Document:

EX-10.1

 Exhibit 10.1 

SEPARATION AGREEMENT AND GENERAL RELEASE 

This is a Separation Agreement and General Release (the “Agreement”) by and between Provident Bank (the “Company”) and
Donald Blum (“Employee”) (together the Company and Employee shall be referred to as the “Parties”) made in consideration of the mutual promises contained in this Agreement. The Parties acknowledge that the terms and conditions of
this Agreement have been mutually agreed to and are intended to be final and binding. 
 1.    Employee’s last day
of active employment with the Company shall be February 18, 2020 (the “Notice Date”). Employee’s retirement from the Company shall be effective on the close of business on March 9, 2020 (the “Termination Date”).
Between the Notice Date and the Termination Date, Employee will perform services for the Company only upon the request of the Company. Regardless of whether Employee elects to sign this Agreement: (a) Employee will be paid his regular base
salary through the Termination Date, less all withholdings and deductions required by law, in accordance with the Company’s normal payroll procedures and (b) Employee will be paid for his nine (9) days of accrued but unused PTO, less
all withholdings and deductions required by law, in the first regular payroll after the Termination Date. To receive the additional benefits described in Paragraph 2 below, Employee must sign, return, and not revoke this Agreement, as explained in
Paragraph 28 below. 
 2.    In consideration of his acceptance of the terms of this Agreement and the release of claims
contained herein, the Company agrees to provide Employee with the following separation pay and benefits: 
  

	 	a.	 A lump sum severance payment in the amount of $750,000, less all withholdings and deductions required by law,
within twenty-one (21) days after the Effective Date of this Agreement (as defined in Paragraph 28 below). 

  

	 	b.	 A lump sum gross payment in the amount of $142,500, less all withholdings and deductions required by law,
representing Employee’s cash incentive for 2019, to be paid within twenty-one (21) days after the Effective Date of this Agreement. 

 

	 	c.	 A lump sum gross payment in the amount of $50,000, less all withholdings and deductions required by law, to
offset the cost of continuing insurance premiums through COBRA for 18 months, to be paid within twenty-one (21) days after the Effective Date of this Agreement. Employee acknowledges that his current
Health, Vision and Dental benefits will end on February 29, 2020, and that it will be Employee’s responsibility to apply for and maintain his benefits coverage under COBRA. 

 

	 	d.	 The Company will transfer title to the Company-owned vehicle currently in Employee’s possession (2018 Audi
A6) to Employee as soon as administratively practical after the Effective Date of this Agreement in accordance with the third party leasing company’s administrative requirements. This will be reported to the taxing authorities in accordance
with IRS regulations. 

 Employee acknowledges and agrees that he is not entitled to receive or accrue any further
compensation or employee benefits under any of the Company’s policies or practices, except as otherwise provided for in this Agreement. 

Employee acknowledges and agrees that the foregoing payments and benefits are not payments and benefits to which he is otherwise entitled,
that these payments and benefits constitute valid and sufficient consideration for signing this Agreement, and that his receipt of such payments and benefits is conditioned on his compliance with the terms of this Agreement. Employee agrees and
understands that should he violate any obligation under this Agreement, the Company shall have the right to seek repayment of all sums paid to Employee under this Agreement, as well as the right to seek additional relief and damages as a result of
Employee’s violation of the Agreement. In the event of such breach, all other terms of this Agreement shall continue in full, including the release of claims in this Agreement. 

 
  
  

 
  

			
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 3.    Employee acknowledges that his group life insurance coverage as an
active employee will end on the Termination Date. Employee acknowledges that he is eligible to exercise the Group Life Conversion Privilege and pay for an individual life insurance policy through Prudential Financial. Information regarding the Group
Life Conversion Privilege and conversion forms will be furnished to Employee following the Termination Date. 

4.    Employee acknowledges that all other employee benefits shall no longer accrue to his benefit as of the Termination
Date. However, nothing in this Agreement shall adversely affect any claims Employee may have to retirement benefits or proceeds, continuation of benefits, or such other accrued benefits Employee may be entitled to as a former employee of the Company
based on the Employee’s employment prior to the Termination Date. 
 5.    Employee acknowledges and understands
that his active participation in the Company’s 401(k) Plan terminates upon the Termination Date and that he is not entitled to any contributions on account of amounts payable pursuant to Section 2 or other amounts payable with respect to
periods after the Notice Date. A statement detailing Employee’s accrued benefits under the 401(k) Plan will be available on the Principal website within a reasonable time after the Termination Date. Distribution of Employee’s benefits in
both the Participant Account and the Employer Account will be made in accordance with the existing Plan provisions. 

6.    Employee acknowledges and understands that his active participation in the Company’s Employee Stock Ownership
Plan (ESOP) terminates upon the Termination Date and that he is not entitled to any contributions on account of amounts payable pursuant to Section 2 or other amounts payable with respect to periods after the Notice Date. A statement detailing
Employee’s accrued benefits under the ESOP will be provided in accordance with the existing administration of the Plan. Distribution of Employee’s benefits in his account will be made in accordance with the existing Plan provisions. 

7.    Employee acknowledges and understands that his active participation in the Company’s Non-Qualified Retirement Plan terminates upon the Termination Date and that he is not entitled to any contributions on account of amounts payable pursuant to Section 2 or other amounts payable with respect to
periods after the Notice Date. A statement detailing Employee’s accrued benefits under the Non-Qualified Retirement Plan will be provided in accordance with the existing administration of the Plan.
Distribution of Employee’s benefits in his account will be made in accordance with the existing Plan provisions. 

8.    Employee acknowledges and understands that all of his outstanding awards under the Provident Financial Services,
Inc. Amended and Restated Long Term Equity Incentive Plan and the 2019 Long Term Equity Incentive Plan shall be forfeited upon the Termination Date. 

9.    In consideration of the Company’s undertakings as contained in this Agreement, Employee, on behalf of himself,
his heirs, executors, administrators, successors and assigns (collectively, “Employee”) irrevocably and unconditionally releases the Company, and its current, past and future parent companies, affiliates, subsidiaries, divisions,
affiliates, agents, principals, directors, officers, employees, independent contractors, benefit plans, insurers, and re-insurers, and each of their heirs, successors and assigns (collectively,
“Releasees”), of and from any and all claims, charges, promises, agreements, damages, actions and expenses of any nature, whether in tort, contract, by statute, or on any other basis, whether in law or in equity, whether known or unknown,
(collectively, “Claims”), which Employee may have against them arising prior to the Effective Date of the Agreement (collectively, “Claims”). 

  
  

 

			
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 Without in any way limiting the foregoing general release, this release includes all Claims
arising out of Employee’s employment with the Company, including the terms, conditions, and termination of his employment with the Company, including Claims for breach of express or implied contract, wrongful termination, constructive
termination, retaliation, whistleblowing, discrimination, harassment, hostile working environment, abusive discharge, denial of or interference with leave, defamation, invasion of privacy, violation of public policy, interference with contractual
relationships, and intentional or negligent infliction of emotional distress, as well as Claims under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, Section 1981 of the
Civil Rights Act of 1866, the Americans with Disabilities Act, the Rehabilitation Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Fair Credit Reporting Act, the Employee Retirement Income Security Act, the Genetic
Information Nondiscrimination Act, the Health Insurance Portability and Accountability Act, the Occupational Safety and Health Act, the Equal Pay Act, the Uniformed Services Employment and Re-employment Act,
the False Claims Act (including the qui tam provision thereof), the Consolidated Omnibus Budget Reconciliation Act, The Dodd-Frank Wall Street Reform and Consumer Protection Act, the Electronic Communications Privacy Act (including the Stored
Communications Act), the New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the New Jersey Conscientious Employee Protection Act, the New Jersey Worker Freedom from Employer Intimidation Act, the New Jersey Wage and Hour Laws,
the New Jersey Wage Payment Law, the New Jersey Earned Sick Leave Law, the New Jersey Civil Rights Act, the New Jersey Statutory Provision Regarding Retaliation/Discrimination for Filing a Workers’ Compensation Claim, the New Jersey
Smokers’ Rights Law, the New Jersey Equal Pay Act, the New Jersey Genetic Privacy Act, the New Jersey Fair Credit Reporting Act, the New Jersey False Claims Act, the New Jersey mini-COBRA law, the New Jersey Constitution, as well as any Claims
under any other federal, state or local statute, ordinance, order or regulation governing the rights of employees and employers. 
 Without
in any way limiting the foregoing general release, this release also includes all claims for compensatory damages, punitive damages, attorney’s fees, salary, commissions, overtime, premium pay, bonuses, stock awards, stock options, expense
reimbursements, severance payments, deferred compensation payments, any payments described in the Change in Control Agreement dated December 16, 2015, by and between Company, Provident Financial Services, Inc. and Employee, or other monies due.

 Notwithstanding the forgoing, Employee is not waiving any rights he may have to: (a) his own vested accrued employee benefits under
the Company’s health, welfare, or retirement benefit plans as of the Termination Date; (b) benefits and/or the right to seek benefits under either applicable unemployment compensation statutes or worker’s compensation statutes,
however, Employee represents that he is not presently aware of any basis for seeking workers’ compensation benefits, and the parties agree that if Employee ever seeks workers’ compensation benefits, the Company retains all rights to oppose
any such claims; (c) pursue claims which by law cannot be waived by signing this Agreement; and/or (d) enforce this Agreement. 

Except as may be necessary to enforce this Agreement, and to the fullest extent permitted by law, Employee agrees not to permit, authorize,
initiate, join or continue any lawsuit, administrative charges or complaints, arbitrations or proceedings (collectively, “Proceedings”) against any of the Releasees based in whole or in part on any Claim covered by this release.
Notwithstanding the foregoing, Employee understands that nothing contained in this Agreement limits his ability to file a charge or complaint with any federal, state or local governmental agency or commission (“government agencies”).
Employee further understands that this Agreement does not limit his ability to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing
documents or other information, without notice to the Company. This Agreement also does not limit Employee’s right to receive an award for information provided to any government agencies. However, Employee does hereby agree to waive any right
he may have to benefit in any manner from any relief (whether monetary, equitable, or otherwise) arising out of any past, present or future proceeding before a state or federal anti-discrimination agency. 

10.    Employee warrants and represents that with respect to the Family and Medical Leave Act (FMLA) and the Fair Labor
Standards Act (FLSA), he is aware of no facts that give rise to, or in any way support, any Claims under the FMLA or FLSA against the Company. Further, Employee agrees and acknowledges that (a) he was properly classified as exempt from overtime
(i.e., as ineligible to receive overtime), (b) he has been fully and accurately paid for all hours worked, and (c) he is not owed any salary, wages, overtime wages, commissions, bonuses, leaves of absences, benefits or any other form of
compensation by the Company, except as required by this Agreement. 

  
  

 

			
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 11.    Employee represents and warrants that to the extent it is
determined that any aspect or portion of this Agreement, including any aspect or portion of the release in this Agreement, requires the approval of any court, agency or other body to be effective, that he will cooperate fully with the Company to
secure that approval, and if requested will join in and support any such request for approval. 
 12.    Employee
specifically acknowledges and agrees that this Agreement is not a severance plan and is not a plan of benefits to which he is entitled by virtue of Employee’s employment status. Employee agrees that consideration under this Agreement is
specific to him only and that it is not part of an administrative scheme or other such benefit offered by the Company. In conjunction with this provision, Employee agrees, acknowledges and hereby waives any and all claims, known or otherwise
perceived against the Company to the extent such claim would assert that this Agreement constitutes a severance plan governed by the Employee Retirement Income Security Act of 1974. 

13.    Except as may be required by law, Employee agrees that the terms of this Agreement shall be kept confidential, and
that he will not make disclosure or reference to the existence of this Agreement to any person or entity other than Employee’s immediate family, tax advisor and/or attorney (all of whom Employee will advise of this provision). 

14.    Employee agrees not to make any statements to any former, current or prospective customers or employees of the
Company, its parent company, subsidiaries, divisions, or affiliates, or to any other persons, which are disparaging of the business, reputation, competence, fairness or character of the Company, its parent company, subsidiaries, divisions or
affiliates, or of any director, officer or employee of any such entity. This obligation of non-disparagement extends to statements and/or actions in any format, including written, verbal, and electronic, and
in any medium, including in any internet medium (including social networking sites, blogs, etc.) 
 If the Company receives a reference
request regarding Employee from a prospective employer, the Company shall only confirm Employee’s dates of employment and last position held. 

15.    Employee agrees not to directly or indirectly: (a) solicit any employees of the Company for employment by a
competing company, or (b) solicit any customers of the Company to do business in competition with the Company, for a period of twelve (12) months following the Effective Date of this Agreement. 

16.    Except as may be required by law. Employee agrees and acknowledges that he has an obligation of confidentiality and
non-disclosure with respect to any and all confidential, proprietary and trade secret information (collectively, “Confidential Information”) that he acquired during the course of his employment with
the Company. Employee will not disclose or use any Confidential Information of the Company or its customers that may have been disclosed to him, or of which he may have become aware, in the course of his employment with the Company, unless such
disclosure is done with the express written approval of the Company. This obligation of confidentiality and non-disclosure extends to both Company information and third-party (“Third Party”)
information held by the Company in confidence. Such Company and Third Party Confidential Information includes but is not limited to: data relating to the Company’s lending and investment policies, unique marketing, sales and servicing programs
and strategies, procedures and techniques; lists of customers, and lists of prospective customers; the identity, authority and responsibilities of key contacts at the Company’s customers and prospective customers; the composition and
organization of the Company’s customers’ businesses; the peculiar risks inherent in the operations of the Company’s customers; the Company’s personnel and payroll data including details of salary, bonus, commission and other
compensation arrangements; business, management and human resources/personnel strategies and practices; financial and technical information; and other data showing the particularized requirements and preferences of the Company’s customers. 

  
  

 

			
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 Notwithstanding the above, the Federal Defend Trade Secrets Act of 2016 provides immunity in
certain circumstances to Company employees, contractors, and consultants for limited disclosures of Company and Third Party Confidential Information. Specifically, Company employees, contractors, and consultants may disclose Company and Third Party
Confidential Information: (a) in confidence, either directly or indirectly, to a Federal, State, or local government official, or to an attorney, “solely for the purpose of reporting or investigating a suspected violation of law,” or
(b) “in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” In addition, Company employees, contractors, and consultants who file retaliation lawsuits for reporting a suspected
violation of law may also use and disclose related Company and Third Party Confidential Information, in the following manner: (a) the individual may disclose the Company and Third Party Confidential Information to his/her attorney, and
(b) the individual may use the information in related court proceeding, as long as the individual files documents containing the Company and Third Party Confidential Information under seal and does not otherwise disclose the Company and Third
Party Confidential Information except pursuant to court order. 
 17.    On or before the Termination Date, Employee
will return to the Company all documents, records, notebooks, computers, laptops or other electronic equipment, computer discs and hard drives, tapes and other repositories containing Company and Third Party Confidential Information, including all
copies thereof, as well as all originals and all copies of works, or other tangible Company property, whether prepared by Employee or others, then in his possession or under his control (collectively, “Company Property”). Employee further
agrees, warrants and represents that after returning the aforesaid Company property, he will no longer be in possession of any Company documents or property. Employee further acknowledges that all files, records and communications, whether in hard
copy or electronic format, including but not limited to emails, that were sent or given to him, created by him or otherwise came into his possession, at any time during his employment that relate to the Company or the Company’s actual or
prospective clients, are the property of the Company and that the Company shall have the right to access and use such materials in the course of its business. 

18.    Employee also agrees to cooperate fully with the Company in any matters that have given, or may give, rise to a
legal claim against the Company and of which he is knowledgeable as a result of his employment with the Company, including but not limited to the Itria Ventures, LLC v. Provident Bank, Index No. 653667/2018 matter pending in the Supreme Court
of New York, County of New York (the “Itria Litigation”). This requires Employee, without limitation, to (a) make himself available upon reasonable request to provide information and assistance to the Company on such matters without
additional compensation (including but not limited to preparing discovery responses, and preparing for and attending depositions, mediations, and trial), except for reimbursement of his out of pocket costs, if any, (b) maintain the
confidentiality of all Company privileged or confidential information including, without limitation, attorney-client privileged communications and attorney work product, unless disclosure is required by law or is expressly authorized by the Company,
and (c) notify the Company promptly of any requests to him for information related to any pending or potential legal claim or litigation involving the Company, reviewing any such request with a designated representative of the Company prior to
disclosing any such information, and permitting a representative of the Company to be present during any communication of such information. 

19.    On or before the Termination Date, Employee will provide the Company with (a) a listing of all passwords,
usernames and/or other logon information associated with all computers, online services and/or accounts he created or used for any work-related purposes. Employee will include the associated web address or other information needed to enable the
Company to identify and access all such computers, online services and/or accounts; (b) all passwords for all office phones and any other devices he created or used for any work-related purposes; and (c) all templates, forms and documents
he created or used for any work-related purposes. 

  
  

 

			
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 20.    Employee understands and agrees that the Company and/or any other
Releasee shall be under no obligation to reinstate, hire, rehire or consider him for future employment or independent contractor status. Employee expressly agrees that he will not knowingly apply for any such employment, reinstatement, hire or
rehire or independent contractor status at any time in the future with the Company and/or any other Releasee. If Employee knowingly or unknowingly applies for any such employment, reinstatement, hire or rehire or independent contractor status,
Employee agrees that the Company and/or any other Releasee may reject his application without liability. If in the future the Company purchases/acquires/merges with, or is acquired by, a subsequent employer of Employee, Employee’s employment
will not be terminated solely by virtue of this provision; however, this provision does not create any entitlement to continued employment and Employee’s employment may be terminated for reasons unrelated to this provision. 

21.    Employee represents that he is not currently receiving, has not received in the past, will not have received at the
time of payment pursuant to this Agreement, is not entitled to, is not eligible for, and has not applied for or sought Social Security Disability benefits. In the event any statement in the first sentence of this Paragraph is incorrect (for example,
but not limited to, if Employee is a Social Security Disability beneficiary, etc.), the following sentences of this paragraph apply. Employee affirms, covenants, and warrants he has made no claim for illness or injury against, nor is he aware of any
facts supporting any claim against, Releasees under which they could be liable for medical expenses incurred by him before or after the execution of this Agreement. Furthermore, he is aware of no medical expenses which Medicare has paid and for
which Releasees are or could be liable now or in the future. Employee agrees and affirms that, to the best of his knowledge, no liens of any governmental entities, including those for Medicare conditional payments, exist. Employee will indemnify,
defend, and hold Releasees harmless from Medicare claims, liens, damages, conditional payments, and rights to payment, if any, including attorneys’ fees, and he further agrees to waive any and all future private causes of action for damages
pursuant to 42 U.S.C. § 1395y(b)(3)(A) et seq. 
 22.    Employee and the Company agree that this Agreement
constitutes the entire agreement by and between the Parties and may not be altered, modified or changed except by written consent of the Parties. Notwithstanding the foregoing, the Parties agree that the Undertaking executed by Employee in the Itria
Litigation remains in effect in accordance with its terms. 
 23.    Employee understands and agrees that the payment of
monies herein set forth does not constitute an admission of liability or violation of any applicable law, contract, provision, benefit plan, rule or regulation, as to which the Company expressly denies any such liability or violation. 

24.    The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair
meaning, and not strictly for or against either of the Parties. There shall be no presumption or construction against the party who caused this Agreement to be drafted. 

25.    The provisions of this Agreement are severable and if any part is found to be unenforceable, other portions shall
remain fully valid and enforceable. This Agreement shall be governed by the laws of the State of New Jersey, without regard to New Jersey choice of law principles. Any disputes regarding this Agreement shall be brought exclusively in the state or
federal courts of New Jersey. 
 26.    Should either Party be required to bring an action in court to enforce, or for
breach, or for threatened breach, of any provision of this Agreement, the prevailing party in such action, as determined by the court, shall be entitled, in addition to any other relief that the court may award, to recover its attorney’s fees
and costs incurred in connection with such court action. The Parties agree that any such action will be venued solely in the state and federal courts of the State of New Jersey. 

  
  

 

			
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 27.    If Employee signs this Agreement, he will be giving up certain
rights. Accordingly, Employee is advised to discuss all aspects of this Agreement with an attorney of his own choosing. By his signature, Employee represents and agrees that he fully understands the importance of this Agreement and his right
to discuss this Agreement with an attorney of his own choosing. Employee further acknowledges that he has read this Agreement in its entirety; that he understands the terms of this Agreement; that he is entering into this Agreement freely,
voluntarily and knowingly, without duress or coercion; and that he agrees to all of the terms and conditions of this Agreement. 

28.    Employee has a period of twenty-one (21) days from
receipt of this Agreement to decide whether to sign this Agreement. Employee may sign this Agreement at any time during said 21 day period, however, Employee may not sign this Agreement before the Termination Date. To accept this
Agreement, Employee must sign this Agreement and transmit same to Mr. Leonard Gleason, Esq., Senior Vice President & General Counsel, 100 Wood Ave. South, Iselin, NJ 08830, on or before the close of business on the 21st day, again however, Employee may not sign this Agreement before the Termination Date. Employee agrees that any modifications, material or otherwise, made to this Agreement do not restart or extend
in any way the twenty-one (21) day consideration period. Employee has a period of seven (7) days to revoke this Agreement following the day he signs the Agreement. If the
last day of the revocation period is a Saturday, Sunday or legal holiday in New Jersey, then the revocation period shall not expire until the next following day that is not a Saturday, Sunday or legal holiday. Any revocation within that seven
(7) day period must be in writing and state that he is revoking his acceptance of the Separation Agreement and General Release. The revocation must be personally delivered to Mr. Leonard Gleason on or before the close of business on the 7th day. Accordingly, this Agreement shall not become effective or enforceable, nor shall the Company pay any separation benefits to Employee, until the revocation period has expired (the
“Effective Date of the Agreement”). 
 29.    All amounts payable under this Agreement are intended to comply
with the “short term deferral” exception from Section 409A of the Internal Revenue Code (“Section 409A”) specified in Treas. Reg. § 1.409A- 1(b)(4) (or any successor provision) or the “separation pay
plan” exception specified in Treas. Reg. § 1.409A- 1(b)(9) (or any successor provision), or both of them, and shall be interpreted in a manner consistent with the applicable exceptions. All amounts of severance payable under this Agreement
are payable solely upon Employee’s involuntary separation from service. Notwithstanding the foregoing, to the extent that any amounts payable in accordance with this Agreement are subject to Section 409A, this Agreement shall be
interpreted and administered in such a way as to comply with Section 409A to the maximum extent possible. Each installment payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of
applying Section 409A. If payment of any amount subject to Section 409A is triggered by a separation from service that occurs while Employee is a “specified employee” (as defined by Section 409A) with, and if such amount is
scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or,
if earlier, within 15 days after the appointment of the personal representative or executor of the Employee’s estate following Employee’s death. “Termination of employment,” “resignation” or words of similar import, as
used in this Agreement shall mean, with respect to any payments subject to Section 409A, Employee’s “separation from service” as defined by Section 409A. If any payment subject to Section 409A is contingent on the
delivery of a release by Employee and could occur in either of two years, the payment will occur in the later year. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to Employee. Employee shall be solely
responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A.

 Employee and the Company now knowingly execute this Agreement on the dates specified below to signify their respective agreement to the
terms contained in this Agreement. 

  
  

 

			
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		 	Provident Bank	 		 	
				
	By:	 	 /s/ Christopher Martin
	 		 	 3/12/20

		 	Christopher Martin	 		 	Date
		 	Chairman, CEO & President	 		 	
				
		 	 /s/ Donald Blum
	 		 	 3/10/20

		 	Donald Blum	 		 	Date

  
  

 

			
	Confidential	 	Page 8ex_177073.htm

Exhibit 10.1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

[***] indicates the redacted confidential portions of this exhibit.

 

 

DSP GROUP, INC. 2012 Equity INCENTIVE PLAN

 

NOTICE OF Performance-BASED Restricted Stock Unit AWARD for israeli RESIDENT grantees

 

	Grantee’s Name and I.D: 	Ofer Elyakim
	 	 
	 	 
	 	 

    

You (the “Grantee”) have been granted an award of Performance-Based Restricted Stock Units (the “Award”), subject to the terms and conditions of this Notice of Performance-Based Restricted Stock Unit Award for Israeli Resident Grantees (the “Notice”), the DSP Group, Inc. 2012 Equity Incentive Plan, as amended from time to time (the “Plan”), the Israeli Sub-Plan of the Plan (the “Sub-Plan”) and the Performance-Based Restricted Stock Unit Agreement (the “Agreement”) attached hereto, as follows. Unless otherwise provided herein, the terms in this Notice shall have the same meaning as those defined in the Plan and the Sub-Plan. In the event of any inconsistency or contradiction between any of the terms of this Notice and the provisions of the Agreement, the Plan and the Sub-Plan, the terms and provisions of this Notice shall prevail.

 

	Award Number	 
	 	 
	Date of Award	 
	 	 
	Vesting Commencement Date	March 9, 2020
	 	 
	Total Maximum Number of Performance-Based Restricted Stock	 
	Units Awarded (the “PSUs”)	80,000
	 	 
	Type of Award:	 
	 	 
	 	☒        102 Capital Gains Track Option (with Trustee)
	 	 
	 	             102 Ordinary Income Track Option (with Trustee)
	 	 
	 	             102 Non-Trustee Option
	 	 
	 	             3(i) Option
	 	 
	 	Other                                                               

 

 

 

 

Vesting Schedule:

 

Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice, the Agreement, the Plan and the Sub-Plan:

 

	
			Up to 80,000 PSUs may vest upon the Company’s achievement of certain strategic customer goals. The methodology for determining the number of PSUs eligible to vest is described in Exhibit A. The Minimum Strategic Customer Goal must be achieved to commence vesting.

			 

			“Minimum Strategic Customer Goal” means the penetration of at least *** New Strategic Customers (defined below) during a Performance Period (defined below) with such New Strategic Customers representing revenue of at least $*** million in the Company’s annual operating plan (“AOP”) for the fiscal year following the applicable Performance Period and consistent with the Company’s relevant audited financial results (such revenue, “AOP Revenue”) for the fiscal year following the applicable Performance Period.

			 

			“New Strategic Customer” means (i) a customer who has not previously purchased any products from the Company during the two years prior to the beginning of the first Performance Period or (ii) a new division/business unit within an existing strategic customer.

			 

			“Performance Period” means any of the Company’s 2020, 2021, 2022 and 2023 fiscal years.

			 

			The Board shall determine achievement of the strategic customer goals during a Performance Period based on management’s presentation explaining the reasons for which New Strategic Customer penetration(s) should be included in the following year’s AOP. The Board shall have sole discretion and the Board’s determinations shall be final and binding.

			 

			The relevant number of PSUs (as described in Exhibit A) will be eligible to vest only if and to the extent that the Minimum Strategic Customer Goal is satisfied for a Performance Period. The relevant number of PSUs (as described in Exhibit A) shall immediately vest on the date of approval of the financial results for the then completed fiscal year by the Company’s auditor and following the Board’s determination of the achievement of the strategic customer goals during a Performance Period. If only the Minimum Strategic Customer Goal is achieved for a Performance Period, then all remaining PSUs will be forfeited and deemed reconveyed to the Company, and the Company will thereafter be the legal and beneficial owner of such reconveyed PSUs and will have all rights and interest in or related thereto without further action by the Grantee.

			 

			In no event will the vested PSUs exceed 80,000 PSUs.

			 

			Notwithstanding anything in this Notice, the Agreement, the Plan or the Sub-Plan to the contrary:

			 

			1.    In the event of a termination of the Grantee’s employment (x) for Good Reason (as defined in the Grantee’s employment agreement) or (y) by the Company without Cause (as defined in the Grantee’s employment agreement), in either case, that occurs within the six months prior to or 12 months following a Change in Control (as defined in the Grantee’s employment agreement), the Grantee will vest in 80,000 PSUs upon the consummation of such Change in Control if such Change in Control is consummated before December 31, 2023; provided, however, if such termination occurs within the six months prior to a Change in Control, vesting will not occur until the Change in Control is consummated.

			 

			2.    40,000 PSUs will immediately vest upon the earlier of the Grantee’s death and the Grantee’s Disability, in each case, prior to the end of a Performance Period.

			 

			3.    The PSUs will be subject to all acceleration and vesting provisions provided in the Plan (including Section 11 of the Plan) and the Grantee’s employment agreement. In the event Grantee is entitled to acceleration and immediate vesting of all PSUs pursuant to Section 3 or Section 12 of his employment agreement (other than due to the Grantee’s death or the Grantee’s Disability) or Section 11(b) or Section 11(c) of the Plan, 80,000 PSUs will vest.

			

 

2

 

 

IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Award is to be governed by the terms and conditions of this Notice, the Plan, the Sub-Plan and the Agreement.

 

	 	DSP Group, Inc.

			a Delaware corporation
	 	 	 
	 	By:	Dror Levy
	 	 	 
	 	Title:	CFO
	 	 	 
	 	Date:	March 12, 2020

 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE PSUs SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE OR AS OTHERWISE SPECIFICALLY PROVIDED HEREIN (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). Subject to the terms of the Grantee’s employment agreement, THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE AGREEMENT, NOR IN THE PLAN AND IN THE SUB-PLAN, SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE AT ANY TIME, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.

 

The Grantee acknowledges receipt of a copy of the Plan, the Sub-Plan and the Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan, the Sub-Plan and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan, the Sub-Plan and the Agreement. The Grantee hereby agrees that all questions of interpretation and administration relating to this Notice, the Plan, the Sub-Plan and the Agreement shall be resolved by the Administrator in accordance with Section 8 of the Agreement. The Grantee further agrees to the venue selection and waiver of a jury trial in accordance with Section 9 of the Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Notice.

 

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To the extent an Approved 102 Option, as defined below, is designated above, the Grantee declares and acknowledges: (i) that he or she fully understand that Section 102 of the Ordinance and the rules and regulations enacted thereunder apply to the PSUs specified in this Notice and to him or her; and (ii) that he or she understands the provisions of Section 102 of the Ordinance, the tax track chosen and the implications thereof. In addition, the terms of the PSUs shall also be subject to the terms of the Trust Agreement made between the Company and the Trustee for the benefit of the Grantee (the “Trust Agreement”), as well as the requirements of the Israeli Income Tax Commissioner. The grant of the PSUs is conditioned upon the Grantee signing all documents requested by the Company, the Employer or the Trustee, in accordance with and under the Trust Agreement. A copy of the Trust Agreement is available for the Grantee’s review, during normal working hours, at Company’s offices.

 

Notwithstanding anything to the contrary, including the indication under “Type of Award” above, the Company shall be under no duty to ensure, and no representation or commitment is made, that the PSUs qualify or will qualify under any particular tax treatment (such as Section 102 or any other treatment), nor shall the Company be required to take any action for the qualification of any PSUs under such tax treatment. The Company shall have no liability of any kind or nature in the event that, for any reason whatsoever, the PSUs do not qualify for any particular tax treatment.

 

 

 

	Date:	March 12, 2020	 	/s/ Ofer Elyakim
	 	 	 	Grantee’s Signature
	 	 	 	 
	 	 	 	Ofer Elyakim
	 	 	 	Grantee’s Printed Name
	 	 	 	 
	 	 	 	 
	 	 	 	Address
	 	 	 	 
	 	 	 	 

 

4

 

 

Exhibit 10.1

 

Award Number: __________________

 

DSP GROUP, INC. 2012 EQUITY INCENTIVE PLAN

 

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT FOR ISRAELI RESIDENT GRANTEES

 

1.     Issuance of Units. DSP Group, Inc., a Delaware corporation (the “Company”), hereby issues to the Grantee (the “Grantee”) named in the Notice of Performance-Based Restricted Stock Unit Award for Israeli Resident Grantees (the “Notice”) an award (the “Award”) of the Total Number of Performance-Based Restricted Stock Units Awarded set forth in the Notice (the “Units”), subject to the Notice, this Performance-Based Restricted Stock Unit Agreement for Israeli Resident Grantees (the “Agreement”), the terms and provisions of the DSP Group, Inc. 2012 Equity Incentive Plan, as amended from time to time (the “Plan”) and the Israeli Sub-Plan of the Plan (the “Sub-Plan”), which are incorporated herein by reference. Unless otherwise provided herein, the terms in this Agreement shall have the same meaning as those defined in the Plan, the Sub-Plan and the Notice.

 

2.     Transfer Restrictions. The Units may not be transferred in any manner other than by will or by the laws of descent and distribution and may be converted during the lifetime of the Grantee only by the Grantee. With respect to any Units granted under the provisions of Section 102 of the Ordinance, Shares resulting from their conversion and any additional rights, including bonus shares that may be distributed to the Grantee in connection with the Units (the “Additional Rights”), which will be allocated to the Trustee on behalf of the Grantee according to the provisions of Section 102 of the Ordinance and the Rules (the “Approved 102 Option”), a Grantee shall not sell, assign, transfer, give as a collateral or any right that would be given to any third party or release from trust any Share received upon the conversion of an Approved 102 Option and/or any Additional Right, until at least the lapse of the Holding Period required under Section 102 of the Ordinance. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 of the Ordinance and under any rules or regulations or orders or procedures promulgated thereunder shall apply to and shall be borne by such Grantee. At the end of the Holding Period, the Units, Shares or any Additional Rights may be transferred to the Grantee upon his demand, but only under the condition that the tax due in accordance with Section 102 and the Rules is paid to the satisfaction of the Trustee and the Company. With respect to an Unit granted pursuant to Section 102(c) of the Ordinance, including Additional Rights in respect thereof, if the Grantee ceases to be employed by the Employer, the Grantee shall extend to the Company and/or the Employer a security or guarantee for the payment of tax (including social security taxes and health insurance taxes) due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the Rules.

 

 

 

 

3.     Conversion of Units and Issuance of Shares.

 

(a)     General. Subject to Sections 3(b) and 3(c), one share of Common Stock shall be issuable for each Unit subject to the Award (the “Shares”) upon vesting. Immediately thereafter, or as soon as administratively feasible, the Company will deliver the appropriate number of Shares to the Grantee after satisfaction of any required tax or other withholding obligations, or, in the case of Approved 102 Option, to the Trustee. Any fractional Unit remaining after the Award is fully vested shall be discarded and shall not be converted into a fractional Share. Notwithstanding the foregoing, the relevant number of Shares shall be delivered to the Grantee or, in the case of Approved 102 Option, to the Trustee no later than March 15th of the year following the calendar year in which the Award vests.

 

(b)     Delay of Conversion. The conversion of the Units into the Shares under Section 3(a) above, shall be delayed in the event the Company reasonably anticipates that the issuance of the Shares would constitute a violation of federal securities laws or other Applicable Laws. If the conversion of the Units into the Shares is delayed by the provisions of this Section 3(b), the conversion of the Units into the Shares shall occur at the earliest date at which the Company reasonably anticipates issuing the Shares will not cause a violation of federal securities laws or other Applicable Laws. For purposes of this Section 3(b), the issuance of Shares that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not considered a violation of Applicable Laws.

 

(c)     Delay of Issuance of Shares. The Company shall delay the delivery of any Shares under this Section 3 to the extent necessary to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “specified employees” of certain publicly-traded companies); in such event, any Shares to which the Grantee would otherwise be entitled during the six (6) month period following the date of the Grantee’s termination of Continuous Service will be delivered on the first business day following the expiration of such six (6) month period.

 

4.     Right to Shares. The Grantee shall not have any right in, to or with respect to any of the Shares (including any voting rights or rights with respect to dividends paid on the Common Stock) issuable under the Award until the Award is settled by the issuance of such Shares to the Grantee or, in the case of Approved 102 Option, to the Trustee.

 

5.     Taxes.

 

(a)     Tax Liability. The Grantee is ultimately liable and responsible for all taxes owed by the Grantee in connection with the Award, regardless of any action the Company or any Related Entity takes with respect to any tax withholding obligations that arise in connection with the Award. Neither the Company nor any Related Entity makes any representation or undertaking regarding the treatment of any tax withholding in connection with any aspect of the Award, including the grant, vesting, assignment, release or cancellation of the Units, the delivery of Shares, the subsequent sale of any Shares acquired upon vesting and the receipt of any dividends or dividend equivalents. The Company does not commit and is under no obligation to structure the Award to reduce or eliminate the Grantee’s tax liability.

 

2

 

 

(b)     Payment of Withholding Taxes. No Shares will be delivered to the Grantee until the Grantee has made arrangements acceptable to the Administrator and/or the Trustee, as applicable, for the satisfaction of applicable income tax and employment tax withholding obligations, including, without limitation, such other tax obligations of the Grantee incident to the receipt of Shares. The Company, the Grantee’s employer or the Trustee, as applicable, may offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee an amount sufficient to satisfy such tax withholding obligations. Furthermore, in the event of any determination that the Company, the Grantee’s employer or the Trustee, as applicable, has failed to withhold a sum sufficient to pay all withholding taxes due in connection with the Award, the Grantee agrees to indemnify the Company, the Grantees’ employer or the Trustee, as applicable, and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Grantee, and pay them the amount of such deficiency in cash within five (5) days after receiving a written demand from the Company, the Grantee’s employer or the Trustee, as applicable, to do so, whether or not the Grantee is an employee of the Company and/or the Grantees’ employer at that time.

 

(c)     Tax Consultation. The Grantee is advised to consult with a tax advisor with respect to the tax consequences of receiving or converting Units hereunder. The Company and/or the Grantee’s employer do not assume any responsibility to advise the Grantee on such matters, which shall remain solely the responsibility of the Grantee.

 

6.     Entire Agreement; Governing Law. The Notice, the Plan, the Sub-Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Sub-Plan and this Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan, the Sub-Plan and this Agreement are to be construed in accordance with and governed by the internal laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Delaware to the rights and duties of the parties, provided that the tax treatment and the tax rules and regulations applying hereto shall be the Ordinance and Rules. Should any provision of the Notice, the Plan, the Sub-Plan or this Agreement be determined to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

 

7.     Construction. The captions used in the Notice and this Agreement are inserted for convenience and shall not be deemed a part of the Award for construction or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

8.     Administration and Interpretation. Any question or dispute regarding the administration or interpretation of the Notice, the Plan, the Sub-Plan or this Agreement shall be submitted by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator shall be final and binding on all persons.

 

3

 

 

9.     Venue and Jurisdiction. The Company and the Grantee agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan, the Sub-Plan or this Agreement shall be brought in the United States District Court for the District of Delaware (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Delaware state court) and that the parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 9 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable

 

10.     Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing from time to time to the other party.

 

11.     Amendment and Delay to Meet the Requirements of Section 409A. The Grantee acknowledges that the Company, in the exercise of its sole discretion and without the consent of the Grantee, may amend or modify this Agreement in any manner and delay the issuance of any Shares issuable pursuant to this Agreement to the minimum extent necessary to meet the requirements of Section 409A of the Code as amplified by any Treasury regulations or guidance from the Internal Revenue Service as the Company deems appropriate or advisable. In addition, the Company makes no representation that the Award will comply with Section 409A of the Code and makes no undertaking to prevent Section 409A of the Code from applying to the Award or to mitigate its effects on any deferrals or payments made in respect of the Units. The Grantee is encouraged to consult a tax adviser regarding the potential impact of Section 409A of the Code.

 

END OF AGREEMENT

 

 

4

 

 

Exhibit A

 

The number of PSUs that vest will be determined as follows (rounded down to the nearest whole share):

 

	
			 

			Target (40,000 PSUs)

				
			Number of New Strategic Customers: ***

			 

			Number of Such New Strategic Customers in *** Market: At Least ***

			 

			AOP Revenue: $*** million

			
	
			 

			Minimum Strategic Customer Goal (20,000 PSUs)

				
			Number of New Strategic Customers: ***

			 

			Number of Such New Strategic Customers in *** Market: ***

			 

			AOP Revenue: Greater than $*** million

			
	
			 

			 

			Maximum (80,000 PSUs)

				
			Number of New Strategic Customers: ***

			 

			Number of Such New Strategic Customers in *** Market: At Least ***

			 

			AOP Revenue: $*** million or more

			

 

 

Subject to achievement of the Minimum Strategic Customer Goal, vesting is linear based on AOP Revenue.

 

For linearity between the Minimum Strategic Customer Goal and Target, *** New Strategic Customer penetrations and AOP Revenue in the range of $*** million to $*** million are required. For example, if the Company penetrates *** New Strategic Customers and achieves AOP Revenue of $*** million, 20,000 PSUs will vest.

 

For linearity between Target and Maximum, ***New Strategic Customer penetrations and AOP Revenue in the range of $***million to $***million are required. For example, if the Company penetrates ***New Strategic Customers and achieves AOP Revenue of $***million, 60,000 PSUs will vest.

 

If only the Minimum Strategic Customer Goal is achieved for a Performance Period, then all remaining PSUs will be forfeited and deemed reconveyed to the Company. For example, if the Company penetrates ***New Strategic Customers and achieves AOP Revenue of $*** million, 20,000 PSUs will vest and 40,000 PSUs will be forfeited, even if in fiscal year 2022, the Company penetrates *** New Strategic Customers and achieves AOP Revenue of $*** million.

 

5

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