Exhibit 10.16

 

OCEANFIRST BANK

EMPLOYMENT AGREEMENT

 

This AGREEMENT is made effective as of February 18, 2004 by and among OceanFirst
Bank (the “Bank”), a federally chartered savings institution, with its principal
administrative office at 975 Hooper Avenue, Toms River, New Jersey 08753,
OceanFirst Financial Corp., a corporation organized under the laws of the State
of Delaware, the holding company for the Bank (the “Holding Company”), and
Robert M. Pardes (“Executive”).

 

WHEREAS, the Bank wishes to assure itself of the services of Executive for the
period provided in this Agreement; and

 

WHEREAS, Executive is willing to serve in the employ of the Bank on a full-time
basis for said period.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

 

1. POSITION AND RESPONSIBILITIES.

 

During the period of his employment hereunder, Executive agrees to serve as
Executive Vice President and Chief Lending Officer of the Bank. Executive shall
render administrative and management services to the Bank such as are
customarily performed by persons situated in a similar executive capacity.
During said period, Executive also agrees to serve if elected, as an officer and
director of the Holding Company or any other subsidiary of the Bank.

 

2. TERMS AND DUTIES.

 

(a) The period of Executive’s employment under this Agreement shall be deemed to
have commenced as of the date first above written and shall continue for a
period of thirty-six (36) full calendar months thereafter. Commencing on the
first anniversary date of this Agreement, and continuing on each anniversary
thereafter, the disinterested members of the board of directors of the Bank
(“Board”) may extend the Agreement an additional year such that the remaining
term of the Agreement shall be three (3) years unless the Executive elects not
to extend the term of this Agreement by giving written notice in accordance with
Section 8 of this Agreement. The Board will review the Agreement and Executive’s
performance annually for purposes of determining whether to extend the Agreement
and the rationale and results thereof shall be included in the minutes of the
Board’s meeting. The Board shall give notice to the Executive as soon as
possible after such review as to whether the Agreement is to be extended.

 

(b) During the period of Executive’s employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote a sufficient amount of his business
time, attention, skill, and efforts to the faithful performance of his duties
hereunder including activities and services related to the organization,
operation and management of the Bank and participation in community and civic
organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve, on the boards of directors of, and hold any other offices
or positions in, companies or organizations, which, in such Board’s judgment,
will not present any conflict of interest with the Bank, or materially affect
the performance of Executive’s duties pursuant to this Agreement.

 

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(c) Notwithstanding anything herein to the contrary, Executive’s employment with
the Bank may be terminated by the Bank or the Executive during the term of this
Agreement, subject to the terms and conditions of this Agreement.

 

3. COMPENSATION AND REIMBURSEMENT.

 

(a) The Bank shall pay Executive as compensation a salary of $203,000 per year
(“Base Salary”). Base Salary shall include any amounts of compensation deferred
by Executive under any qualified or unqualified plan maintained by the Bank.
Such Base Salary shall be payable bi-weekly. During the period of this
Agreement, Executive’s Base Salary shall be reviewed at least annually; the
first such review will be made no later than one year from the date of this
Agreement. Such review shall be conducted by the Board or by a Committee of the
Board, delegated such responsibility by the Board. The Committee or the Board
may increase Executive’s Base Salary. Any increase in Base Salary shall become
the “Base Salary” for purposes of this Agreement. In addition to the Base Salary
provided in this Section 3(a), the Bank shall also provide Executive, at no
premium cost to Executive, with all such other benefits as are provided
uniformly to permanent full-time employees of the Bank.

 

(b) The Executive shall be entitled to participate in any employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Bank will not, without
Executive’s prior written consent, make any changes in such plans, arrangements
or perquisites which would materially adversely affect Executive’s rights or
benefits thereunder; except to the extent such changes are made applicable to
all Bank employees on a non-discriminatory basis. Without limiting the
generality of the foregoing provisions of this Subsection (b), Executive shall
be entitled to participate in or receive benefits under any employee benefit
plans including but not limited to, retirement plans, supplemental retirement
plans, pension plans, profit-sharing plans, health-and-accident plans, medical
coverage or any other employee benefit plan or arrangement made available by the
Bank in the future to its senior executives and key management employees,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Executive shall be entitled to
incentive compensation and bonuses as provided in any plan of the Bank in which
Executive is eligible to participate. Nothing paid to the Executive under any
such plan or arrangement will be deemed to be in lieu of other compensation to
which the Executive is entitled under this Agreement.

 

(c) In addition to the Base Salary provided for by paragraph (a) of this Section
3 and other compensation provided for by paragraph (b) of this Section 3, the
Bank shall pay or reimburse Executive for all reasonable travel and other
reasonable expenses incurred in the performance of Executive’s obligations under
this Agreement and may provide such additional compensation in such form and
such amounts as the Board may from time to time determine.

 

4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

 

(a) Upon the occurrence of an Event of Termination (as herein defined) during
the Executive’s term of employment under this Agreement, the provisions of this
Section shall apply. As used in this Agreement, an “Event of Termination” shall
mean and include any one or more of the following: (i) the termination by the
Bank or the Holding Company of Executive’s full-time employment hereunder for
any reason other than a termination governed by Section 5(a) hereof, or
Termination for Cause, as defined in Section 7 hereof; (ii) Executive’s
resignation from the Bank’s employ upon any (A) failure to elect or reelect or
to appoint or reappoint Executive as Executive Vice President and Chief Lending
Officer, unless consented to by the Executive, (B) a material change in
Executive’s function, duties, or responsibilities, which change would cause

 

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Executive’s position to become one of lesser responsibility, importance, or
scope from the position and attributes thereof described in Section 1, above,
unless consented to by Executive, (C) a relocation of Executive’s principal
place of employment by more than 25 miles from its location at the effective
date of this Agreement, unless consented to by the Executive, (D) a material
reduction in the benefits and perquisites to the Executive from those being
provided as of the effective date of this Agreement, unless consented to by the
Executive, or (E) a liquidation or dissolution of the Bank or Holding Company,
or (F) breach of this Agreement by the Bank. Upon the occurrence of any event
described in clauses (A), (B), (C), (D), (E) or (F), above, Executive shall have
the right to elect to terminate his employment under this Agreement by
resignation upon not less than sixty (60) days prior written notice given within
six full months after the event giving rise to said right to elect.

 

(b) Upon the occurrence of an Event of Termination, on the Date of Termination,
as defined in Section 8, the Bank shall be obligated to pay Executive, or, in
the event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be an amount equal to the sum of: (i) the amount of the
remaining payments that the Executive would have earned if he had continued his
employment with the Bank during the remaining term of this Agreement at the
Executive’s Base Salary at the Date of Termination; and (ii) the amount equal to
the annual contributions that would have been made on Executive’s behalf to any
employee benefit plans of the Bank or the Holding Company during the remaining
term of this Agreement based on contributions made (on an annualized basis) at
the Date of Termination; provided, however, that any payments pursuant to this
subsection and subsection 4(c) below, shall not, in the aggregate, exceed three
times Executive’s average annual compensation for the five most recent taxable
years that Executive has been employed by the Bank or such lesser number of
years in the event that Executive shall have been employed by the Bank for less
than five years. In the event the Bank is not in compliance with its minimum
capital requirements or if such payments pursuant to this subsection (b) would
cause the Bank’s capital to be reduced below its minimum regulatory capital
requirements, such payments shall be deferred until such time as the Bank or
successor thereto is in capital compliance. At the election of the Executive,
which election is to be made prior to an Event of Termination, such payments
shall be made in a lump sum as of the Executive’s Date of Termination. In the
event that no election is made, payment to Executive will be made on a monthly
basis in approximately equal installments during the remaining term of the
Agreement. Such payments shall not be reduced in the event the Executive obtains
other employment following termination of employment.

 

(c) Upon the occurrence of an Event of Termination, the Bank will cause to be
continued life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Bank or the Holding Company for Executive
prior to his termination at no premium cost to the Executive, except to the
extent such coverage may be changed in its application to all Bank or Holding
Company employees. Such coverage shall cease upon the expiration of the
remaining term of this Agreement.

 

5. CHANGE IN CONTROL.

 

(a) For purposes of this Agreement, a “Change in Control” of the Bank or Holding
Company shall mean an event of a nature that: (i) would be required to be
reported in response to Item 1 of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”); or (ii) results in a Change in
Control of the Bank or the Holding Company within the meaning of the Home
Owners’ Loan Act of 1933, as amended, the Federal Deposit Insurance Act or the
Rules and Regulations promulgated by the Office of Thrift Supervision (“OTS”)
(or its predecessor agency), as in effect on the date hereof (provided, that in
applying the definition of change in control as set forth under the rules and
regulations of the OTS, the Board shall substitute its judgment for that of the
OTS); or (iii) without limitation such a Change in Control shall be deemed to
have occurred

 

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at such time as (A) any “person” (as the 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 voting securities
of the Bank or the Holding Company representing 25% or more of the Bank’s or the
Holding Company’s outstanding voting securities or right to acquire such
securities except for any voting securities of the Bank purchased by the Holding
Company and any voting securities purchased by any employee benefit plan of the
Bank or the Holding Company, or (B) individuals who constitute the Board on the
date hereof (the “Incumbent Board”) cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board, or whose nomination for
election by the Holding Company’s stockholders was approved by the same
Nominating Committee serving under an Incumbent Board, shall be, for purposes of
this clause (B), considered as though he were a member of the Incumbent Board,
or (C) a plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Bank or the Holding Company or similar
transaction occurs in which the Bank or Holding Company is not the resulting
entity; provided, however, that such an event listed above will be deemed to
have occurred or to have been effectuated upon the receipt of all required
regulatory approvals not including the lapse of any statutory waiting periods.

 

(b) If a Change in Control has occurred pursuant to Section 5(a) or the Board
has determined that a Change in Control has occurred, Executive shall be
entitled to the benefits provided in paragraphs (c), and (d) of this Section 5
upon his subsequent termination of employment at any time during the term of
this Agreement due to: (1) Executive’s dismissal or (2) Executive’s voluntary
resignation following any demotion, loss of title, office or significant
authority or responsibility, material reduction in annual compensation or
benefits or relocation of his principal place of employment by more than 25
miles from its location immediately prior to the Change in Control, unless such
termination is because of his death or termination for Cause.

 

(c) Upon Executive’s entitlement to benefits pursuant to Section 5(b), the Bank
shall pay Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a sum equal to the greater of:
(1) the payments due for the remaining term of the Agreement; or 2) three (3)
times Executive’s average annual compensation for the five (5) most recent
taxable years that Executive has been employed by the Bank or such lesser number
of years in the event that Executive shall have been employed by the Bank for
less than five (5) years. Such average annual compensation shall include Base
Salary, commissions, bonuses, contributions on Executive’s behalf to any pension
and/or profit sharing plan, severance payments, retirement payments, directors
or committee fees, fringe benefits paid or to be paid to the Executive in any
such year, and payment of expense items without accountability or business
purpose or that do not meet the IRS requirements for deductibility by the
Institution; provided however, that any payment under this provision and
subsection 5(d) below shall not exceed three (3) times the Executive’s average
annual compensation. In the event the Bank is not in compliance with its minimum
capital requirements or if such payments would cause the Bank’s capital to be
reduced below its minimum regulatory capital requirements, such payments shall
be deferred until such time as the Bank or successor thereto is in capital
compliance. At the election of the Executive, which election is to be made prior
to a Change in Control, such payment shall be made in a lump sum as of the
Executive’s Date of Termination. In the event that no election is made, payment
to the Executive will be made in approximately equal installments on a monthly
basis over a period of thirty-six (36) months following the Executive’s
termination. Such payments shall not be reduced in the event Executive obtains
other employment following termination of employment.

 

(d) Upon the Executive’s entitlement to benefits pursuant to Section 5(b), the
Bank will cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Bank for Executive
prior to his severance at no premium cost to the

 

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Executive, except to the extent that such coverage may be changed in its
application for all Bank employees on a non-discriminatory basis. Such coverage
and payments shall cease upon the expiration of thirty-six (36) months following
the Date of Termination.

 

6. CHANGE OF CONTROL RELATED PROVISIONS

 

Notwithstanding the provisions of Section 5, in no event shall the aggregate
payments or benefits to be made or afforded to Executive under said paragraphs
(the “Termination Benefits”) constitute an “excess parachute payment” under
Section 280G of the Code or any successor thereto, and in order to avoid such a
result, Termination Benefits will be reduced, if necessary, to an amount (the
“Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an
amount equal to three (3) times Executive’s “base amount”, as determined in
accordance with said Section 280G. The allocation of the reduction required
hereby among the Termination Benefits provided by Section 5 shall be determined
by Executive.

 

7. TERMINATION FOR CAUSE.

 

The term “Termination for Cause” shall mean termination because of Executive’s
personal dishonesty, incompetence, willful misconduct, any breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order or material breach of any
provision of this Agreement. Notwithstanding the foregoing, Executive shall not
be deemed to have been Terminated for Cause unless and until there shall have
been delivered to him a Notice of Termination which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the members of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to Executive and an opportunity for him,
together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. During the period beginning on the date
of the Notice of Termination for Cause pursuant to Section 8 hereof through the
Date of Termination for Cause, stock options and related limited rights granted
to Executive under any stock option plan shall not be exercisable, nor shall any
unvested awards granted to Executive under any stock benefit plan of the Bank,
the Holding Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination for Cause, such stock options and related limited rights and such
unvested awards shall become null and void and shall not be exercisable by or
delivered to Executive at any time subsequent to such Termination for Cause.

 

8. NOTICE.

 

(a) Any purported termination by the Bank or by Executive shall be communicated
by Notice of Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a written 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 Executive’s employment under the provision so
indicated.

 

(b) “Date of Termination” shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty days from the date such Notice of Termination is given.).

 

(c) 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,

 

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either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected) and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, in the
event the Executive is terminated for reasons other than Termination for Cause
the Bank will continue to pay Executive his Base Salary in effect when the
notice giving rise to the dispute was given until the earlier of: 1) the
resolution of the dispute in accordance with this Agreement or 2) the expiration
of the remaining term of this Agreement as determined as of the Date of
Termination. Amounts paid under this Section are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.

 

9. POST-TERMINATION OBLIGATIONS.

 

All payments and benefits to Executive under this Agreement shall be subject to
Executive’s compliance with this Section 9 for one (1) full year after the
earlier of the expiration of this Agreement or termination of Executive’s
employment with the Bank. Executive shall, upon reasonable notice, furnish such
information and assistance to the Bank as may reasonably be required by the Bank
in connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.

 

10. NON-COMPETITION.

 

(a) Upon any termination of Executive’s employment hereunder pursuant to Section
4 hereof, Executive agrees not to compete with the Bank for a period of one (1)
year following such termination in any city, town or county in which the
Executive’s normal business office is located and the Bank has an office or has
filed an application for regulatory approval to establish an office, determined
as of the effective date of such termination, except as agreed to pursuant to a
resolution duly adopted by the Board. Executive agrees that during such period
and within said cities, towns and counties, Executive shall not work for or
advise, consult or otherwise serve with, directly or indirectly, any entity
whose business materially competes with the depository, lending or other
business activities of the Bank. The parties hereto, recognizing that
irreparable injury will result to the Bank, its business and property in the
event of Executive’s breach of this Subsection 10(a) agree that in the event of
any such breach by Executive, the Bank will be entitled, in addition to any
other remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive’s partners, agents, servants, employees and all
persons acting for or under the direction of Executive. Nothing herein will be
construed as prohibiting the Bank from pursuing any other remedies available to
the Bank for such breach or threatened breach, including the recovery of damages
from Executive.

 

(b) Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Bank and affiliates thereof,
as it may exist from time to time, is a valuable, special and unique asset of
the business of the Bank. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever.
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Bank. Further,
Executive may disclose information regarding the business activities of the Bank
to the OTS and the Federal Deposit Insurance Corporation (“FDIC”) pursuant to a
formal regulatory request. In the event of a breach or threatened breach by
Executive of the provisions of this Section, the Bank will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or

 

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considered business activities of the Bank or affiliates thereof, or from
rendering any services to any person, firm, corporation, other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein will be construed as prohibiting the Bank from
pursuing any other remedies available to the Bank for such breach or threatened
breach, including the recovery of damages from Executive.

 

11. SOURCE OF PAYMENTS.

 

All payments provided in this Agreement shall be timely paid in cash or check
from the general funds of the Bank. The Holding Company, however,
unconditionally guarantees payment and provision of all amounts and benefits due
hereunder to Executive and, if such amounts and benefits due from the Bank are
not timely paid or provided by the Bank, such amounts and benefits shall be paid
or provided by the Holding Company.

 

12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 

This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Bank or its subsidiaries
or any predecessor of the Bank and Executive, except that this Agreement shall
not affect or operate to reduce any benefit or compensation inuring to Executive
of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.

 

13. NO ATTACHMENT.

 

(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to affect any such action shall be null, void, and of
no effect.

 

(b) This Agreement shall be binding upon, and inure to the benefit of, Executive
and the Bank and their respective successors and assigns.

 

14. MODIFICATION AND WAIVER.

 

(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.

 

(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.

 

15. REQUIRED PROVISIONS.

 

(a) The Bank may terminate Executive’s employment at any time, but any
termination by the Bank, other than Termination for Cause, shall not prejudice
Executive’s right to compensation or other benefits under this Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 7 hereinabove.

 

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(b) If Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
§1818(e)(3) or (g)(1), the Bank’s obligations under this contract shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion: (i)
pay Executive all or part of the compensation withheld while their contract
obligations were suspended; and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.

 

(c) If Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1),
all obligations of the Bank under this contract shall terminate as of the
effective date of the order, but vested rights of the contracting parties shall
not be affected.

 

(d) If the Bank is in default as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bank under
this contract shall terminate as of the date of default, but this paragraph
shall not affect any vested rights of the contracting parties.

 

(e) All obligations of the Bank under this contract shall be terminated, except
to the extent determined that continuation of the contract is necessary for the
continued operation of the institution: (i) by the Director of the OTS (or his
designee) or FDIC, at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Section
13(c) of the Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or (ii) by the
Director of the OTS (or his designee) at the time the Director (or his designee)
approves a supervisory merger to resolve problems related to the operations of
the Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

 

(f) Any payments made to Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and 12 C.F.R.
§545.121 and any rules and regulations promulgated thereunder.

 

16. REINSTATEMENT OF BENEFITS UNDER SECTION 15(b).

 

In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice described in
Section 15(b) hereof (the “Notice”) during the term of this Agreement and a
Change in Control, as defined herein, occurs, the Bank will assume its
obligation to pay and Executive will be entitled to receive all of the
termination benefits provided for under Section 5 of this Agreement upon the
Bank’s receipt of a dismissal of charges in the Notice.

 

17. SEVERABILITY.

 

If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

 

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18. HEADINGS FOR REFERENCE ONLY.

 

The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

 

19. GOVERNING LAW.

 

The validity, interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of New Jersey, but only to the extent
not superseded by federal law.

 

20. ARBITRATION.

 

Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by Executive within fifty (50) miles
from the location of the Bank, 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; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

 

In the event any dispute or controversy arising under or in connection with
Executive’s termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all
back-pay, including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under this Agreement.

 

21. PAYMENT OF COSTS AND LEGAL FEES.

 

All reasonable costs and legal fees paid or incurred by Executive pursuant to
any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by the Bank if Executive is successful on the merits pursuant
to a legal judgment, arbitration or settlement.

 

22. INDEMNIFICATION.

 

(a) The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors’ and officers’
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) as permitted under federal law against
all expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been a director or officer of the Bank (whether or not he
continues to be a director or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys’ fees and the cost of reasonable
settlements.

 

(b) Any payments made to Executive pursuant to this Section are subject to and
conditioned upon compliance with 12 C.F.R.§ 545.121 and any rules or regulations
promulgated thereunder.

 

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23. SUCCESSOR TO THE BANK.

 

The Bank shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Bank or the Holding Company, expressly and
unconditionally to assume and agree to perform the Bank’s obligations under this
Agreement, in the same manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had taken place.

 

SIGNATURES

 

IN WITNESS WHEREOF, OceanFirst Bank and OceanFirst Financial Corp. have caused
this Agreement to be executed and their seals to be affixed hereunto by their
duly authorized officers and directors, and Executive has signed this Agreement,
on the 18th day of February, 2004.

 

ATTEST:

     

OCEANFIRST BANK

        By:    

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Secretary

         

Entire Board of Directors

 

[SEAL]

 

ATTEST:

     

OCEANFIRST FINANCIAL CORP.

            (Guarantor)

        By:    

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Secretary

         

Entire Board of Directors

 

[SEAL]

 

WITNESS:

                     

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Executive