Exhibit 10.18

 

OCEANFIRST BANK

TWO YEAR CHANGE IN CONTROL AGREEMENT

 

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

 

WHEREAS, the Bank wishes to protect Executive’s position for the period provided
in this Agreement; and

 

WHEREAS, Executive has agreed to serve in the employ of the Bank.

 

NOW, THEREFORE, in consideration of the contribution and responsibilities of
Executive, and upon the other terms and conditions hereinafter provided, the
parties hereto agree as follows:

 

1. TERM OF AGREEMENT.

 

The term of the OceanFirst Bank Two Year Change in Control Agreement (the
“Agreement”) shall be deemed to have commenced as of the date first above
written and shall continue for a period of twenty-four (24) full calendar months
thereafter. Commencing on the first anniversary date of this Agreement and
continuing at each anniversary date thereafter, the Board of Directors of the
Bank (“Board”) may extend the Agreement for an additional year. The Board will
review the Agreement and Executive’s performance annually for purposes of
determining whether to extend the Agreement, and the results thereof shall be
included in the minutes of the Board’s meeting.

 

2. CHANGE IN CONTROL.

 

(a) Upon the occurrence of a Change in Control of the Bank or the Holding
Company (as herein defined) followed at any time during the term of this
Agreement by the termination of Executive’s employment, other than for Cause, as
defined in Section 2(c) hereof, the provisions of Section 3 shall apply. Upon
the occurrence of a Change in Control, Executive shall have the right to elect
to voluntarily terminate his employment at any time during the term of this
Agreement following any demotion, loss of title, office or significant
authority, reduction in his 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.

 

(b) For purposes of this Plan, 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 (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 at such time as (A) any “person” (as the term is used in Sections 13(d)
and 14(d) of the Exchange

 

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Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 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 in connection
with the conversion of the Bank to the stock form 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 periods.

 

(c) Executive shall not have the right to receive termination benefits pursuant
to Section 3 hereof upon 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 Board of Directors of
the Bank 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 the Date of
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 Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination for Cause, such stock options and related limited rights and any
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.

 

3. TERMINATION BENEFITS.

 

(a) Upon the occurrence of a Change in Control, followed at any time during the
term of this Agreement by termination of the Executive’s employment due to: (1)
Executive’s dismissal or (2) Executive’s voluntary termination pursuant to
Section 2(a), unless such termination is due to Termination for Cause, the Bank
and the Holding Company 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 two (2) 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. 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

 

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such year and payment of any expense items without accountability or business
purpose or that do not meet the Internal Revenue Service requirements for
deductibility by the Bank; provided however, that any payment under this
provision and subsection 3(b) below shall not exceed three (3) times the
Executive’s average annual compensation. At the election of Executive, which
election is to be made prior to a Change in Control, such payment shall be made
in a lump sum. 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 this Agreement.

 

(b) Upon the occurrence of a Change in Control of the Bank or the Holding
Company followed at any time during the term of this Agreement by Executive’s
voluntary or involuntary termination of employment, other than for Termination
for Cause, the Bank shall cause to be continued life, medical and disability
coverage substantially identical to the coverage maintained by the Bank or
Holding Company for Executive prior to his severance, except to the extent such
coverage may be changed in its application to all Bank or Holding Company
employees on a nondiscriminatory basis. Such coverage and payments shall cease
upon the expiration of thirty-six (36) full calendar months from the Date of
Termination.

 

(c) Notwithstanding the preceding paragraphs of this Section 3, 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 the
preceding paragraphs of this Section 3 shall be determined by Executive.

 

4. NOTICE OF TERMINATION.

 

(a) Any purported termination by the Bank or by Executive in connection with a
Change in Control 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 instance of Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).

 

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(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, 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 connection with a Change in
Control, in the event the Executive is terminated for reasons other than
Termination for Cause, the Bank will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to his annual salary) and continue him as a
participant in all compensation, benefit and insurance plans in which he was
participating when the notice of 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.

 

5. SOURCE OF PAYMENTS.

 

It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Bank.
Further, the Holding Company guarantees such 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.

 

6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

 

This Agreement contains the entire understanding between the parties hereto and
supersedes any prior agreement between 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.

 

Nothing in this Agreement shall confer upon Executive the right to continue in
the employ of Bank or shall impose on the Bank any obligation to employ or
retain Executive in its employ for any period.

 

7. 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, the Bank and their respective successors and assigns.

 

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8. 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 or as to any act other than that specifically
waived.

 

9. REQUIRED REGULATORY PROVISIONS.

 

(a) The board of directors may terminate Executive’s employment at any time, but
any termination by the board of directors, 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
2 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.
§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(c)(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, 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 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 Office of
Thrift Supervision (or his or her designee) at the time the Federal Deposit
Insurance Corporation 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; or (ii) by the Director of the Office of Thrift
Supervision (or his or her designee) at the time the Director (or his or her
designee) approves a supervisory merger to resolve problems related to operation
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 any rules
and regulations promulgated thereunder.

 

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10. REINSTATEMENT OF BENEFITS UNDER SECTION 9(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 9(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 3 of this Agreement upon the
Bank’s receipt of a dismissal of charges in the Notice.

 

11. 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.

 

12. 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. In addition, references to the
masculine shall apply equally to the feminine.

 

13. 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 preempted by Federal law.

 

14. 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’s main office, 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.

 

15. 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 (which payments are guaranteed by the Holding
Company pursuant to Section 5 hereof) if Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.

 

16. 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

 

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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.

 

17. 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, 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 by their duly authorized officers, and Executive
has signed this Agreement, on the 18th day of February, 2004.

 

ATTEST:

     

OCEANFIRST BANK

       

By:

   

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Secretary

         

Officer

 

SEAL

 

ATTEST:

     

OCEANFIRST FINANCIAL CORP.

            (Guarantor)

       

By:

   

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Secretary

     

Officer

 

SEAL

 

WITNESS:                          

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Executive