Exhibit 10.1

 

PROPOSED FORM OF

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (the “Agreement”), made this 21st day of December, 2004, by and
between OCEAN SHORE HOLDING CO., a federally chartered corporation (the
“Company”), OCEAN CITY HOME BANK, a federally chartered savings association (the
“Bank”), and STEVEN E. BRADY (the “Executive”).

 

WHEREAS, Executive serves in a position of substantial responsibility;

 

WHEREAS, the Company and the Bank wish to assure 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. Employment. Executive is employed as the President and Chief Executive
Officer of the Company and the Bank. Executive shall perform all duties and
shall have all powers which are commonly incident to the offices of President
and Chief Executive Officer or which, consistent with those offices, are
delegated to him by the Board of Directors of the Bank or the Company. During
the term of this Agreement, Executive also agrees to serve, if elected, as an
officer and/or director of any subsidiary of the Company and the Bank and in
such capacity will carry out such duties and responsibilities reasonably
appropriate to that office.

 

2. Location and Facilities. Executive will be furnished with the working
facilities and staff customary for executive officers with the title and duties
set forth in Section 1 and as are necessary for him to perform his duties. The
location of such facilities and staff shall be at the principal administrative
offices of the Company and the Bank, or at such other site or sites customary
for such offices.

 

3. Term.

 

  a. The term of this Agreement shall be (i) the initial term, consisting of the
period commencing on the date of this Agreement (the “Effective Date”) and
ending on the third anniversary of the Effective Date, plus (ii) any and all
extensions of the initial term made pursuant to this Section 3.

 

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  b. Commencing on the first year anniversary date of this Agreement, and
continuing on each anniversary thereafter, the disinterested members of the
boards of directors of the Bank and the Company may extend the Agreement an
additional year such that the remaining term of the Agreement shall be
thirty-six (36) months, unless Executive elects not to extend the term of this
Agreement by giving written notice in accordance with Section 19 of this
Agreement. The Board of Directors of the Bank (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 of Directors of the
Bank shall give notice to Executive as soon as possible after such review as to
whether the Agreement is to be extended.

 

4. Base Compensation.

 

  a. The Company and the Bank agree to pay Executive during the term of this
Agreement a base salary at the rate of $325,000 per year, payable in accordance
with customary payroll practices.

 

  b. The Board shall review annually the rate of Executive’s base salary based
upon factors they deem relevant, and may maintain or increase his salary,
provided that no such action shall reduce the rate of salary below the rate in
effect on the Effective Date.

 

  c. In the absence of action by the Board, Executive shall continue to receive
salary at the annual rate specified on the Effective Date or, if another rate
has been established under the provisions of this Section 4, the rate last
properly established by action of the Board under the provisions of this Section
4.

 

5. Bonuses. Executive shall be entitled to participate in discretionary bonuses
or other incentive compensation programs that the Company and the Bank may award
from time to time to senior management employees pursuant to bonus plans or
otherwise.

 

6. Benefit Plans. Executive shall be entitled to participate in such life
insurance, medical, dental, pension, profit sharing, retirement and stock-based
compensation plans and other programs and arrangements as may be approved from
time to time by the Company and the Bank for the benefit of their employees.

 

7. Vacation and Leave.

 

  a. Executive shall be entitled to vacations and other leave in accordance with
policy for senior executives, or otherwise as approved by the Board.

 

  b.

In addition to paid vacations and other leave, Executive shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of his
employment for such

 

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additional periods of time and for such valid and legitimate reasons as the
Board may, in its discretion, determine. Further, the Board may grant to
Executive a leave or leaves of absence, with or without pay, at such time or
times and upon such terms and conditions as the Board in its discretion may
determine.

 

8. Expense Payments, Reimbursements and Memberships.

 

  a. Executive shall be reimbursed for all reasonable out-of-pocket business
expenses that he shall incur in connection with his services under this
Agreement upon substantiation of such expenses in accordance with applicable
policies of the Company and the Bank.

 

  b. The Bank shall continue to pay the annual dues for a golf membership for
Executive (in his own name) at Hidden Creek Golf Club in Egg Harbor Township,
New Jersey (“Golf Membership”). Executive shall use the membership to further
the best interests of the Bank. The Membership Deposit, in the amount of
$31,000, has been paid by the Bank and Executive vests in one-eighth of the
refundable portion of the Membership Deposit over a period of eight (8) years
ending in 2009. In the event Executive ceases being a member of Hidden Creek
Golf Club prior to the end of 2009, the refundable portion of the Membership
Deposit shall be apportioned between the Bank and Executive with Executive’s
share calculated at $3,100 per year for each year that has elapsed since 2002.
In the event of termination of Executive by the Bank prior to the end of 2009,
Executive shall have the option of terminating his Golf Membership or continuing
this Golf Membership. In the event Executive opts to terminate his Golf
Membership, the refundable Membership Deposit shall be apportioned between the
Bank and Executive with Executive’s share calculated at $3,100 per year for each
year that has elapsed since 2002. In the event Executive opts to continue his
Golf Membership, Executive shall be entitled to the entire Membership Deposit.
Executive shall reimburse the Bank $3,100 per year for each post-2001 year
between the year of termination and 2009. In addition, the Bank shall provide
Executive with a health club membership.

 

9. Automobile Allowance. During the term of this Agreement, Executive shall be
entitled to an automobile allowance on terms no less favorable that those in
effect immediately prior to the execution of this Agreement. Executive shall
comply with reasonable reporting and expense limitations on the use of such
automobile as may be established by the Company or the Bank from time to time,
and the Company or the Bank shall annually include on Executive’s Form W-2 any
amount of income attributable to Executive’s personal use of such automobile.

 

10. Loyalty and Confidentiality.

 

  a.

During the term of this Agreement Executive: (i) shall devote all his time,
attention, skill, and efforts to the faithful performance of his duties
hereunder; provided, however, that from time to time, Executive may serve on the
boards of directors of, and hold any other offices or positions in, companies or
organizations which will not

 

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present any conflict of interest with the Company and the Bank or any of their
subsidiaries or affiliates, unfavorably affect the performance of Executive’s
duties pursuant to this Agreement, or violate any applicable statute or
regulation and (ii) shall not engage in any business or activity contrary to the
business affairs or interests of the Company and the Bank.

 

  b. Nothing contained in this Agreement shall prevent or limit Executive’s
right to invest in the capital stock or other securities of any business
dissimilar from that of the Company and the Bank, or, solely as a passive,
minority investor, in any business.

 

  c. Executive agrees to maintain the confidentiality of any and all information
concerning the operation or financial status of the Company and the Bank; the
names or addresses of any of its borrowers, depositors and other customers; any
information concerning or obtained from such customers; and any other
information concerning the Company and the Bank to which he may be exposed
during the course of his employment. Executive further agrees that, unless
required by law or specifically permitted by the Board in writing, he will not
disclose to any person or entity, either during or subsequent to his employment,
any of the above-mentioned information which is not generally known to the
public, nor shall he employ such information in any way other than for the
benefit of the Company and the Bank.

 

11. Termination and Termination Pay. Subject to Section 12 of this Agreement,
Executive’s employment under this Agreement may be terminated in the following
circumstances:

 

  a. Death. Executive’s employment under this Agreement shall terminate upon his
death during the term of this Agreement, in which event Executive’s estate shall
be entitled to receive the compensation due to Executive through the last day of
the calendar month in which his death occurred.

 

  b. Retirement. This Agreement shall be terminated upon Executive’s retirement
under the retirement benefit plan or plans in which he participates pursuant to
Section 6 of this Agreement or otherwise.

 

  c. Disability.

 

  i.

The Board or Executive may terminate Executive’s employment after having
determined Executive has a Disability. For purposes of this Agreement,
“Disability” means a physical or mental infirmity that impairs Executive’s
ability to substantially perform his duties under this Agreement and that
results in Executive becoming eligible for long-term disability benefits under
any long-term disability plans of the Company and the Bank (or, if there are no
such plans in effect, that impairs Executive’s ability to substantially perform
his duties under this Agreement for a period of one hundred eighty (180)
consecutive days). The Board shall determine whether or not Executive is and
continues to be permanently disabled for purposes of this Agreement in

 

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good faith, based upon competent medical advice and other factors that they
reasonably believe to be relevant. As a condition to any benefits, the Board may
require Executive to submit to such physical or mental evaluations and tests as
it deems reasonably appropriate.

 

  ii. In the event of such Disability, Executive’s obligation to perform
services under this Agreement will terminate. The Bank will pay Executive, as
Disability pay, an amount equal to one hundred percent (100%) of Executive’s
bi-weekly rate of base salary in effect as of the date of his termination of
employment due to Disability. Disability payments will be made on a monthly
basis and will commence on the first day of the month following the effective
date of Executive’s termination of employment for Disability and end on the
earlier of: (A) the date he returns to full-time employment at the Bank in the
same capacity as he was employed prior to his termination for Disability; (B)
his death; or (C) upon his attainment of age 65 or (D) the date this Agreement
would have expired had Executive’s employment not terminated by reason of
disability. Such payments shall be reduced by the amount of any short- or
long-term disability benefits payable to Executive under any other disability
programs sponsored by the Company and the Bank. In addition, during any period
of Executive’s Disability, Executive and his dependents shall, to the greatest
extent possible, continue to be covered under all benefit plans (including,
without limitation, retirement plans and medical, dental and life insurance
plans) of the Company and the Bank, in which Executive participated prior to his
Disability on the same terms as if Executive were actively employed by the
Company and the Bank.

 

  d. Termination for Cause.

 

  i. The Board may, by written notice to Executive in the form and manner
specified in this paragraph, immediately terminate his employment at any time,
for “Cause.” Executive shall have no right to receive compensation or other
benefits for any period after termination for Cause except for vested benefits.
Termination for Cause shall mean termination because of, in the good faith
determination of the Board, Executive’s:

 

  (1) Personal dishonesty;

 

  (2) Incompetence;

 

  (3) Willful misconduct;

 

  (4) Breach of fiduciary duty involving personal profit;

 

  (5) Intentional failure to perform stated duties under this Agreement;

 

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  (6) Willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) that reflects adversely on the reputation of the
Company and the Bank, any felony conviction, any violation of law involving
moral turpitude, or any violation of a final cease-and-desist order; or

 

  (7) Material breach by Executive of any provision of this Agreement.

 

  ii. Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause by the Company and the Bank unless there shall have been
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of a majority of the entire membership of the Board at a meeting of such
Board called and held for the purpose (after reasonable notice to Executive and
an opportunity for Executive to be heard before the Board with counsel), of
finding that, in the good faith opinion of the Board, Executive was guilty of
the conduct described above and specifying the particulars thereof.

 

  e. Voluntary Termination by Executive. In addition to his other rights to
terminate under this Agreement, Executive may voluntarily terminate employment
during the term of this Agreement upon at least sixty (60) days prior written
notice to the Board. Following a voluntary termination of employment under this
Section 11(e), Executive will be subject to the restrictions set forth in
Sections 11(g)(i) and 11(g)(ii) of this Agreement for a period of four months
from his termination date. Executive will be entitled to receive his vested
rights and employee benefits up to his date of termination and his base salary
through the last day of the four-month period.

 

  f. Without Cause or With Good Reason.

 

  i. In addition to termination pursuant to Sections 11(a) through 11(e), the
Board may, by written notice to Executive, immediately terminate his employment
at any time for a reason other than Cause (a termination “Without Cause”) and
Executive may, by written notice to the Board, immediately terminate this
Agreement at any time within ninety (90) days following an event constituting
“Good Reason,” as defined below (a termination “With Good Reason”).

 

  ii.

Subject to Section 12 of this Agreement, in the event of termination under this
Section 11(f), Executive shall be entitled to receive his base salary for the
remaining term of the Agreement paid in one lump sum within ten (10) calendar
days of such termination. Also, in such event, Executive shall, for the
remaining term of the Agreement, receive the benefits he would have received
during the remaining term of the Agreement under any retirement programs
(whether tax-qualified or non-qualified) in which Executive participated prior
to his termination (with the amount of the benefits determined by reference to
the benefits received by Executive or accrued on his behalf under such programs
during the twelve (12) months preceding his termination) and continue to
participate in any benefit plans of the Company and the Bank that provide health
(including medical and dental), life or

 

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disability insurance, or similar coverage, upon terms no less favorable than the
most favorable terms provided to senior executives of the Company and the Bank
during such period. In the event that the Company and the Bank are unable to
provide such coverage by reason of Executive no longer being an employee, the
Company and the Bank shall provide Executive with comparable coverage on an
individual policy basis.

 

  iii. “Good Reason” shall exist if, without Executive’s express written
consent, the Company and the Bank materially breach any of their respective
obligations under this Agreement. Without limitation, such a material breach
shall be deemed to occur upon any of the following:

 

  (1) A material reduction in Executive’s responsibilities or authority in
connection with his employment with the Company or the Bank;

 

  (2) Assignment to Executive of duties of a non-executive nature or duties for
which he is not reasonably equipped by his skills and experience;

 

  (3) Failure of Executive to be nominated or renominated to the Board;

 

  (4) A reduction in salary or benefits contrary to the terms of this Agreement,
or, following a Change in Control as defined in Section 12 of this Agreement,
any reduction in salary or material reduction in benefits below the amounts to
which Executive was entitled prior to the Change in Control;

 

  (5) Termination of incentive and benefit plans, programs or arrangements, or
reduction of Executive’s participation to such an extent as to materially reduce
their aggregate value below their aggregate value as of the Effective Date;

 

  (6) A requirement that Executive relocate his principal business office or his
principal place of residence outside of the area consisting of a twenty-five
(25) mile radius from the current main office and any branch of the Bank, or the
assignment to Executive of duties that would reasonably require such a
relocation; or

 

  (7) Liquidation or dissolution of the Company or the Bank.

 

  iv.

Notwithstanding the foregoing, a reduction or elimination of Executive’s
benefits under one or more benefit plans maintained by the Company and the Bank
as part of a good faith, overall reduction or elimination of such plans or plans
or benefits thereunder applicable to all participants in a manner that does not
discriminate against Executive (except as such discrimination may be necessary
to comply with law) shall not constitute an event of Good Reason

 

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or a material breach of this Agreement, provided that benefits of the type or to
the general extent as those offered under such plans prior to such reduction or
elimination are not available to other officers of the Company and the Bank or
any company that controls either of them under a plan or plans in or under which
Executive is not entitled to participate.

 

  g. Continuing Covenant Not to Compete or Interfere with Relationships.
Regardless of anything herein to the contrary, following a termination by the
Company, the Bank or Executive pursuant to Section 11(f):

 

  i. Executive’s obligations under Section 10(c) of this Agreement will continue
in effect; and

 

  ii. During the period ending on the first anniversary of such termination,
Executive shall not serve as an officer, director or employee of any bank
holding company, bank, savings association, savings and loan holding company, or
mortgage company (any of which, a “Financial Institution”) which Financial
Institution offers products or services competing with those offered by the Bank
from any office within fifty (50) miles from the main office or any branch of
the Bank and shall not interfere with the relationship of the Company and the
Bank and any of its employees, agents, or representatives.

 

12. Termination in Connection with a Change in Control.

 

  a. For purposes of this Agreement, a “Change in Control” means any of the
following events:

 

  i. Merger: The Company merges into or consolidates with another corporation,
or merges another corporation into the Company, and as a result less than a
majority of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by persons who were stockholders of
the Company immediately before the merger or consolidation.

 

  ii. Acquisition of Significant Share Ownership: The Company files, or is
required to file, a report on Schedule 13D or another form or schedule (other
than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, if the schedule discloses that the filing person or
persons acting in concert has or have become the beneficial owner of 25% or more
of a class of the Company’s voting securities, but this clause (b) shall not
apply to beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly beneficially
owns 50% or more of its outstanding voting securities.

 

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  iii. Change in Board Composition: During any period of two consecutive years,
individuals who constitute the Company’s Board of Directors at the beginning of
the two-year period cease for any reason to constitute at least a majority of
the Company’s Board of Directors; provided, however, that for purposes of this
clause (iii), each director who is first elected by the board (or first
nominated by the board for election by the stockholders) by a vote of at least
two-thirds (2/3) of the directors who were directors at the beginning of the
two-year period shall be deemed to have also been a director at the beginning of
such period; or

 

  iv. Sale of Assets: The Company sells to a third party all or substantially
all of its assets.

 

A Change in Control shall not occur as a result of a mutual holding company
reorganization or second-step conversion of the Bank from the mutual to the
stock form of ownership.

 

  b.

Termination. If within the period ending two (2) years after a Change in
Control, (i) the Company and the Bank shall terminate Executive’s employment
Without Cause, or (ii) Executive voluntarily terminates his employment With Good
Reason, the Company and the Bank shall, within ten calendar days of the
termination of Executive’s employment, make a lump-sum cash payment to him equal
to 2.99 times Executive’s average Annual Compensation over the five (5) most
recently completed calendar years ending with the year immediately preceding the
effective date of the Change in Control. In determining Executive’s average
Annual Compensation, Annual Compensation shall include base salary and any other
taxable income, including, but not limited to, amounts related to the granting,
vesting or exercise of restricted stock or stock option awards, commissions,
bonuses (whether paid or accrued for the applicable period), as well as,
retirement benefits, director or committee fees and fringe benefits paid or to
be paid to Executive or paid for Executive’s benefit during any such year,
profit sharing, employee stock ownership plan and other retirement contributions
or benefits, including to any tax-qualified plan or arrangement (whether or not
taxable) made or accrued on behalf of Executive of such year. The cash payment
made under this Section 12(b) shall be made in lieu of any payment also required
under Section 11(f) of this Agreement because of a termination in such period.
Executive’s rights under Section 11(f) are not otherwise affected by this
Section 12. Also, in such event, Executive shall, for a thirty-six (36) month
period following his termination of employment, receive the benefits he would
have received over such period under any retirement programs (whether
tax-qualified or nonqualified) in which Executive participated prior to his
termination (with the amount of the benefits determined by reference to the
benefits received by Executive or accrued on his behalf under such programs
during the twelve (12) months preceding the Change in Control) and continue to
participate in any benefit plans of the Company and the Bank that provide health
(including medical and dental), life or disability insurance, or similar
coverage upon terms no less favorable than the most

 

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favorable terms provided to senior executives during such period. In the event
that the Company and the Bank are unable to provide such coverage by reason of
Executive no longer being an employee, the Company and the Bank shall provide
Executive with comparable coverage on an individual policy.

 

  c. The provisions of Section 12 and Sections 14 through 25, including the
defined terms used in such sections, shall continue in effect until the later of
the expiration of this Agreement or two years following a Change in Control.

 

13. Indemnification and Liability Insurance.

 

  a. Indemnification. The Company and the Bank agree to indemnify Executive (and
his heirs, executors, and administrators), and to advance expenses related
thereto, to the fullest extent permitted under applicable law and regulations
against any and 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 Executive of the
Company, the Bank or any of their subsidiaries (whether or not he continues to
be a director or Executive at the time of incurring any such expenses or
liabilities) such expenses and liabilities to include, but not be limited to,
judgments, court cost, and attorney’s fees and the costs of reasonable
settlements, such settlements to be approved by the Board, if such action is
brought against Executive in his capacity as an Executive or director of the
Company and the Bank or any of their subsidiaries. Indemnification for expenses
shall not extend to matters for which Executive has been terminated for Cause.
Nothing contained herein shall be deemed to provide indemnification prohibited
by applicable law or regulation. Notwithstanding anything herein to the
contrary, the obligations of this Section 13 shall survive the term of this
Agreement by a period of six (6) years.

 

  b. Insurance. During the period in which indemnification of Executive is
required under this Section, the Company and the Bank shall provide Executive
(and his heirs, executors, and administrators) with coverage under a directors’
and officers’ liability policy at the expense of the Company and the Bank, at
least equivalent to such coverage provided to directors and senior executives of
the Company and the Bank.

 

14. Reimbursement of Executive’s Expenses to Enforce this Agreement. The Company
and the Bank shall reimburse Executive for all out-of-pocket expenses,
including, without limitation, reasonable attorney’s fees, incurred by Executive
in connection with successful enforcement by Executive of the obligations of the
Company and the Bank to Executive under this Agreement. Successful enforcement
shall mean the grant of an award of money or the requirement that the Company
and the Bank take some action specified by this Agreement: (i) as a result of
court order; or (ii) otherwise by the Company and the Bank following an initial
failure of the Company and the Bank to pay such money or take such action
promptly after written demand therefor from Executive stating the reason that
such money or action was due under this Agreement at or prior to the time of
such demand.

 

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15. Limitation of Benefits under Certain Circumstances. If the payments and
benefits pursuant to Section 12 of this Agreement, either alone or together with
other payments and benefits which Executive has the right to receive from the
Company and the Bank, would constitute a a “parachute payment” under Section
280G of the Code, the payments and benefits pursuant to Section 12 shall be
reduced or revised, in the manner determined by Executive, by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits under Section 12 being non-deductible to the Company and the Bank
pursuant to Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code. The determination of any reduction in the payments and
benefits to be made pursuant to Section 12 shall be based upon the opinion of
the Company and the Bank’s independent public accountants and paid for by the
Company and the Bank. In the event that the Company, the Bank and/or Executive
do not agree with the opinion of such counsel, (i) the Company and the Bank
shall pay to Executive the maximum amount of payments and benefits pursuant to
Section 12, as selected by Executive, which such opinion indicates there is a
high probability do not result in any of such payments and benefits being
non-deductible to the Company and the Bank and subject to the imposition of the
excise tax imposed under Section 4999 of the Code and (ii) the Company and the
Bank may request, and Executive shall have the right to demand that they
request, a ruling from the IRS as to whether the disputed payments and benefits
pursuant to Section 12 have such consequences. Any such request for a ruling
from the IRS shall be promptly prepared and filed by the Company and the Bank,
but in no event later than thirty (30) days from the date of the opinion of
counsel referred to above, and shall be subject to Executive’s approval prior to
filing, which shall not be unreasonably withheld. The Company, the Bank and
Executive agree to be bound by any ruling received from the IRS and to make
appropriate payments to each other to reflect any such rulings, together with
interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code. Nothing contained herein shall result in a reduction of any payments
or benefits to which Executive may be entitled upon termination of employment
other than pursuant to Section 12 hereof, or a reduction in the payments and
benefits specified in Section 12 below zero.

 

16. Injunctive Relief. If there is a breach or threatened breach of Section
11(g) of this Agreement or the prohibitions upon disclosure contained in Section
10(c) of this Agreement, the parties agree that there is no adequate remedy at
law for such breach, and that the Company and the Bank shall be entitled to
injunctive relief restraining Executive from such breach or threatened breach,
but such relief shall not be the exclusive remedy hereunder for such breach. The
parties hereto likewise agree that Executive, without limitation, shall be
entitled to injunctive relief to enforce the obligations of the Company and the
Bank under this Agreement.

 

17. Successors and Assigns.

 

  a. This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Company and the Bank which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Company and the Bank.

 

  b.

Since the Company and the Bank are contracting for the unique and personal
skills of Executive, Executive shall be precluded from assigning or delegating
his rights or

 

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duties hereunder without first obtaining the written consent of the Company and
the Bank.

 

18. No Mitigation. Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise
and no such payment shall be offset or reduced by the amount of any compensation
or benefits provided to Executive in any subsequent employment.

 

19. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed to the Company and/or the Bank at their principal business
offices and to Executive at his home address as maintained in the records of the
Company and the Bank.

 

20. No Plan Created by this Agreement. Executive, the Company and the Bank
expressly declare and agree that this Agreement was negotiated among them and
that no provision or provisions of this Agreement are intended to, or shall be
deemed to, create any plan for purposes of the Employee Retirement Income
Security Act or any other law or regulation, and each party expressly waives any
right to assert the contrary. Any assertion in any judicial or administrative
filing, hearing, or process that such a plan was so created by this Agreement
shall be deemed a material breach of this Agreement by the party making such an
assertion.

 

21. Amendments. No amendments or additions to this Agreement shall be binding
unless made in writing and signed by all of the parties, except as herein
otherwise specifically provided.

 

22. Applicable Law. Except to the extent preempted by Federal law, the laws of
the State of New Jersey shall govern this Agreement in all respects, whether as
to its validity, construction, capacity, performance or otherwise.

 

23. Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.

 

24. Headings. Headings contained herein are for convenience of reference only.

 

25. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, other than written agreements with respect to specific plans, programs
or arrangements described in Sections 5 and 6.

 

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26. Required Provisions. In the event any of the foregoing provisions of this
Section 26 are in conflict with the terms of this Agreement, this Section 26
shall prevail.

 

  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.

 

  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.
Section 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. Section 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. Section 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), the FDIC or the Resolution Trust Corporation, 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. Section 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. Section 1828(k)
and 12 C.F.R. Section 545.121 and any rules and regulations promulgated
thereunder.

 

27. Source of Payments. Unless otherwise determined by the Board of Directors of
the Company, all payments and benefits provided in this Agreement shall be paid
or provided solely by the Bank. Notwithstanding anything in this Agreement to
the contrary, no provision of this Agreement shall be construed so as to result
in the duplication of any payment or benefit. Unless otherwise determined by the
Board of Directors of the Company, the Company’s sole obligation under this
Agreement shall be to unconditionally guarantee the 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 benefit shall be paid or provided by the Company.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.

 

ATTEST:

      OCEAN SHORE HOLDING CO.

/s/    Kim M. Davidson

      By:   /s/    Roy Gillian

Corporate Secretary

         

For the Entire Board of Directors

ATTEST:

      OCEAN CITY HOME BANK

/s/    Kim M. Davidson

      By:   /s/    Roy Gillian

Corporate Secretary

         

For the Entire Board of Directors

WITNESS:

      EXECUTIVE

/s/    Kim M. Davidson

      By:  

/s/    Steven E. Brady

Corporate Secretary

         

Steven E. Brady

 

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