0000755933-95-000010.txt : 19950815 0000755933-95-000010.hdr.sgml : 19950815 ACCESSION NUMBER: 0000755933-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERCHANGE FINANCIAL SERVICES CORP /NJ/ CENTRAL INDEX KEY: 0000755933 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 222553159 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10518 FILM NUMBER: 95562822 BUSINESS ADDRESS: STREET 1: PARK 80 WEST PLAZA TWO STREET 2: ATTN INTERCHANGE STATE BANK CITY: SADDLE BROOK STATE: NJ ZIP: 07662 BUSINESS PHONE: 2017032265 MAIL ADDRESS: STREET 1: PARK 80 WEST STREET 2: PLAZE II CITY: SADDLE BROOK STATE: NJ ZIP: 07663 FORMER COMPANY: FORMER CONFORMED NAME: INTERCHANGER STATE BANK DATE OF NAME CHANGE: 19870416 FORMER COMPANY: FORMER CONFORMED NAME: INTERCHANGE FINANCIAL SERVICES CORP DATE OF NAME CHANGE: 19861209 10-Q 1 FOR PERIOD ENDED JUNE 30, 1995 INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31, 1995 1994 ------- ---------- Assets Cash and due from banks $ 22,367 $ 22,865 Federal funds sold 13,900 3,100 ------ ------ Total cash and cash equivalents 36,267 25,965 ------ ------ Investment securities at amortized cost (approximate market value of $116,542 and $116,718) 115,789 121,512 Securities available for sale at estimated market value (amortized cost of $31,506 and $30,079) 30,637 27,269 Loans 287,982 290,654 Less: Allowance for loan losses 3,849 3,839 ------- ------- Net loans 284,133 286,815 ------- ------- Premises and equipment, net 5,246 4,606 Foreclosed real estate 949 880 Accrued interest receivable and other assets 10,422 12,265 ------- ------ Total assets $483,443 $479,312 ======== ======= Liabilities Deposits Non-interest bearing $ 73,558 $ 66,435 Interest bearing 358,484 357,735 ------- ------- Total deposits 432,042 424,170 Short-term borrowings 7,100 11,702 Accrued interest payable and other liabilities 3,477 3,311 Long-term borrowings 2,500 5,000 ------ ------ Total liabilities 445,119 444,183 ------- ------- Stockholders' equity Preferred stock 5,000 5,000 Common stock 4,495 4,495 Capital surplus 11,333 11,333 Retained earnings 20,679 18,737 Unrealized losses on securities available for sale, net of income taxes (560) (1,813) ------- ------- 40,947 37,752 Less: Treasury stock 2,623 2,623 ------ ------ Total stockholders' equity 38,324 35,129 ------ ------ Total liabilities and stockholders' equity $483,443 $479,312 ======= =======
INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data)
Three months ended Six months ended June 30, June 30, ------------------ ------------------ 1995 1994 1995 1994 ----- ---- ---- ---- Interest income Interest and fees on loans $6,802 $5,357 $13,490 $10,771 Interest on federal funds sold 117 202 189 296 Interest and dividends on securities Taxable interest income 2,267 2,162 4,556 4,095 Interest income exempt from federal income taxes 14 19 29 33 Dividends 50 32 80 73 ----- ----- ------ ------ Total interest income 9,250 7,772 18,344 15,268 Interest expense Interest on deposits 3,666 2,545 7,083 4,934 Interest on short-term borrowings 117 5 262 8 Interest on long-term borrowings 44 - 107 - ----- ----- ----- ----- Total interest expense 3,827 2,550 7,452 4,942 ----- ----- ------ ------ Net interest income 5,423 5,222 10,892 10,326 Provision for loan losses 375 225 600 450 ----- ----- ------ ------ Net interest income after provision for loan losses 5,048 4,997 10,292 9,876 ----- ----- ------ ------ Non-interest income Service fees on deposit accounts 374 390 735 724 Net gain on sale of loans available for sale 11 15 22 15 Net gain on sale of securities available for sale 15 - 15 - Accretion of discount in connection with acquisition 190 190 380 380 Other 523 549 977 806 ----- ----- ----- ------ Total non-interest income 1,113 1,144 2,129 1,925 ----- ----- ----- ------ Non-interest expenses Salaries and benefits 1,832 1,728 3,670 3,437 Net occupancy 515 483 1,025 996 Furniture and equipment 178 160 329 332 Advertising and promotion 189 167 379 345 Federal Deposit Insurance Corporation assessment 240 213 465 424 Foreclosed real estate expense 38 93 110 217 Other 849 1,112 1,962 2,059 ----- ----- ----- ----- Total non-interest expenses 3,841 3,956 7,940 7,810 ----- ----- ----- ----- Income before income taxes 2,320 2,185 4,481 3,991 Income taxes 755 776 1,511 1,411 ----- ----- ----- ----- Net income $1,565 $1,409 $2,970 $2,580 ====== ====== ====== ====== Per common share $0.57 $0.51 $1.08 $0.94 ====== ====== ====== ====== See notes to consolidated financial statements
INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
Unrealized Losses on Securities Preferred Common Capital Retained Available Treasury Stock Stock Surplus Earnings for Sale Stock Total --------- ------ ------- -------- ---------- -------- ----- Balance at January 1, 1994 $5,000 $4,495 $11,333 $15,100 $ 9 $(2,623) $33,314 Net income 2,580 2,580 Dividends on common stock at $0.35 per share (944) (944) Dividends on preferred stock (56) (56) Decrease in market valuation- securities available for sale (1,534) (1,534) ------ ----- ------ ------ ------ ------ ------ Balance atJune 30, 1994 5,000 4,495 11,333 16,680 (1,525) (2,623) 33,360 Net income 3,056 3,056 Dividends on common stock at $0.35 per share (943) (943) Dividends on preferred stock (56) (56) Decrease in market valuation- securities available for sale (288) (288) ------ ----- ------ ------ ----- ------ ------ Balance at December 31, 1994 5,000 4,495 11,333 18,737 (1,813) (2,623) 35,129 Net income 2,970 2,970 Dividends on common stock at $0.36 per share (971) (971) Dividends on preferred stock (57) (57) Increase in market valuation- securities available for sale 1,253 1,253 ------ ----- ------ ------ ----- ------ ------- Balance at June 30 , 1995 $5,000 $4,495 $11,333 $20,679 $ (560) $(2,623) $38,324 ====== ===== ====== ======= ====== ====== ======= See notes to consolidated financial statements.
INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
For the six months ended June 30, ------------------------ 1995 1994 ---- ---- Cash flows from operating activities Net income $2,970 $2,580 Non-cash items included in earnings Depreciation and amortization of fixed assets 395 429 Amortization of securities premiums 748 782 Accretion of securities discounts (27) (4) Amortization of premiums in connection with acquisition 222 181 Accretion of discount in connection with acquisition (380) (380) Provision for loan losses 600 450 Reduction in carrying value of foreclosed real estate - 100 Net gain on sale of securities available for sale (15) - Net gain on sale of loans available for sale (22) (15) Net gain on sale of foreclosed real estate (13) (135) Increase in carrying value of loans available for sale (81) - Loss on sale of fixed assets 25 - (Increase) decrease in operating assets Net origination of loans available for sale (193) (13,842) Proceeds from sale of loans available for sale 837 901 Premium in connection with acquisition - (1,724) Accrued interest receivable 209 (413) Other 761 (4) Increase in operating liabilities Accrued interest payable 141 6 Other 25 116 ----- ------ Cash provided by (used for) operating activities 6,202 (10,972) ----- ------ Cash flows from investing activities Proceeds from (payments for) Net repayments of loans 2,076 3,410 Purchase of loans (502) (31,173) Sale of loans - 309 Purchase of securities available for sale (4,915) (1,031) Maturities of securities available for sale 1,146 374 Sale of securities available for sale 2,359 116 Sale of foreclosed real estate 309 543 Purchase of investment securities - (10,585) Maturities of investment securities 5,000 9,000 Advances on foreclosed real estate (18) (106) Purchase of fixed assets (1,100) (291) Sale of fixed assets 3 - ----- ------ Cash provided by (used for) investing activities 4,358 (29,434) ----- ------ Cash flows from financing activities Proceeds from (payments for) Deposits in excess of withdrawals 7,872 4,561 Retirement of other borrowings (7,102) (307) Acquisition of deposit accounts - 26,468 Dividends (1,028) (1,000) Short-term borrowings - 6,900 ----- ------ Cash (used for) provided by financing activities (258) 36,622 ----- ------ Increase (decrease) in cash and cash equivalents 10,302 (3,784) Cash and cash equivalents, beginning of year 25,965 26,568 ------ ------ Cash and cash equivalents, end of period $36,267 $22,784 ====== ====== Supplemental disclosure of cash flow information: Cash paid for: Interest $7,311 $4,936 Income taxes 1,443 1,589 Supplemental disclosure of non-cash investing activities: Loans transferred to foreclosed real estate 347 233 Securitization of loans reclassified to securities available for sale - 27,417 (Increase) decrease-market valuation of securities available for sale $ (1,941) $ 1,525 See notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1995 1. Financial Statements -------------------- The consolidated financial statements should be read in conjunction with the financial statements and schedules as presented in the Annual Report on Form 10-K of Interchange Financial Services Corporation (the "Company") for the year ended December 31, 1994. Consolidated financial data for the six months ended June 30, 1995 and 1994 are unaudited but reflect all adjustments consisting of only normal recurring adjustments which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the interim periods. Results for interim periods are not necessarily indicative of results to be expected for any other period or the full year. 2. Legal Proceedings ----------------- Interchange State Bank (the "Bank"), a wholly owned subsidiary of the Company, was a defendant in a lawsuit commenced in April 1989, (Great American Mortgage Corp., et al vs. Robert Utter, et al.) filed in Superior Court of New Jersey alleging that the Bank was statutorily liable in conversion for having paid checks drawn on demand deposit accounts of plaintiffs at the Bank bearing forged or irregular endorsements. On December 2, 1992, the Court directed judgment to be entered against the Bank in the total principal sum of $484 thousand with prejudgment interest. On April 5, 1993, the Bank filed a Notice of Appeal of this judgment and, by virtue of post-judgment motions, the amount was reduced to the principal sum of $311 thousand plus pre-judgment interest. This judgment was appealed and, by virtue of this appeal, the amount was further reduced to $245 thousand. The matter remained on appeal until May 8, 1995 at which time, by Court order, the matter was settled. Pursuant thereto, the Bank has paid a total of $89 thousand against the aforesaid judgment, which has now been discharged of record. The Bank continues to pursue various parties for recoupment of the aforesaid monies under which it is likely that the Bank's liability for the payment will either be reduced to its proportionate share under contribution theories or it will be exonerated under indemnification theories. In a related matter, on January 8, 1993, an interlocutory judgment was entered against the Bank in the principal sum of $120 thousand with prejudgment interest. The Bank has appealed this judgment and a stay of execution has been effected. In 1992, the Company accrued $500 thousand as a provision for an adverse judgment in this litigation. Based on the May 8, 1995 partial settlement of these matters, the Company has reduced the reserve by $250 thousand to $161 thousand which the Company and its legal counsel believe is adequate to cover any remaining liabilities related to these matters. The Company is also a party to routine litigation involving various aspects of its business, none of which, in the opinion of management, after consultation with legal counsel, is expected to have a material, adverse impact on the consolidated financial condition, results of operations or liquidity of the Company. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion is an analysis of the consolidated financial condition and results of operations of the Company for the six months ended June 30, 1995 and 1994 and should be read in conjunction with the consolidated financial statements and notes thereto included in Item 1 hereof. Results of Operations --------------------- Earnings Summary ---------------- Net income in the first six months of 1995 improved $390 thousand or 15.1% over the comparable 1994 period. The increase was primarily attributable to the increase in net interest income of $566 thousand for the six-month period ended June 30, 1995 over the same period a year ago. The improvement in net interest income resulted from a 7.6% increase in average earning assets for the six-month period ended June 30, 1995 over the same period a year ago. For the same periods, net yield on average earning assets decreased ten basis points. In addition, earnings were favorably impacted by the settlement of a 1992 lawsuit against the banking subsidiary (see legal proceedings in notes to consolidated financial statements). The settlement resulted in a $250 thousand reduction of a previously established reserve, adding $162 thousand to net income. Furthermore, earnings were positively affected by an increase of $187 thousand in the recognition of discounts related to purchased loans. Earnings for the period were adversely affected by an increase in the provision for loan losses of $150 thousand (see provision for loan losses and loan loss experience). Furthermore, earnings were negatively impacted by an increase in non-interest expenses of $130 thousand. Salaries and benefits increased $233 thousand and made up the largest portion of the increase. The increase resulted from annual salary increases and new employees. Increases in other non-interest expenses were offset by a reduction of $250 thousand to the litigation reserve discussed above. The Company's most important revenue source is net interest income which is the difference between interest earned on its interest earning assets, such as loans and investments, and the interest paid on its interest bearing liabilities, primarily deposits. Changes in net interest income from period to period result from increases or decreases in the average balances of interest earning assets and interest bearing liabilities and increases or decreases in the spread between the average rates earned on such assets and the average rates paid on such liabilities. For the six months ended June 30, 1995 net interest income on a tax equivalent basis, was $10.9 million, an increase of 5.5% over net interest income of $10.3 million in the same period in 1994. The principal factor in this improvement was an increase of approximately 7.6% in average interest earning assets resulting from loan acquisitions of $25.7 million in June 1994 and $6.9 million in October 1994. An increase in interest expense partially offset the positive effects derived from interest earning assets. Interest expense increased due to an increase of 7.2% in average interest bearing liabilities. The increase occurred mostly in certificates of deposit and borrowings which typically bear the highest interest rate. The borrowings were used primarily to fund the loan acquisitions. Nonperforming Assets -------------------- Nonperforming assets, consisting of nonaccrual loans, restructured loans and foreclosed real estate, increased $646 thousand from $5.4 million at June 30, 1994 to $6.1 million at June 30, 1995. In the second quarter of 1995 nonperforming assets decreased $698 thousand from $6.8 million at March 31, 1995. The ratio of nonperforming assets to total loans and foreclosed real estate increased from 1.9% at June 30, 1994 to 2.1% at June 30, 1995. The ratio at June 30, 1995 decreased as compared to 2.6% at December 31, 1994. Provision for Loan Losses and Loan Loss Experience -------------------------------------------------- The provision for loan losses represents management's determination of the amount necessary to bring the allowance for loan losses to a level that management considers adequate to reflect the risk of future losses inherent in the Company's loan portfolio. In its evaluation of the adequacy of the allowance for loan losses, management considers past loan loss experience, changes in the composition of nonperforming loans, the condition of borrowers facing financial pressure, the relationship of the current level of the allowance to the loan portfolio and to nonperforming loans and existing economic conditions. However, the process of determining the adequacy of the allowance is necessarily judgmental and subject to changes in external conditions. Accordingly, there can be no assurance that existing levels of the allowance will ultimately prove adequate to cover actual loan losses. The provision for loan losses was increased $150 thousand during the quarter ended June 30, 1995 to bring the allowance for loan losses to a level that is commensurate with the increase in loan activity. As of June 30, 1995 gross loans were $288 million as compared to $280 million at the same date in 1994. The allowance for loan losses was $3.8 million at June 30, 1995 and December 31, 1994 representing 63.4% and 50.7% of nonperforming assets at those dates, respectively. Securities Investment securities and securities available for sale consist of the following: (in thousands)
June 30, 1995 ------------------------------------------------------------------------ Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value --------- ---------- ---------- ------ Investment securities Obligations of U.S. Treasury $ 115,789 $ 1,560 $ 807 $ 116,542 ------- ---- ----- ------- Securities available for sale Obligation of U.S. Agencies 28,041 5 895 27,151 Obligations of states and political subdivisions 882 19 - 901 Other debt securities 148 2 - 150 Equity securities 2,435 - - 2,435 ------- ----- ----- ------ 31,506 26 895 30,637 ------- ----- ----- ------ Total securities $ 147,295 $ 1,586 $ 1,702 $ 147,179 ======= ====== ===== ======= December 31, 1994 ------------------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value --------- --------- --------- ------ Investment securities Obligations of U.S. Treasury $ 121,512 $ 47 $ 4,841 $ 116,718 ------- ---- ----- ------- Securities available for sale Obligations of U.S. agencies 26,855 - 2,823 24,032 Obligations of states and political subdivisions 1,442 12 2 1,452 Other debt securities 147 3 - 150 Equity securities 1,635 - - 1,635 ------- ----- ------ ------ 30,079 15 2,825 27,269 ------- ----- ------ ------ Total securities $ 151,591 $ 62 $ 7,666 $ 143,987 ======= ===== ====== =======
At June 30, 1995, the contractual maturities of investment securities and securities available for sale are as follows: (in thousands)
Securities Investment Securities Available for Sale -------------------------- --------------------------- Amortized Market Amortized Market Cost Value Cost Value -------- -------- ------- ------ Within 1 year $ 17,155 $ 17,183 $ 612 $ 617 After 1 but within 5 years 81,676 81,827 4,191 4,202 After 5 but within 10 years 16,958 17,532 123 125 After 10 years - - 24,145 23,258 Equity securities - - 2,435 2,435 -------- -------- ------- ------- Total $115,789 $116,542 $31,506 $30,637 ======== ======== ======= =======
Capital Adequacy The table below presents the Company's capital position as of June 30, 1995: (dollars in thousands) Stockholders' equity $ 38,324 Intangible assets (2,199) Unrealized loss-securities available for sale 560 ------ Tier 1 capital 36,685 Allowable portion of allowance for loan losses 3,517 ------- Total risk-based capital $40,202 ======= Risk weighted assets $281,339 ========
Minimum Actual Requirement ------ ----------- Risk-based ratio Tier 1 13.04% 4.00% Total 14.29 8.00 Leverage capital ratio 7.75 3.00
Liquidity --------- Liquidity is the ability to provide promptly and economically the cash necessary to meet customer credit needs and satisfy deposit withdrawal requirements. Cash and cash equivalents totaled $36.3 million at June 30, 1995 up from $26.0 million at December 31, 1994. As of June 30, 1995 securities maturing within one year amounted to $17.8 million, up from $15.3 million at December 31, 1994. Another source of liquidity is borrowing capability. The Bank has a variety of sources of short-term liquidity available, including federal funds purchased from correspondent banks, the Federal Reserve discount window, credit services through its membership in the Federal Home Loan Bank, sales of securities under repurchase agreements as well as loan participation or sales of loans and sales of securities available for sale. The Company also generates liquidity from the regular principal payments made on its portfolio of loans. The Company believes that these sources of liquidity are adequate to meet its needs. PART II OTHER INFORMATION Item 1. Legal Proceedings -------------------------- Interchange State Bank (the "Bank"), a wholly owned subsidiary of the Company, was a defendant in a lawsuit commenced in April 1989, (Great American Mortgage Corp., et al vs. Robert Utter, et al.) filed in Superior Court of New Jersey alleging that the Bank was statutorily liable in conversion for having paid checks drawn on demand deposit accounts of plaintiffs at the Bank bearing forged or irregular endorsements. On December 2, 1992, the Court directed judgment to be entered against the Bank in the total principal sum of $484 thousand with prejudgment interest. On April 5, 1993, the Bank filed a Notice of Appeal of this judgment and, by virtue of post-judgment motions, the amount was reduced to the principal sum of $311 thousand plus pre-judgment interest. This judgment was appealed and, by virtue of this appeal, the amount was further reduced to $245 thousand. The matter remained on appeal until May 8, 1995 at which time, by Court order, the matter was settled. Pursuant thereto, the Bank has paid a total of $89 thousand against the aforesaid judgment, which has now been discharged of record. The Bank continues to pursue various parties for recoupment of the aforesaid monies under which it is likely that the Bank's liability for the payment will either be reduced to its proportionate share under contribution theories or it will be exonerated under indemnification theories. In a related matter, on January 8, 1993, an interlocutory judgment was entered against the Bank in the principal sum of $120 thousand with prejudgment interest. The Bank has appealed this judgment and a stay of execution has been effected. In 1992, the Company accrued $500 thousand as a provision for an adverse judgment in this litigation. Based on the May 8, 1995 partial settlement of these matters, the Company has reduced the reserve by $250 thousand to $161 thousand which the Company and its legal counsel believe is adequate to cover any remaining liabilities related to these matters. Item 4. Submission of Matters to a Vote of Security Holders ------------------------------------------------------------ On May 25, 1995 at the annual meeting, the following matters were submitted to a vote of security holders: (a) Election of directors. Anthony D. Andora, J. Fletcher Creamer, Jr., David R. Ficca and Benjamin Rosenzweig were re-elected, by the common shareholders, as directors of Interchange Financial Services Corporation. The votes were as follows: For Against Abstain --------- ------- ------- Anthony D. Andora 2,393,293 1,244 - J. Fletcher Creamer, Jr. 2,391,958 2,579 - David R. Ficca 2,393,597 940 - Benjamin Rosenzweig 2,392,428 2,109 - (b) Approval of an amendment to the stock option plan of 1989 to increase from 80,000 to 270,000 the number of shares available to be issued pursuant to the plan. The votes were as follows: For Against Abstain --------- ------- ------- Amendment to stock option plan of 1989 1,631,740 272,837 43,175 (c) Ratification of appointment of Deloitte & Touche LLP as independent auditors. The votes were as follows: For Against Abstain --------- ------- ------- Ratification of appointment of independent auditors 2,384,061 2,175 8,301 The total number of shares of Interchange Financial Services Corporation common stock outstanding as of April 20, 1995 the record date for the annual meeting, was 2,697,100. Item 6. Exhibits and Reports on Form 8-K ----------------------------------------- (a) The following exhibits are furnished herewith: Exhibit No. ---------- 10 Material contracts (a) Agreement for legal services between Andora, Palmisano & Geaney and the Company dated April 27, 1995. (b) Change in Control Agreement dated May 22, 1995 for Anthony S. Abbate (c) Change in Control Agreement dated May 22, 1995 for Robert N. Harris (d) Change in Control Agreement dated May 22, 1995 for Richard Latrenta (e) Change in Control Agreement dated May 22, 1995 for Frank Giancola 11 Statement Re: Computation of Per Share Earnings (b) No reports on Form 8-K have been filed during the quarter ended June 30, 1995. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Interchange Financial Services Corporation by: /s/Robert N. Harris ------------------- Robert N. Harris Executive Vice President EX-10 2 MATERIAL CONTRACTS AGREEMENT FOR LEGAL SERVICES THIS AGREEMENT for legal services made this 27th day of April, 1995, by and between: ANDORA, PALMISANO & GEANEY A Professional Corporation 303 Molnar Drive, P.O. Box 431 Elmwood Park, New Jersey 07407-0431 hereinafter referred to as "Attorneys", and INTERCHANGE FINANCIAL SERVICES CORPORATION Park 80 West, Plaza Two Saddle Brook, New Jersey 07662 and INTERCHANGE STATE BANK A Banking Corporation Park 80 West, Plaza Two Saddle Brook, New Jersey 07662 hereinafter referred to as "Clients". IN CONSIDERATION of the mutual promises, covenants and undertakings contained herein the Attorneys and the Clients agree as follows: 1. RETAINER Clients hereby retain the services of Attorneys to act as its corporate counsel for the term and compensation as outlined herein. 2. TERM The Attorneys shall be retained by Clients until the next annual reorganization meeting of Clients. 3. COMPENSATION The Clients shall pay the Attorneys for services rendered as corporate counsel an annual retainer of NINETY-FIVE THOUSAND DOLLARS ($95,000.00) payable in equal monthly installments on the first day of each and every month commencing the first day of the month following the execution of this Agreement. Clients shall, in addition to the annual retainer, pay to the Attorneys all out-of-pocket expenses, filing fees, or disbursements made by the Attorneys on Clients' behalf. Clients shall, in addition to the payment of the annual retainer and all costs, pay to the Attorneys a legal fee based on the rate per hour as shown on Schedule A for all legal services provided to Clients by the Attorney which are "legal services rendered in addition to those rendered as corporate counsel." Such fees and costs shall be billed by Attorneys to clients on a thirty-day basis and Clients shall pay all bills within five (5) days after each monthly Board of Director's meeting of the Clients. 4. DEFINITIONS The following words and phrases shall have the following meanings: A. "Legal services rendered as corporate counsel" shall mean and include all of the following types of legal work: 1. Except as hereinafter set forth in subparagraph B, document review and drafting of documents on behalf of the Clients including, but not limited to: leases, notes, contracts, mortgages, commitment letters, disclosure statements, modifications, extensions and legal agreements not related to third-party borrowers, except residential mortgage reviews. 2. Providing legal advice required in the usual course of Clients' business including compliance analysis. 3. Attendance at Board of Director's and Shareholders' Meetings other than as a Director. 4. Advice regarding levies and executions 5. Preparation of annual SEC 10K, 10Q and "ordinary" proxy filings. B. "Legal services rendered in addition to those rendered as general corporate counsel" shall mean and include, but not be limited to, all of the following types of legal work which shall be billed on an hourly basis: 1. Litigation in which Clients are named as defendants. 2. Litigation or other proceedings in which Clients and another person or agency (i.e., Small Business Administration) specially retain Attorney. The hourly rate for such legal services shall be specifically agreed upon by Clients, the agency, and Attorneys. 3. Foreclosure litigation, including lien protection litigation in any Court including the Bankruptcy Court. 4. Regulatory or administrative law proceedings including but not limited to Department of Banking, zoning agencies, N.L.R.B., F.D.I.C., and Tax Court. 5. Loan reviews and closings, including modifications and extensions thereof, except that the fee shall be based upon $250.00 per hour plus costs and such fee shall not exceed 1/2% of the principal amount of the loan plus costs but in no event shall such fee be less than $250.00. 6. Closings in which the bank is a buyer or seller. 7. SEC Filings other than annual 10K, 10Q or "ordinary" proxy filings. 8. Mergers and Acquisitions. 9. All other legal services not specifically set forth in Paragraph 4A. 5. BINDING EFFECT This agreement shall be binding upon and shall inure to the benefit of the parties' successors or assigns. 6. NO ASSIGNMENT This agreement shall not be assigned or sublet without the express written consent of the parties. 7. LAW APPLICABLE This agreement shall be governed by the laws of the State of New Jersey. 8. SEVERABILITY In the event any clause, section or paragraph of this agreement shall be declared invalid or unenforceable by a court of competent jurisdiction, such invalid or unenforceability shall not affect the remainder of this Agreement. IN WITNESS WHEREOF the parties have hereunto signed this agreement the date first above written. INTERCHANGE STATE BANK ATTEST: /s/Benjamin Rosenzweig /s/ Anthony S. Abbate Benjamin Rosenzweig, Secretary Anthony S. Abbate, President INTERCHANGE FINANCIAL SERVICES CORPORATION ATTEST: /s/Benjamin Rosenzweig /s/ Anthony S. Abbate Benjamin Rosenzweig, Secretary Anthony S. Abbate, President ANDORA, PALMISANO & GEANEY ATTEST: s/sJohn P. Palmisano, s/sAnthony D. Andora John P. Palmisano, Secretary Anthony D. Andora, President SCHEDULE A The hourly rates contained herein are subject to change on the anniversary dates of the Agreement of Legal Services. Schedule A, reviewed and approved at Annual Reorganization Meeting on April 27, 1995. Andora D. Andora $250.00 per hour John P. Palmisano $250.00 per hour John F. Geaney $250.00 per hour Other Partners and Senior Associates $175.00 per hour Other Associates $150.00 per hour May 22, 1995 Mr. Anthony S. Abbate 6 Robin Hood Court Montvale, NJ 07645 Dear Mr. Abbate: Interchange Financial Services Corporation, a New Jersey Bank Holding Company (the "Company"), considers the maintenance of a sound and vital executive team to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that the possibility of a change in control presently exists and may exist in the future, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of executives to the detriment of the Company and its stockholders. Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's executive team. This letter agreement sets forth the severance benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated subsequent to a "change in control of the Company" (as defined in Section 2 hereof) under the circumstances described below. 1. Company's Right to Terminate During the term of this Agreement, you agree that you will not voluntarily leave the employ of the Company except as may be permitted hereunder, and will continue to perform your regular duties as President and Chief Executive Officer of the Company. Notwithstanding the foregoing, the Company may terminate your employment at any time, subject to providing the benefits hereinafter specified in accordance with the terms hereof. 2. Change in Control No benefits shall be payable hereunder unless there shall have been a change in control of the Company, as set forth below, and your employment by the Company shall thereafter have been terminated in accordance with Section 3 below. For purposes of this Agreement, a "change in control of the Company" shall mean, unless the Board otherwise directs resolution approved by unanimous vote of the entire membership thereof adopted prior thereto, a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% control of the combined voting power of the Company's then outstanding securities; or (ii) during any period of three consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 3. Termination Following Change in Control If any of the events described in Section 2 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 4 hereof upon your subsequent termination, so long as such termination occurs within three (3) years after a change in control of the Company, unless such termination is (A) because of your death or Retirement, (B) by the Company for Cause or Disability or (c) by you other than for Good Reason. (i) Disability; Retirement (A) Termination by the Company of your employment based on "Disability" shall mean termination because of your absence from your duties with the Company on a full-time basis for 130 consecutive business days, as a result of your incapacity due to physical or mental illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given following such absence, you shall have returned to the full time performance of your duties; or (B) Termination by the Company or you of your employment based on "Retirement" shall mean your voluntary termination in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. (ii) Cause Termination by the Company of your employment for Cause shall mean your termination on account of: (A) Your willful commission of an act that causes or is reasonably likely to cause substantial damage to the Company; (B) Your commission of an act of fraud in the performance of your duties on behalf of the Company; (C) Your conviction for commission of a felony or other crime punishable by confinement for a period in excess of one (1) year in connection with the performance of your duties on behalf of the Company; or (D) The order of a federal or state bank regulatory agency or a court of competent jurisdiction requiring the termination of your employment. (iii) Good Reason Termination by you of your employment for "Good Reason" shall mean termination based on: (A) Subsequent to a change in control of the Company, and without your express written consent, the assignment to you of any duties inconsistent with your positions, duties, responsibilities and status with the Company immediately prior to a change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to a change in control, or any removal of you from or any failure to re-elect you to any of such positions, except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason; (B) Subsequent to a change in control of the Company, a reduction by the Company in your base salary as in effect on the date hereof or as the same may be increased from time to time; (C) Subsequent to a change in control of the Company, a failure by the Company to continue any bonus plans in which you are presently entitled to participate (the "Bonus Plans") as the same may be modified from time to time but substantially in the forms currently in effect, or a failure by the Company to continue you as a participant in the Bonus Plans on at least the same basis as you presently participate in accordance with the Bonus Plans; (D) Subsequent to a change in control of the Company and without your express written consent, the Company's requiring you to be based anywhere other than within thirty (30) miles of your present office location, except for required travel on the Company's business to an extent substantially consistent with your present business travel obligations; (E) Subsequent to change in control of the Company, the failure by the Company to continue in effect any benefit or compensation plan, stock ownership plan, stock purchase plan, stock option plan, life insurance plan, health-and-accident plan or disability plan in which you are participating at the time of a change in control of the Company (or plans providing you with substantially similar benefits), the taking of any action by the Company which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you at the time of the change in control, or the failure by the Company to provide you with the number of paid vacation days to which you are then entitled in accordance with the company's normal vacation policy in effect on the date hereof; (F) Subsequent to a change in control of the Company, the failure by the Company to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 6 hereof; or (G) Subsequent to a change in control of the Company, any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (iv) below (and, if applicable, paragraph (ii) above); and for purposes of this Agreement, no such purported termination shall be effective. (iv) Notice of Termination Any purported termination by the Company pursuant to paragraph (i) or (ii) above or by you pursuant to subparagraph (B) of paragraph (i) or paragraph (iii) above shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. (v) Date of Termination "Date of Termination" shall mean (A) if your employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period), (B) if your employment is terminated pursuant to paragraph (ii) above, the date specified in the Notice of Termination, and (C) if your employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction entered upon such arbitration award (the time of appeal therefrom having expired and no appeal having been perfected). 4. Certain Benefits Upon Termination If, after a change in control of the Company shall have occurred, as defined in Section 2 above, your employment by the Company shall be terminated (A) by the Company other than for Cause, Disability or Retirement or (B) by you for Good Reason, then you shall be entitled to the benefits provided below: (i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year and the portion of the current fiscal year ending on the Date of Termination which has not yet been awarded or paid to you under the Bonus Plans; (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you on the fifth day following the Date of Termination a lump sum amount equal to three (3) times your annual base salary at the highest rate in effect during the twelve (12) months immediately preceding the Date of Termination; (iii)The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement); (iv) The Company shall maintain in full force and effect, for your continued benefit until the earlier of (A) three (3) years after the Date of Termination or (B) your commencement of full time employment with a new employer, all life insurance, medical, health and accident, and disability plans, programs or arrangements in which you were entitled to participate immediately prior to the Date of Termination, provided that your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is barred, the Company shall arrange to provide you with benefits substantially similar to those which you are entitled to receive under such plans and programs. In addition, the Company shall pay you a lump sum amount of equivalent actuarial value to the additional pension benefit you would have earned under the Company's Pension Plan as in effect on the date the change of control occurs, but disregarding any Internal Revenue Code limitations pertaining to qualified plans, if you were granted at the time of your termination of employment three (3) additional years of Credited Service and deemed 3 years older under the Plan. In determining the equivalent actuarial value of the additional pension granted under this Section 4, an interest rate of 5% and the mortality table under the Company's Pension Plan shall be used to determine the lump sum amount. You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination or otherwise. 5. Certain Further Payments by the Corporation In the event that any amount or benefit paid or distributed to you pursuant to this Agreement, taken with any amounts or benefits otherwise paid or distributed to you by the Company or any affiliated company (collectively the "Covered Payments"), are or become subject to the tax (the "Excise Tax") imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, the Company shall pay to you at the time specified below an additional amount (the "Tax Reimbursement Payment") such that the net amount retained by you with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and Excise Tax on the Tax Reimbursement Payment provided for by this Section 5, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments. (i) For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax, (A) Such Covered Payments will be treated as "parachute payments" within the meaning of Section 280G of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the opinion of the Company's independent certified public accountants appointed prior to the date the Change of Control occurs or tax counsel selected by such accountants (the "Accountants"), such Covered Payments (in whole or in part) either do not constitute parachute payments or represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the "base amount", or such parachute payments are otherwise not subject to such Excise Tax, and (B) The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code. (ii) For purposes of determining the amount of the Tax Reimbursement Payment, you shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) Any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year. (iii)In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, you shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Tax Reimbursement Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is later determined to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payment with respect to such excess) at the time that the amount of such excess is finally determined. (iv) The Tax Reimbursement Payment (or portion thereof) provided for in this Section 5 shall be paid to you not later than ten (10) business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to you by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. In the event that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Corporation to you, payable on the fifth business day after written demand by the Company for payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 6. Term of Agreement This Agreement shall continue in effect so long as you are employed by the Company provided that, if a change of control of the Company, as defined in Section 2 hereof, shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of thirty-six (36) months beyond the month in which such change in control occurred. 7. Successor; Binding Agreement (i) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate. 8. Notice For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the President of the Company with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 9. Miscellaneous No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and such officer as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement; provided, however, that this Agreement shall not supersede or in any way limit the rights, duties or obligations you may have under any other written agreement with the Company. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New Jersey. 10. Validity The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 11. Tax Withholding The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 12. Counterparts This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 13. Arbitration Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, THE COMPANY By /S/Anthony D. Andora ------------------------ Name: Anthony D. Andora Title:Chairman of the Board Agreed to this 26th day of May, 1995. /s/Anthony S. Abbate ---------------------------------- Anthony S. Abbate, President & CEO Attest by: /s/Benjamin Rosenzweig ---------------------- Benjamin Rosenzweig, Secretary May 22, 1995 Mr. Robert N. Harris 7 Brockden Drive Mendham, NJ 07945 Dear Mr. Harris: Interchange Financial Services Corporation, a New Jersey Bank Holding Company (the "Company"), considers the maintenance of a sound and vital executive team to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that the possibility of a change in control presently exists and may exist in the future, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of executives to the detriment of the Company and its stockholders. Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's executive team. This letter agreement sets forth the severance benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated subsequent to a "change in control of the Company" (as defined in Section 2 hereof) under the circumstances described below. 1. Company's Right to Terminate During the term of this Agreement, you agree that you will not voluntarily leave the employ of the Company except as may be permitted hereunder, and will continue to perform your regular duties as Executive Vice President of the Company. Notwithstanding the foregoing, the Company may terminate your employment at any time, subject to providing the benefits hereinafter specified in accordance with the terms hereof. 2. Change in Control No benefits shall be payable hereunder unless there shall have been a change in control of the Company, as set forth below, and your employment by the Company shall thereafter have been terminated in accordance with Section 3 below. For purposes of this Agreement, a "change in control of the Company" shall mean, unless the Board otherwise directs resolution approved by unanimous vote of the entire membership thereof adopted prior thereto, a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% control of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 3. Termination Following Change in Control If any of the events described in Section 2 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 4 hereof upon your subsequent termination, so long as such termination occurs within two (2) years after a change in control of the Company, unless such termination is (A) because of your death or Retirement, (B) by the Company for Cause or Disability or (c) by you other than for Good Reason. (i) Disability; Retirement (A) Termination by the Company of your employment based on "Disability" shall mean termination because of your absence from your duties with the Company on a full-time basis for 130 consecutive business days, as a result of your incapacity due to physical or mental illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given following such absence, you shall have returned to the full time performance of your duties; or (B) Termination by the Company or you of your employment based on "Retirement" shall mean your voluntary termination in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. (ii) Cause Termination by the Company of your employment for Cause shall mean your termination on account of: (A) Your willful commission of an act that causes or is reasonably likely to cause substantial damage to the Company; (B) Your commission of an act of fraud in the performance of your duties on behalf of the Company; (C) Your conviction for commission of a felony or other crime punishable by confinement for a period in excess of one (1) year in connection with the performance of your duties on behalf of the Company; or (D) The order of a federal or state bank regulatory agency or a court of competent jurisdiction requiring the termination of your employment. (iii) Good Reason Termination by you of your employment for "Good Reason" shall mean termination based on: (A) Subsequent to a change in control of the Company, and without your express written consent, the assignment to you of any duties inconsistent with your positions, duties, responsibilities and status with the Company immediately prior to a change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to a change in control, or any removal of you from or any failure to re-elect you to any of such positions, except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason; (B) Subsequent to a change in control of the Company, a reduction by the Company in your base salary as in effect on the date hereof or as the same may be increased from time to time; (C) Subsequent to a change in control of the Company, a failure by the Company to continue any bonus plans in which you are presently entitled to participate (the "Bonus Plans") as the same may be modified from time to time but substantially in the forms currently in effect, or a failure by the Company to continue you as a participant in the Bonus Plans on at least the same basis as you presently participate in accordance with the Bonus Plans; (D) Subsequent to a change in control of the Company and without your express written consent, the Company's requiring you to be based anywhere other than within thirty (30) miles of your present office location, except for required travel on the Company's business to an extent substantially consistent with your present business travel obligations; (E) Subsequent to change in control of the Company, the failure by the Company to continue in effect any benefit or compensation plan, stock ownership plan, stock purchase plan, stock option plan, life insurance plan, health-and-accident plan or disability plan in which you are participating at the time of a change in control of the Company (or plans providing you with substantially similar benefits), the taking of any action by the Company which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you at the time of the change in control, or the failure by the Company to provide you with the number of paid vacation days to which you are then entitled in accordance with the company's normal vacation policy in effect on the date hereof; (F) Subsequent to a change in control of the Company, the failure by the Company to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 6 hereof; or (G) Subsequent to a change in control of the Company, any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (iv) below (and, if applicable, paragraph (ii) above); and for purposes of this Agreement, no such purported termination shall be effective. (iv) Notice of Termination Any purported termination by the Company pursuant to paragraph (i) or (ii) above or by you pursuant to subparagraph (B) of paragraph (i) or paragraph (iii) above shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. (v) Date of Termination "Date of Termination" shall mean (A) if your employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period), (B) if your employment is terminated pursuant to paragraph (ii) above, the date specified in the Notice of Termination, and (C) if your employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction entered upon such arbitration award (the time of appeal therefrom having expired and no appeal having been perfected). 4. Certain Benefits Upon Termination If, after a change in control of the Company shall have occurred, as defined in Section 2 above, your employment by the Company shall be terminated (A) by the Company other than for Cause, Disability or Retirement or (B) by you for Good Reason, then you shall be entitled to the benefits provided below: (i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year and the portion of the current fiscal year ending on the Date of Termination which has not yet been awarded or paid to you under the Bonus Plans; (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you on the fifth day following the Date of Termination a lump sum amount equal to two (2) times your annual base salary at the highest rate in effect during the twelve (12) months immediately preceding the Date of Termination; (iii)The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement); (iv) The Company shall maintain in full force and effect, for your continued benefit until the earlier of (A) two (2) years after the Date of Termination or (B) your commencement of full time employment with a new employer, all life insurance, medical, health and accident, and disability plans, programs or arrangements in which you were entitled to participate immediately prior to the Date of Termination, provided that your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is barred, the Company shall arrange to provide you with benefits substantially similar to those which you are entitled to receive under such plans and programs. In addition, the Company shall pay you a lump sum amount of equivalent actuarial value to the additional pension benefit you would have earned under the Company's Pension Plan as in effect on the date the change of control occurs, but disregarding any Internal Revenue Code limitations pertaining to qualified plans, if you were granted at the time of your termination of employment two (2) additional years of Credited Service and deemed 2 years older under the Plan. In determining the equivalent actuarial value of the additional pension granted under this Section 4, an interest rate of 5% and the mortality table under the Company's Pension Plan shall be used to determine the lump sum amount. You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination or otherwise. 5. Certain Further Payments by the Corporation In the event that any amount or benefit paid or distributed to you pursuant to this Agreement, taken with any amounts or benefits otherwise paid or distributed to you by the Company or any affiliated company (collectively the "Covered Payments"), are or become subject to the tax (the "Excise Tax") imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, the Company shall pay to you at the time specified below an additional amount (the "Tax Reimbursement Payment") such that the net amount retained by you with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and Excise Tax on the Tax Reimbursement Payment provided for by this Section 5, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments. (i) For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax, (A) Such Covered Payments will be treated as "parachute payments" within the meaning of Section 280G of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the opinion of the Company's independent certified public accountants appointed prior to the date the Change of Control occurs or tax counsel selected by such accountants (the "Accountants"), such Covered Payments (in whole or in part) either do not constitute parachute payments or represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the "base amount", or such parachute payments are otherwise not subject to such Excise Tax, and (B) The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code. (ii) For purposes of determining the amount of the Tax Reimbursement Payment, you shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) Any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year. (iii)In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, you shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Tax Reimbursement Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is later determined to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payment with respect to such excess) at the time that the amount of such excess is finally determined. (iv) The Tax Reimbursement Payment (or portion thereof) provided for in this Section 5 shall be paid to you not later than ten (10) business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to you by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. In the event that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Corporation to you, payable on the fifth business day after written demand by the Company for payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 6. Term of Agreement This Agreement shall continue in effect so long as you are employed by the Company provided that, if a change of control of the Company, as defined in Section 2 hereof, shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of thirty-six (36) months beyond the month in which such change in control occurred. 7. Successor; Binding Agreement (i) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate. 8. Notice For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the President of the Company with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 9. Miscellaneous No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and such officer as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement; provided, however, that this Agreement shall not supersede or in any way limit the rights, duties or obligations you may have under any other written agreement with the Company. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New Jersey. 10. Validity The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 11. Tax Withholding The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 12. Counterparts This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 13. Arbitration Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, THE COMPANY By /s/Anthony D. Andora --------------------- Name: Anthony D. Andora Title: Chairman of the Board Agreed to this 8 day of June, 1995. /s/Robert N. Harris ------------------- Robert N. Harris Executive Vice President Chief Financial Officer Attest by: /s/Benjamin Rosenzweig ---------------------- Benjamin Rosenzweig, Secretary May 22, 1995 Mr. Frank R. Giancola 18 Franciscan Way Fair Lawn, NJ 07410 Dear Mr. Giancola: Interchange Financial Services Corporation, a New Jersey Bank Holding Company (the "Company"), considers the maintenance of a sound and vital executive team to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that the possibility of a change in control presently exists and may exist in the future, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of executives to the detriment of the Company and its stockholders. Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's executive team. This letter agreement sets forth the severance benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated subsequent to a "change in control of the Company" (as defined in Section 2 hereof) under the circumstances described below. 1. Company's Right to Terminate During the term of this Agreement, you agree that you will not voluntarily leave the employ of the Company except as may be permitted hereunder, and will continue to perform your regular duties as Senior Vice President of the Company. Notwithstanding the foregoing, the Company may terminate your employment at any time, subject to providing the benefits hereinafter specified in accordance with the terms hereof. 2. Change in Control No benefits shall be payable hereunder unless there shall have been a change in control of the Company, as set forth below, and your employment by the Company shall thereafter have been terminated in accordance with Section 3 below. For purposes of this Agreement, a "change in control of the Company" shall mean, unless the Board otherwise directs resolution approved by unanimous vote of the entire membership thereof adopted prior thereto, a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% control of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 3. Termination Following Change in Control If any of the events described in Section 2 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 4 hereof upon your subsequent termination, so long as such termination occurs within two (2) years after a change in control of the Company, unless such termination is (A) because of your death or Retirement, (B) by the Company for Cause or Disability or (c) by you other than for Good Reason. (i) Disability; Retirement (A) Termination by the Company of your employment based on "Disability" shall mean termination because of your absence from your duties with the Company on a full-time basis for 130 consecutive business days, as a result of your incapacity due to physical or mental illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given following such absence, you shall have returned to the full time performance of your duties; or (B) Termination by the Company or you of your employment based on "Retirement" shall mean your voluntary termination in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. (ii) Cause Termination by the Company of your employment for Cause shall mean your termination on account of: (A) Your willful commission of an act that causes or is reasonably likely to cause substantial damage to the Company; (B) Your commission of an act of fraud in the performance of your duties on behalf of the Company; (C) Your conviction for commission of a felony or other crime punishable by confinement for a period in excess of one (1) year in connection with the performance of your duties on behalf of the Company; or (D) The order of a federal or state bank regulatory agency or a court of competent jurisdiction requiring the termination of your employment. (iii) Good Reason Termination by you of your employment for "Good Reason" shall mean termination based on: (A) Subsequent to a change in control of the Company, and without your express written consent, the assignment to you of any duties inconsistent with your positions, duties, responsibilities and status with the Company immediately prior to a change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to a change in control, or any removal of you from or any failure to re-elect you to any of such positions, except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason; (B) Subsequent to a change in control of the Company, a reduction by the Company in your base salary as in effect on the date hereof or as the same may be increased from time to time; (C) Subsequent to a change in control of the Company, a failure by the Company to continue any bonus plans in which you are presently entitled to participate (the "Bonus Plans") as the same may be modified from time to time but substantially in the forms currently in effect, or a failure by the Company to continue you as a participant in the Bonus Plans on at least the same basis as you presently participate in accordance with the Bonus Plans; (D) Subsequent to a change in control of the Company and without your express written consent, the Company's requiring you to be based anywhere other than within thirty (30) miles of your present office location, except for required travel on the Company's business to an extent substantially consistent with your present business travel obligations; (E) Subsequent to change in control of the Company, the failure by the Company to continue in effect any benefit or compensation plan, stock ownership plan, stock purchase plan, stock option plan, life insurance plan, health-and-accident plan or disability plan in which you are participating at the time of a change in control of the Company (or plans providing you with substantially similar benefits), the taking of any action by the Company which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you at the time of the change in control, or the failure by the Company to provide you with the number of paid vacation days to which you are then entitled in accordance with the company's normal vacation policy in effect on the date hereof; (F) Subsequent to a change in control of the Company, the failure by the Company to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 6 hereof; or (G) Subsequent to a change in control of the Company, any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (iv) below (and, if applicable, paragraph (ii) above); and for purposes of this Agreement, no such purported termination shall be effective. (iv) Notice of Termination Any purported termination by the Company pursuant to paragraph (i) or (ii) above or by you pursuant to subparagraph (B) of paragraph (i) or paragraph (iii) above shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. (v) Date of Termination "Date of Termination" shall mean (A) if your employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period), (B) if your employment is terminated pursuant to paragraph (ii) above, the date specified in the Notice of Termination, and (C) if your employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction entered upon such arbitration award (the time of appeal therefrom having expired and no appeal having been perfected). 4. Certain Benefits Upon Termination If, after a change in control of the Company shall have occurred, as defined in Section 2 above, your employment by the Company shall be terminated (A) by the Company other than for Cause, Disability or Retirement or (B) by you for Good Reason, then you shall be entitled to the benefits provided below: (i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year and the portion of the current fiscal year ending on the Date of Termination which has not yet been awarded or paid to you under the Bonus Plans; (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you on the fifth day following the Date of Termination a lump sum amount equal to two (2) times your annual base salary at the highest rate in effect during the twelve (12) months immediately preceding the Date of Termination; (iii)The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement); (iv) The Company shall maintain in full force and effect, for your continued benefit until the earlier of (A) two (2) years after the Date of Termination or (B) your commencement of full time employment with a new employer, all life insurance, medical, health and accident, and disability plans, programs or arrangements in which you were entitled to participate immediately prior to the Date of Termination, provided that your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is barred, the Company shall arrange to provide you with benefits substantially similar to those which you are entitled to receive under such plans and programs. In addition, the Company shall pay you a lump sum amount of equivalent actuarial value to the additional pension benefit you would have earned under the Company's Pension Plan as in effect on the date the change of control occurs, but disregarding any Internal Revenue Code limitations pertaining to qualified plans, if you were granted at the time of your termination of employment two (2) additional years of Credited Service and deemed 2 years older under the Plan. In determining the equivalent actuarial value of the additional pension granted under this Section 4, an interest rate of 5% and the mortality table under the Company's Pension Plan shall be used to determine the lump sum amount. You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination or otherwise. 5. Certain Further Payments by the Corporation In the event that any amount or benefit paid or distributed to you pursuant to this Agreement, taken with any amounts or benefits otherwise paid or distributed to you by the Company or any affiliated company (collectively the "Covered Payments"), are or become subject to the tax (the "Excise Tax") imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, the Company shall pay to you at the time specified below an additional amount (the "Tax Reimbursement Payment") such that the net amount retained by you with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and Excise Tax on the Tax Reimbursement Payment provided for by this Section 5, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments. (i) For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax, (A) Such Covered Payments will be treated as "parachute payments" within the meaning of Section 280G of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the opinion of the Company's independent certified public accountants appointed prior to the date the Change of Control occurs or tax counsel selected by such accountants (the "Accountants"), such Covered Payments (in whole or in part) either do not constitute parachute payments or represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the "base amount", or such parachute payments are otherwise not subject to such Excise Tax, and (B) The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code. (ii) For purposes of determining the amount of the Tax Reimbursement Payment, you shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) Any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year. (iii)In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, you shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Tax Reimbursement Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is later determined to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payment with respect to such excess) at the time that the amount of such excess is finally determined. (iv) The Tax Reimbursement Payment (or portion thereof) provided for in this Section 5 shall be paid to you not later than ten (10) business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to you by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. In the event that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Corporation to you, payable on the fifth business day after written demand by the Company for payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 6. Term of Agreement This Agreement shall continue in effect so long as you are employed by the Company provided that, if a change of control of the Company, as defined in Section 2 hereof, shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of thirty-six (36) months beyond the month in which such change in control occurred. 7. Successor; Binding Agreement (i) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate. 8. Notice For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the President of the Company with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 9. Miscellaneous No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and such officer as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement; provided, however, that this Agreement shall not supersede or in any way limit the rights, duties or obligations you may have under any other written agreement with the Company. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New Jersey. 10. Validity The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 11. Tax Withholding The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 12. Counterparts This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 13. Arbitration Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, THE COMPANY By /s/Anthony D. Andora -------------------- Name:Anthony D. Andora Title:Chairman of the Board Agreed to this 2 day of June, 1995. /s/Frank R. Giancola ---------------------------------- Frank R. Giancola, Sr. Vice President Attest by: /s/Benjamin Rosenzweig ---------------------- Benjamin Rosenzweig, Secretary May 22, 1995 Mr. Richard N. Latrenta 405 Tenafly Road Englewood, NJ 07631 Dear Mr. Latrenta: Interchange Financial Services Corporation, a New Jersey Bank Holding Company (the "Company"), considers the maintenance of a sound and vital executive team to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that the possibility of a change in control presently exists and may exist in the future, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of executives to the detriment of the Company and its stockholders. Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's executive team. This letter agreement sets forth the severance benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated subsequent to a "change in control of the Company" (as defined in Section 2 hereof) under the circumstances described below. 1. Company's Right to Terminate During the term of this Agreement, you agree that you will not voluntarily leave the employ of the Company except as may be permitted hereunder, and will continue to perform your regular duties as Senior Vice President of the Company. Notwithstanding the foregoing, the Company may terminate your employment at any time, subject to providing the benefits hereinafter specified in accordance with the terms hereof. 2. Change in Control No benefits shall be payable hereunder unless there shall have been a change in control of the Company, as set forth below, and your employment by the Company shall thereafter have been terminated in accordance with Section 3 below. For purposes of this Agreement, a "change in control of the Company" shall mean, unless the Board otherwise directs resolution approved by unanimous vote of the entire membership thereof adopted prior thereto, a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% control of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 3. Termination Following Change in Control If any of the events described in Section 2 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 4 hereof upon your subsequent termination, so long as such termination occurs within two (2) years after a change in control of the Company, unless such termination is (A) because of your death or Retirement, (B) by the Company for Cause or Disability or (c) by you other than for Good Reason. (i) Disability; Retirement (A) Termination by the Company of your employment based on "Disability" shall mean termination because of your absence from your duties with the Company on a full-time basis for 130 consecutive business days, as a result of your incapacity due to physical or mental illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given following such absence, you shall have returned to the full time performance of your duties; or (B) Termination by the Company or you of your employment based on "Retirement" shall mean your voluntary termination in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. (ii) Cause Termination by the Company of your employment for Cause shall mean your termination on account of: (A) Your willful commission of an act that causes or is reasonably likely to cause substantial damage to the Company; (B) Your commission of an act of fraud in the performance of your duties on behalf of the Company; (C) Your conviction for commission of a felony or other crime punishable by confinement for a period in excess of one (1) year in connection with the performance of your duties on behalf of the Company; or (D) The order of a federal or state bank regulatory agency or a court of competent jurisdiction requiring the termination of your employment. (iii) Good Reason Termination by you of your employment for "Good Reason" shall mean termination based on: (A) Subsequent to a change in control of the Company, and without your express written consent, the assignment to you of any duties inconsistent with your positions, duties, responsibilities and status with the Company immediately prior to a change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to a change in control, or any removal of you from or any failure to re-elect you to any of such positions, except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason; (B) Subsequent to a change in control of the Company, a reduction by the Company in your base salary as in effect on the date hereof or as the same may be increased from time to time; (C) Subsequent to a change in control of the Company, a failure by the Company to continue any bonus plans in which you are presently entitled to participate (the "Bonus Plans") as the same may be modified from time to time but substantially in the forms currently in effect, or a failure by the Company to continue you as a participant in the Bonus Plans on at least the same basis as you presently participate in accordance with the Bonus Plans; (D) Subsequent to a change in control of the Company and without your express written consent, the Company's requiring you to be based anywhere other than within thirty (30) miles of your present office location, except for required travel on the Company's business to an extent substantially consistent with your present business travel obligations; (E) Subsequent to change in control of the Company, the failure by the Company to continue in effect any benefit or compensation plan, stock ownership plan, stock purchase plan, stock option plan, life insurance plan, health-and-accident plan or disability plan in which you are participating at the time of a change in control of the Company (or plans providing you with substantially similar benefits), the taking of any action by the Company which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you at the time of the change in control, or the failure by the Company to provide you with the number of paid vacation days to which you are then entitled in accordance with the company's normal vacation policy in effect on the date hereof; (F) Subsequent to a change in control of the Company, the failure by the Company to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 6 hereof; or (G) Subsequent to a change in control of the Company, any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (iv) below (and, if applicable, paragraph (ii) above); and for purposes of this Agreement, no such purported termination shall be effective. (iv) Notice of Termination Any purported termination by the Company pursuant to paragraph (i) or (ii) above or by you pursuant to subparagraph (B) of paragraph (i) or paragraph (iii) above shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. (v) Date of Termination "Date of Termination" shall mean (A) if your employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period), (B) if your employment is terminated pursuant to paragraph (ii) above, the date specified in the Notice of Termination, and (C) if your employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction entered upon such arbitration award (the time of appeal therefrom having expired and no appeal having been perfected). 4. Certain Benefits Upon Termination If, after a change in control of the Company shall have occurred, as defined in Section 2 above, your employment by the Company shall be terminated (A) by the Company other than for Cause, Disability or Retirement or (B) by you for Good Reason, then you shall be entitled to the benefits provided below: (i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year and the portion of the current fiscal year ending on the Date of Termination which has not yet been awarded or paid to you under the Bonus Plans; (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you on the fifth day following the Date of Termination a lump sum amount equal to two (2) times your annual base salary at the highest rate in effect during the twelve (12) months immediately preceding the Date of Termination; (iii)The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement); (iv) The Company shall maintain in full force and effect, for your continued benefit until the earlier of (A) two (2) years after the Date of Termination or (B) your commencement of full time employment with a new employer, all life insurance, medical, health and accident, and disability plans, programs or arrangements in which you were entitled to participate immediately prior to the Date of Termination, provided that your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is barred, the Company shall arrange to provide you with benefits substantially similar to those which you are entitled to receive under such plans and programs. In addition, the Company shall pay you a lump sum amount of equivalent actuarial value to the additional pension benefit you would have earned under the Company's Pension Plan as in effect on the date the change of control occurs, but disregarding any Internal Revenue Code limitations pertaining to qualified plans, if you were granted at the time of your termination of employment two (2) additional years of Credited Service and deemed 2 years older under the Plan. In determining the equivalent actuarial value of the additional pension granted under this Section 4, an interest rate of 5% and the mortality table under the Company's Pension Plan shall be used to determine the lump sum amount. You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination or otherwise. 5. Certain Further Payments by the Corporation In the event that any amount or benefit paid or distributed to you pursuant to this Agreement, taken with any amounts or benefits otherwise paid or distributed to you by the Company or any affiliated company (collectively the "Covered Payments"), are or become subject to the tax (the "Excise Tax") imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, the Company shall pay to you at the time specified below an additional amount (the "Tax Reimbursement Payment") such that the net amount retained by you with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and Excise Tax on the Tax Reimbursement Payment provided for by this Section 5, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments. (i) For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax, (A) Such Covered Payments will be treated as "parachute payments" within the meaning of Section 280G of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the opinion of the Company's independent certified public accountants appointed prior to the date the Change of Control occurs or tax counsel selected by such accountants (the "Accountants"), such Covered Payments (in whole or in part) either do not constitute parachute payments or represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the "base amount", or such parachute payments are otherwise not subject to such Excise Tax, and (B) The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code. (ii) For purposes of determining the amount of the Tax Reimbursement Payment, you shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) Any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year. (iii)In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, you shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Tax Reimbursement Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is later determined to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payment with respect to such excess) at the time that the amount of such excess is finally determined. (iv) The Tax Reimbursement Payment (or portion thereof) provided for in this Section 5 shall be paid to you not later than ten (10) business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to you by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. In the event that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Corporation to you, payable on the fifth business day after written demand by the Company for payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 6. Term of Agreement This Agreement shall continue in effect so long as you are employed by the Company provided that, if a change of control of the Company, as defined in Section 2 hereof, shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of thirty-six (36) months beyond the month in which such change in control occurred. 7. Successor; Binding Agreement (i) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate. 8. Notice For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the President of the Company with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 9. Miscellaneous No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and such officer as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement; provided, however, that this Agreement shall not supersede or in any way limit the rights, duties or obligations you may have under any other written agreement with the Company. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New Jersey. 10. Validity The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 11. Tax Withholding The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 12. Counterparts This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 13. Arbitration Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, THE COMPANY By /s/Anthony D. Andora ------------------- Name: Anthony D. Andora Title: Chairman of the Board Agreed to this 8 day of June, 1995. /s/Richard N. Latrenta ---------------------- Richard N. Latrenta, Sr. Vice President Sr. LoanOffice Attest by: /s/Benjamin Rosenzweig ----------------------- Benjamin Rosenzweig, Secretary EX-11 3 COMPUTATION OF PER SHARE EARNINGS Exhibit 11 Computation of Per Share Earnings (in thousands, except per share data)
Three months ended Six months ended June 30, June 30, ----------------------- ------------------- 1995 1994 1995 1994 ---- ---- ---- ---- Net income $ 1,565 $ 1,409 $2,970 $ 2,580 Preferred dividend requirements $ (28) $ (28) $ (57) $ (56) Weighted average common shares outstanding 2,697 2,697 2,697 2,697 ----- ----- ----- ----- Net income per common share $ 0.57 $ 0.51 1.08 0.94 ======= ====== ==== ====
EX-27 4
9 1,000 6-MOS Dec-31-1995 Jun-30-1995 22,367 0 13,900 0 30,637 115,789 116,542 287,982 3,849 483,443 432,042 7,100 3,477 2,500 4,495 0 5,000 28,829 483,443 13,490 4,665 189 18,344 7,083 7,452 10,892 600 15 7,940 4,481 2,970 0 0 2,970 1.080 1.080 4.859 4,652 0 468 0 3,839 647 57 3,849 3,085 0 764