHEREAS, it is
necessary to revise the original agreement to reflect these
changes to the Code;
ACCORDINGLY, it is the
desire of the Bank and the Executive to enter into
this agreement
(sometimes
referred to herein as
the "Executive
Plan") under
which the Bank will agree to make certain payments to the Executive at
retirement or the Executive's beneficiary(ies) in the event of the
Executive's
death pursuant to this agreement;
FURTHERMORE, it is the
intent of the parties
hereto that this
Executive
Plan be considered
an unfunded
arrangement
maintained
primarily to provide
supplemental
retirement benefits
for the Executive, and be considered a
non-qualified benefit
plan for purposes of the Employee Retirement Security Act
of 1974, as amended
("ERISA").
The Executive is fully advised of the Bank's
financial status and
has had substantial
input in the design
and operation of
this benefit plan; and
NOW,
THEREFORE, in
consideration of services to be performed in the future
as well as of the mutual promises and covenants herein contained it
is agreed as
follows:
I.
EMPLOYMENT
The Bank agrees to employ the Executive in such capacity as the Bank
may from time to time
determine. The
Executive will
continue in the
employ of the
Bank in such capacity and with such duties and
responsibilities as may be assigned to him, and with such
compensation
as may be determined
from time to time by
the Board of Directors
of
the Bank.
II. FRINGE
BENEFITS
The salary
continuation
benefits provided by this agreement are
granted by the Bank as a fringe benefit to the Executive and are not
part of any salary reduction plan or an arrangement deferring a bonus
or a
salary increase. The
Executive has no option to take any current
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payment or bonus in lieu of these salary continuation benefits except
as set forth hereinafter.
III.
NORMAL RETIREMENT AGE
Normal Retirement
Age shall mean the date on which
the Executive
attains age sixty-five (65).
IV. RETIREMENT
BENEFIT
Provided said
retirement constitutes
a Separation
from Service (as
that
phrase is defined under Section 409A of the Code and the
regulations and guidance of general applicability issued thereunder
(referred to herein as "Section 409A")), the Bank, commencing with
the
first day of the month
following the later of
the date the Executive
actually retires
or the date the Executive attains his Normal
Retirement Age, shall
pay Executive an annual benefit equal to thirty
percent (30%) of the Executive's average base salary (with each
year's
base salary determined on an annualized basis, taking into account
any
base salary
adjustments occurring
during the applicable
year) based
upon the average
of the highest three (3) out of the last five
(5)
years of employment
(including the year in which the Separation from
Service occurs).
Said
benefit shall be paid in equal monthly
installments (1/12 of
the annual
benefit) until the death of the
Executive.
Notwithstanding the foregoing, if the Executive is, as of the
date of
his Separation
from Service,
a "Specified
Employee" (as defined
in
Section 409A), then the retirement benefits described in this
Section
IV shall commence
to be paid on the
first day of the month that next
follows the
six-month
anniversary
of the date the Executive
experiences a Separation from Service, or his death, if earlier,
with
the first payment including all monthly retirement benefits that
would
have been previously paid but for this sentence.
V.
DEATH OF THE EXECUTIVE
In the event of the
death of the
Executive,
this agreement shall
terminate and, if applicable, the Executive's beneficiary(ies) shall
be paid a death
benefit under
the terms of the
Endorsement
Method
Split Dollar Agreement between the Executive and the Bank and not
this
agreement.
VI. BENEFIT
ACCOUNTING
The Bank shall account for this benefit using GAAP accounting
principles. The Bank
shall establish an accrued liability retirement
account for the Executive into which appropriate reserves shall be
accrued.
VII.
VESTING
The Executive
shall be one
hundred percent (100%) vested in the
benefits provided herein.
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VIII.
OTHER TERMINATION OF EMPLOYMENT AND DISABILITY
A. Other Termination of Employment:
Subject to Subsection
VIII.A(i) hereinbelow,
in the event that
the employment
of the Executive shall terminate prior to Normal
Retirement Age, as
provided in Section
III, for reasons
other than
"disability" (as
defined in Section
VIII.B) or Change of Control (as
defined in Section IX), but including by the Executive's voluntary
action or
by the Executive's
discharge by the Bank without cause, and
such termination of employment constitutes a Separation of Service
(as
defined in Section IV), then this agreement shall terminate upon the
date of such
termination of
employment and the Bank shall pay to the
Executive as severance
compensation
an amount of money
equal to the
accrued balance of the Executive's liability reserve account. This
severance compensation shall be paid in a lump sum no later than 2
1/2
months following
the date of the Executive's termination of
employment.
Notwithstanding the foregoing, if the Executive is as of
the date of Separation from Service a "Specified Employee" (as herein
defined), then
payment under this Article VIII shall not be paid
earlier than the 183rd day following the date the Executive
incurs a
Separation from Service, or his death, if earlier.
(i) Discharge
for Cause: In the event the Executive shall be
discharged for cause
at any time, all benefits provided herein
shall be forfeited.
The term "for cause"
shall be as defined in
the Executive's
Employment Agreement
between the Executive
and
the Bank in effect at the time of said termination (or if no
such
agreement exists,
the Employment Agreement most recently in
effect between the Bank and the Executive). If a dispute arises
as to discharge "for
cause," such dispute
shall be resolved
by
arbitration as set forth in this Executive Plan.
B. Disability:
In the event the Executive becomes disabled prior to his
Separation from
Service
(as defined in Section IV), and the
Executive's Separation
from Service is on account of such disability,
the Executive shall be
entitled to receive one hundred percent (100%)
of the Executive's
accrued liability balance at the time of said
disability.
Except as otherwise provided herein, said accrued
liability balance at
termination shall be
paid to the Executive in a
lump sum no
later than 2 1/2 months following the date of the
Executive's Separation from Service.
Disability shall be defined in the Executive's Employment Agreement
in
effect at the time of his Separation from Service or, if no
Employment
Agreement is then in
effect, then as
defined in the Bank's long term
disability policy in effect at the time of said disability. If
neither
definition exists at
the time of
termination and there
is a dispute
regarding whether the
Executive is disabled,
such dispute
shall be
resolved by a physician selected by the Bank, a physician
selected by
the Executive, and a third physician selected by each of the other
two
(2) physicians. Such
resolution shall be
binding upon all parties to
this agreement.
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Notwithstanding the foregoing, if the disability that gives
rise
to the Executive's
Separation
from Service does not cause the
Executive to be
"disabled" within the
meaning of Section
409A,
and if, as of the
date of such
Separation
from Service, the
Executive is a "Specified Employee" (as defined in Section
409A),
then his disability
benefits payable pursuant to this Section
VIII.B shall
commence to be paid on the first day of the
month
that next follows the six-month anniversary of the date the
Executive incurs a
Separation from
Service, or his death, if
earlier.
IX. CHANGE OF
CONTROL
Change of Control
shall be as defined in the Executive's Employment
Agreement between the
Executive and the Bank in effect at the time of
said Change of Control, or if no such agreement is then in
effect, by
the regulations of the OTS in 12 CFR ss.574. Upon a Change of
Control,
if the Executive
subsequently suffers
an involuntary
termination of
service, except for cause, and such termination of service
constitutes
a Separation
from Service (as defined in Section
IV), or, upon a
voluntary termination
of service within twelve (12) months after such
Change of Control, if any of the following events, which have not
been
consented to in advance by the Executive in writing, occur: (i) if
the
Executive
would be required to move his pers
