RUMSON-FAIR HAVEN BANK & TRUST COMPANY ... - Liberty Online

(3) Effective January 12, 2011, Dennis J. Flanagan was appointed President and Chief Executive
Officer of the Bank. During 2010, he served as Executive Vice President, Chief Financial Officer
and Secretary of the Bank.
Employment Agreements
On February 9, 2010, Dennis J. Flanagan entered into an employment agreement with the
Bank which provided for a two-year term. Upon the expiration of the initial two-year term, the
agreement will automatically renew for successive one-year periods. The employment
agreement provides for a base compensation for Mr. Flanagan of $153,500 per year and provides
that Mr. Flanagan is eligible to participate in the Bank’s bonus program, under which he may
receive a bonus of up to thirty-three percent (33%) of Mr. Flanagan’s then current base salary.
Bonus compensation is based on, among other things, Mr. Flanagan’s performance and the
Bank’s loan and deposit growth and overall profitability. The Personnel and Compensation
Committee of the Bank’s Board of Directors will determine the amount of any such bonuses. In
the event the Bank terminates Mr. Flanagan’s employment agreement without cause, Mr.
Flanagan is entitled to (i) a severance payment equal to the greater of (a) the value of the
remaining time left in the agreement term based on current salary or (b) twelve (12) months’
current salary, plus (ii) a pro-rata share of any annual bonus for the year of termination, (iii) the
pro-rata value of all employee-related benefits and the automobile allowance calculated on the
same basis as the severance payment and (iv) payment for any accrued yet unused vacation time.
In addition, all unvested stock options previously awarded shall fully vest and be immediately
exercisable. In the event that Mr. Flanagan’s duties and responsibilities or his total annual
compensation and/or benefits are substantially diminished in connection with a change of control
of the Bank (as such term is defined in the agreement), Mr. Flanagan will have the option to
terminate the employment agreement and receive the severance payments described above for a
period of eighteen (18) months.
On January 7, 2008, Mr. Thomas Sannelli entered into a change of control agreement
with the Bank for a one-year term. The term of the agreement is to continue in full force and
effect for one year so long as Mr. Sannelli is employed by the Bank. In the event the Bank
terminates Mr. Sannelli without cause in connection with a change in control of the Bank (as
such term is defined in the agreement), he will be entitled to a severance payment in an amount
equal to (i) his monthly salary then in effect multiplied by twelve, plus (ii) an amount equal to
the largest annual cash bonus payment made to him for services provided in any of the three
years ended December 31 of the year preceding the year in which the change of control event
occurs, plus (iii) an amount equal to the product of the cash equivalent of the monthly benefits
provided to him by the Bank at the time of the change of control event multiplied by twelve.
During the agreement term and for a period of six months following termination by Mr. Sannelli
of the change of control agreement for any reason, he may not commence employment with or
render service to any other bank or banking institution within the state of New Jersey.
Director Compensation
In 2010 the Board of Directors, excluding employee directors, were paid fees for
attending board and committee meetings. Payment of such fees was in the form of newly-issued
shares of the Bank’s Common Stock, as previously approved by the stockholders. For all of
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