AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.10
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
Amended and Restated Employment Agreement (the “Agreement”) is made effective as
of the 18th day of December, 2008 (the “Effective Date”) by and between Colonial
Bank, F.S.B. (the “Bank”), a federally chartered stock savings bank, with its
principal administrative office at 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000, and Xxxxxx X. Xxxxxxx (“Executive”). Any
reference to the “Company” shall mean Colonial Bankshares, Inc., a federal
mid-tier stock holding company, which owns 100% of the common stock of the
Bank.
WHEREAS, Executive is
currently employed as the President and Chief Executive Officer of the Bank and
the Company pursuant to an employment agreement entered into on September 20,
2006 (the “Original Agreement”); and
WHEREAS, the Bank desires to
amend and restate the Original Agreement in order to make changes to comply with
the final regulations issued under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) in April 2007; and
WHEREAS, Executive is willing
to serve the Bank on the terms and conditions hereinafter set forth and has
agreed to such changes; and
WHEREAS, the Board of
Directors of the Bank and Executive believe it is in the best interests of the
Bank to enter into this Agreement in order to reinforce and reward Executive for
his service and dedication to the continued success of the Bank and incorporate
the changes required by the final regulations issued under Code Section
409A.
NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and upon the other terms
and conditions hereinafter provided, the parties hereby agree as
follows:
1. POSITION AND
RESPONSIBILITIES
During
the period of his employment hereunder, Executive agrees to serve as President
and Chief Executive Officer of the Bank and President and Chief Executive
Officer of the Company. During the period of his employment hereunder, except
for periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall faithfully perform his duties
hereunder and shall perform the administrative and management services for the
Bank which are customarily performed by persons in a similar executive officer
capacity. Executive shall be responsible for the overall management
of the Company and the Bank and shall be responsible for establishing the
business objectives, policies and strategic plan of the Company and the
Bank. Executive shall also be responsible for providing leadership
and direction to all departments or divisions of the Company and the Bank, and
shall be the primary contact between the Board of Directors and the staff of the
Company and the Bank. Executive also agrees to serve, if elected, as
an officer and director of any subsidiary or affiliate of the Bank or the
Company.
2. TERM OF
EMPLOYMENT
The term
of this Agreement and the period of Executive’s employment hereunder shall begin
as of the date first above written and shall continue for thirty-six (36) full
calendar months thereafter, provided that all changes intended to comply with
Code Section 409A shall be retroactively effective to September 20, 2006; and
provided further that no retroactive change shall affect the compensation or
benefits previously provided to Executive. Commencing on the
Effective Date and continuing on each anniversary date thereafter
(the “Anniversary Date”), this Agreement shall renew for an additional year such
that the remaining term shall be three (3) years unless written notice of
non-renewal (“Non-Renewal Notice”) is provided to Executive at least thirty (30)
days and not more than sixty (60) days prior to any such Anniversary
Date. At least thirty (30) days prior to each Anniversary Date the
disinterested members of the Board of Directors of the Bank (the “Board”) will
conduct a comprehensive performance evaluation and review of Executive for
purposes of determining whether to extend the Agreement, and the results thereof
shall be included in the minutes of the Board’s meeting.
3. COMPENSATION
AND REIMBURSEMENT
(a) The
compensation specified under this Agreement shall constitute the salary and
benefits paid for the duties described in Section 1. The Bank
shall pay Executive as compensation a salary of not less than $192,864 per year
(“Base Salary”). During the period of this Agreement, Executive’s
Base Salary shall be reviewed at least annually; the first such review will be
made no later than January 31 of each year during the term of this Agreement and
shall be effective from the first day of said month through the end of the
calendar year. Such review shall be conducted by a Committee
designated by the Board, and the Board may increase, but not decrease,
Executive’s Base Salary (any increase in Base Salary shall become the “Base
Salary” for purposes of this Agreement). In addition to the Base
Salary provided in this Section 3(a), the
Bank shall provide Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Bank, on the same basis
(including cost) as such benefits are provided to other officers of the
Bank.
(b) In
addition to base salary provided for in Section 3(a) above, the Bank will
provide Executive with employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving benefit from immediately prior to the beginning of the term
of this Agreement, and the Bank will not, without Executive’s prior written
consent, make any changes in such plans, arrangements or perquisites which would
adversely affect Executive’s rights or benefits thereunder. Without
limiting the generality of the foregoing provisions of this Section 3(b),
Executive will be entitled to participate in or receive benefits under any
employee benefit plans including, but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans, employee
stock ownership plans, stock plans, health-and-accident plans, medical coverage
or any other employee benefit plan or arrangement made available by the Bank in
the future to its senior executives and key management employees, subject to and
on a basis consistent with the terms, conditions and overall administration of
such plans and arrangements. Executive will be entitled to incentive
compensation and bonuses as provided in any plan of the Bank in which Executive
is eligible to participate (and he shall be entitled to a pro rata distribution
under any incentive compensation or bonus plan as to any year in which a
termination of employment occurs, other than Termination for
Cause). Nothing paid to Executive under any such plan or arrangement
will be deemed to be in lieu of other compensation to which Executive is
entitled under this Agreement.
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(c) Executive
shall be entitled to paid time off in accordance with the standard policies of
the Bank for senior officers, but in no event less than thirty (30) days paid
time off during each year of employment. Executive shall receive his
Base Salary and other benefits during periods of paid time
off. Executive shall also be entitled to paid legal holidays in
accordance with the policies of the Bank. Executive shall also be
entitled to sick leave in accordance with the policies of the Bank, but in no
event less than the number of days of sick leave per year to which Executive was
entitled at the Effective Date of this Agreement.
4. OUTSIDE
ACTIVITIES
Executive
may serve as a member of the board of directors of business, community and
charitable organizations subject in each case to the prior approval of the
Board, provided that in each case such service shall not materially interfere
with the performance of his duties under this Agreement or present any conflict
of interest. Executive shall provide to the Board annually a list of
all organizations for which Executive serves as a director or in a similar
capacity for purposes of obtaining the Board’s approval of Executive’s service
on the boards of such organizations. Such service to and
participation in outside organizations shall be presumed for these purposes to
be for the benefit of the Bank, and the Bank shall reimburse Executive his
reasonable expenses associated therewith, provided such expenses are consistent
with and reimbursement is made pursuant to the Bank’s expense policy, and is
paid as soon as practicable but not later than March 15 of the year immediately
following the year in which the expense was incurred. Executive will
provide to the Chairman of the Bank or a committee of the Board of Directors of
the Bank at least quarterly a list of expenses incurred by Executive pursuant to
this Section 4, for purposes of determining the reasonableness of such
expenses.
5. WORKING
FACILITIES AND EXPENSES
Executive’s
principal place of employment shall be at the Bank’s principal executive
offices. The Bank shall provide Executive, at his principal place of
employment, with a private office, stenographic services and other support
services and facilities suitable to his position with the Bank and necessary or
appropriate in connection with the performance of his duties under this
Agreement. The Bank shall provide Executive with an automobile
suitable to the position of President and Chief Executive Officer of the Bank,
and such automobile may be used by Executive in carrying out his duties under
this Agreement. The Bank shall reimburse Executive for the cost of
maintenance, use and servicing of such automobile. The Bank shall
reimburse Executive for his ordinary and necessary business expenses incurred in
connection with the performance of his duties under this Agreement, including,
without limitation, fees for memberships in such clubs and organizations that
Executive and the Board mutually agree are necessary and appropriate to further
the business of the Bank, and travel and reasonable entertainment expenses,
provided such expenses are consistent with and reimbursement is made pursuant to
the Bank’s expense policy. All reimbursements under this Section 5
shall be paid as soon as practicable by the Bank; provided, however, that no
payment shall be made later than March 15 of the year immediately following the
year in which the expense was incurred.
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6.
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(a) The
provisions of this Section 6 shall apply upon the occurrence of an Event of
Termination (as herein defined) during Executive’s term of employment under this
Agreement. As used in this Agreement, an “Event of Termination” shall
mean and include any one or more of the following:
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(i)
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the
termination by the Bank or the Company of Executive’s employment hereunder
for any reason other than (A) Disability, as defined in Section 7(b)
below, or Retirement, as defined in Section 7(a) below, or (B)
Termination for Cause, as defined in Section 8 hereof;
or
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(ii)
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Executive’s
resignation from the Bank’s employ for Good Reason. Good Reason
shall mean any of the following events:
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(A)
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failure
to elect or reelect or to appoint or reappoint Executive as President and
Chief Executive Officer;
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(B)
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material
change in Executive’s function, duties, or responsibilities, which change
would cause Executive’s position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described in
Section 1, above;
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(C)
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liquidation
or dissolution of the Bank or Company other than liquidations or
dissolutions that are caused by reorganizations that do not affect the
status of Executive;
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(D)
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material
reduction in Executive’s Base Salary or relocation of Executive’s
principal place of employment by more than 25 miles from its location as
of the date of this Agreement; or
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(E)
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material
breach of this Agreement by the Bank.
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Upon
the occurrence of any event described in clauses (ii) (A), (B), (C),
(D) or (E), above, Executive shall have the right to elect to terminate
his employment under this Agreement by resignation within ninety (90) days
after the initial event giving rise to said right to elect. The
Bank shall have at least thirty (30) days to remedy any event set forth in
clauses (ii)(A) through (E) above; provided, however, that the Bank shall
be entitled to waive such period and make an immediate payment
hereunder. If the Bank remedies
the event within such thirty (30) day cure period, then no
Good Reason shall be deemed to exist with respect to such event. If the Bank does not remedy the
event within such thirty (30) day cure period, then
Executive may deliver a Notice of Termination, as defined in Section 9(a)
below, for Good Reason at any time within sixty (60) days following the
expiration of such cure period. Notwithstanding the
preceding sentence, in the event of a continuing breach of this Agreement
by the Bank, Executive, after giving due notice within the prescribed time
frame of an initial event specified above, shall not waive any of his
rights solely under this Agreement and this Section 6 by virtue of
the fact that Executive has submitted his resignation but has remained in
the employment of the Bank and is engaged in good faith discussions to
resolve any occurrence of an event described in clauses (A), (B), (C), (D)
or (E), above.
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(iii)
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Executive’s
involuntary termination by the Bank or the Company on the effective date
of, or at any time following, a Change in Control, or (B) Executive’s
resignation from employment with the Bank or the Company following a
Change in Control as a result of the Bank’s (or any successor thereto)
failure to renew or extend this Agreement, or (C) Executive’s
resignation from employment with the Bank or the Company (or any successor
thereto) following a Change in Control for Good Reason. For
these purposes, a Change in Control of the Bank or the Company shall mean
a change in control of a nature that: (i) would be required to be reported
in response to Item 5.01 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) 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 Act) is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of
Company’s outstanding securities, except for any securities purchased by
the Bank’s employee stock ownership plan or trust; 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
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 Company or similar
transaction in which the Bank or Company is not the surviving institution
occurs or is effected; or (d) a tender offer is made for 25% or
more of the voting securities of the Company and the shareholders owning
beneficially or of record 25% or more of the outstanding securities of the
Company have tendered or offered to sell their shares pursuant to such
tender offer and such tendered shares have been accepted by the tender
offeror. Notwithstanding anything in this subsection to the
contrary, a Change in Control shall not be deemed to have occurred upon
the conversion of the Company’s mutual holding company parent to stock
form, or in connection with any reorganization used to effect such a
conversion.
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(b) Upon
the occurrence of an Event of Termination, as defined in Section 6(a)(i),
(ii) or (iii), on the Date of Termination, as defined in Section 9(b), the
Bank shall pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, his earned but unpaid salary as of the Date
of Termination of employment with the Bank and a sum equal to three (3) times
the sum of (i) Executive’s Base Salary and (ii) the highest rate of bonus
awarded to Executive during the prior three years. Any payments
hereunder shall be made in a lump sum within thirty (30) days after the Date of
Termination; provided, however, if Executive is a “Specified Employee,” as
defined in Treasury Regulation 1.409A-1(i), then, solely to the extent required
to avoid penalties under Code Section 409A, such payment shall be delayed until
the first day of the seventh month following the Executive’s Date of
Termination. Such payments shall not be reduced in the event
Executive obtains other employment following termination of
employment.
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(c)
Upon the occurrence of an Event of Termination, the Bank will cause to be
continued life insurance and non-taxable medical, dental, and disability
coverage substantially identical to the coverage maintained by the Bank for
Executive prior to his termination. Such coverage shall continue at the
Bank’s expense for thirty-six (36) months from the Date of
Termination.
(d) Notwithstanding the
preceding paragraphs of this Section, in the event that the aggregate payments
or benefits to be made or afforded to Executive under this Section (the
“Termination Benefits”) would be deemed to include an “excess parachute payment”
under Section 280G of the Code or any successor thereto, then the cash severance
payable under this Section 6 shall be reduced by the minimum amount
necessary to result in no portion of the payments and benefits payable by the
Bank under Section 6 being non-deductible pursuant to Code Section 280G and
subject to excise tax imposed under Code Section 4999.
(e) For purposes
of Section 6, “Event of Termination” as used herein shall mean “Separation from
Service” as defined in Code Section 409A and the regulations promulgated
thereunder, such that the Bank and Executive reasonably anticipate that the
level of bona fide services Executive would perform after termination would
permanently decrease to a level that is less than 50% of the average level of
bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period.
7. TERMINATION
UPON RETIREMENT, DISABILITY OR DEATH
(a) For purposes
of this Agreement, termination by the Bank of Executive’s employment based on
“Retirement” shall mean termination of Executive’s employment by the Board of
Directors of the Bank and the Board of Directors of the Company upon Executive’s
attainment of age 65, or such later date as determined by the Board of Directors
of the Bank. Upon termination of Executive’s employment because of
Retirement, Executive shall be entitled to all benefits under any retirement
plan of the Bank and other plans to which Executive is a party, but Executive
shall not be entitled to the Termination Benefits specified in
Sections 6(b) and 6(c) hereof.
(b) In the event
Executive suffers a Disability,, Executive may receive the benefits provided
under any disability program sponsored by the Company or the Bank. To
the extent such benefits are less than Executive’s Base Salary as defined in
Section 3(a) hereof on the Date of Termination, the Bank shall (i) continue to
pay Executive the difference between (x) the benefits provided under any
disability program sponsored by the Company or the Bank and (y) his Base Salary
as defined in Section 3(a), for a period of one (1) year following the Date of
Termination by reason of Disability in accordance with the regular payroll
practices of the Bank, and (ii) cause to be continued life insurance and
non-taxable medical and dental coverage substantially comparable, as reasonably
or customarily available, to the coverage maintained by the Bank for Executive
prior to the Date of Termination due to Executive’s Disability (except to the
extent such coverage may be changed in its application to all Bank employees or
is not available on an individual basis to an employee terminated for
Disability), for the remaining term of the Agreement or one (1) year, whichever
is the longer period of time. Any amounts actually paid to Executive
pursuant to any disability insurance or other similar such program which the
Bank has provided or may provide on behalf of its employees or pursuant to any
xxxxxxx’x or social security disability program shall reduce the amounts to be
paid to Executive pursuant to this paragraph. For purposes of this
Section 7(b), termination of employment based on “Disability” shall be construed
to comply with Code Section 409A and shall be deemed to have occurred if
Executive (i) is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death, or last for a continuous period of not less than 12
months; (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last for a continuous
period of not less than 12 months, Executive is receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of the Bank or Company; or (iii) is determined to be
totally disabled by the Social Security Administration.
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(c) In the event
of Executive’s death during the term of the Agreement, his estate, legal
representatives or named beneficiaries (as directed by Executive in writing)
shall be paid Executive’s Base Salary, as defined in Paragraph 3(a), at the
rate in effect at the time Executive’s death for a period of one (1) year from
the date of Executive’s death, and the Bank will continue to provide non-taxable
medical, dental and other insurance benefits normally provided to Executive’s
family for two (2) years after Executive’s death.
8. TERMINATION
FOR CAUSE
(a) 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 minor traffic violations or similar
offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement. In determining incompetence, the acts or omissions
shall be measured against standards generally prevailing in the savings
institutions industry.
(b) The Bank may
not terminate Executive 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 entire membership of the Board at a meeting of the Board called and held for
that purpose, 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. Notwithstanding anything in this
Agreement to the contrary, Executive shall not have the right to receive
compensation or other benefits for any period after Termination for
Cause. Any stock options granted to Executive under any stock option
plan of the Bank, the Company or any subsidiary or affiliate thereof, shall
become null and void effective upon Executive’s receipt of Notice of Termination
for Cause pursuant to Section 9 hereof, and shall not be exercisable by
Executive at any time subsequent to such Termination for Cause. Any
unvested stock awards granted to Executive under any stock incentive plan of the
Bank or the Company shall be forfeited. In the event of Executive’s
Termination for Cause, Executive shall resign as a director of the Company, the
Bank and any subsidiary or affiliate of the Company or the Bank.
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9. NOTICE
(a) Any
termination by the Bank or by Executive shall be communicated by Notice of
Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision so
indicated.
(b) “Date of
Termination” shall mean (A) if Executive’s employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided
that he shall not have returned to the performance of his duties on a full-time
basis during such thirty (30) day period), and (B) if his employment is
terminated for any other reason, the date specified in the Notice of
Termination.
(c) If the party
receiving a Notice of Termination desires to dispute or contest the basis or
reasons for termination, the party receiving the Notice of Termination must
notify the other party within thirty (30) days after receiving the Notice of
Termination that such a dispute exists, and shall pursue the resolution of such
dispute in good faith and with reasonable diligence pursuant to Section 20
of this Agreement. During the pendency of any such dispute, neither
the Company nor the Bank shall be obligated to pay Executive compensation or
other payments beyond the Date of Termination. Any amounts paid to
Executive upon resolution of such dispute under this Section shall be offset
against or reduce any other amounts due under this Agreement.
10. POST-TERMINATION
OBLIGATIONS
(a) All payments
and benefits to Executive under this Agreement shall be subject to Executive’s
compliance with paragraph (b) of this Section during the term of this Agreement
and for one (1) full year after the expiration or termination
hereof.
(b) Executive
shall, upon reasonable notice, furnish such information and assistance to the
Bank as may reasonably be required by the Bank in connection with any litigation
in which it or any of its subsidiaries or affiliates is, or may become, a
party.
11. NON-COMPETITION
(a) Upon any
termination of Executive’s employment hereunder, other than a termination
(whether by resignation, voluntary or involuntary) in connection with a Change
in Control, as a result of which the Bank is paying Executive benefits under
Section 0 of this Agreement,
Executive agrees not to compete with the Bank and/or the Company for a period of
one (1) year following such termination within twenty-five (25) miles of
any existing branch of the Bank or any subsidiary of the Company or within
twenty-five (25) miles of any office for which the Bank, the Company or a Bank
subsidiary of the Company has filed an application for
regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board. Executive agrees that during such period
and within said area, cities, towns and counties, Executive shall not work for
or advise, consult or otherwise serve with, directly or indirectly, any entity
whose business materially competes with the depository, lending or other
business activities of the Bank and/or the Company. The parties
hereto, recognizing that irreparable injury will result to the Bank and/or the
Company, its business and property in the event of Executive’s breach of this
Subsection 11(a) agree that in the event of any such breach by Executive,
the Bank and/or the Company will be entitled, in addition to any other remedies
and damages available, to an injunction to restrain the violation hereof by
Executive, Executive’s partners, agents, servants, employers, employees and all
persons acting for or with Executive. Executive represents and admits
that Executive’s experience and capabilities are such that Executive can obtain
employment in a business engaged in other lines and/or of a different nature
than the Bank and/or the Company, and that the enforcement of a remedy by way of
injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the Bank
and/or the Company from pursuing any other remedies available to the Bank and/or
the Company for such breach or threatened breach, including the recovery of
damages from Executive.
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(b) Executive
recognizes and acknowledges that the knowledge of the business activities and
plans for business activities of the Bank and affiliates thereof, as it may
exist from time to time, is a valuable, special and unique asset of the business
of the Bank. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever (except for
such disclosure as may be required to be provided to any federal banking agency
with jurisdiction over the Bank or Executive). Notwithstanding the
foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Bank, and Executive may
disclose any information regarding the Bank or the Company which is otherwise
publicly available. In the event of a breach or threatened breach by
Executive of the provisions of this Section, the Bank will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Bank or affiliates thereof, or from rendering any services to any person, firm,
corporation, other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Bank from pursuing any other remedies available to
the Bank for such breach or threatened breach, including the recovery of damages
from Executive.
12. SOURCE OF
PAYMENTS
(a) All payments
provided in this Agreement shall be timely paid in cash or check from the
general funds of the Bank. The Company, however, guarantees payment
and provision of all amounts and benefits due hereunder to Executive and, if
such amounts and benefits due from the Bank are not timely paid or provided by
the Bank, such amounts and benefits shall be paid or provided by the
Company.
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(b) Notwithstanding any
provision herein to the contrary, to the extent that payments and benefits, as
provided by this Agreement, are paid to or received by Executive under an
Employment Agreement with the Company, if any, such compensation payments and
benefits paid the Company will be subtracted from any amounts due simultaneously
to Executive under similar provisions of this Agreement. Payments
pursuant to this Agreement and a Company Employment Agreement,
if any, shall be allocated in proportion to the level of activity and
the time expended on such activities by Executive as determined by the Company
and the Bank on a quarterly basis.
13. EFFECT ON EMPLOYEE
BENEFITS PLANS OR PROGRAMS
The
Bank’s or the Company’s Board of Directors may terminate Executive’s employment
at any time, but any termination of Executive’s employment, other than a
Termination for Cause, shall have no effect on or prejudice the vested rights of
Executive under the Company’s or the Bank’s qualified or non-qualified
retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group
life, health (including hospitalization, medical and major medical), dental,
accident and long term disability insurance plans or other employee benefit
plans or programs, or compensation plans or programs in which Executive was a
participant. Executive shall not have the right to receive any
compensation or other benefits for any period after Termination for Cause as
defined in Section 8 hereinabove, except as otherwise required by
applicable law.
14. REQUIRED REGULATORY
PROVISIONS
(a) 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)
(12 U.S.C. §1818(e)(3)) or 8(g)(1) (12 U.S.C. §1818(g)(1)) of the Federal
Deposit Insurance Act (“FDIA”), as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, the Bank’s obligations under this
Agreement 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 its contract obligations were suspended and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.
(b) 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) (12 U.S.C.
§1818(e)(4)) or 8(g)(1) (12 U.S.C. §1818(g)(1)) of FDIA, all obligations of the
Bank under this Agreement shall terminate as of the effective date of the order,
but vested rights of the contracting parties shall not be affected.
(c) If the Bank
is in default as defined in Section 3(x)(1) (12 U.S.C. §1813(x)(1)) of FDIA, all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting
parties.
(d) All
obligations under this Agreement shall be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued
operation of the Bank, (i) by the Director of OTS or his or her designee, 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) (12 U.S.C. §1823(c)) of
FDIA; or (ii) by the Director of OTS or his or her designee at the time the
Director of OTS or his or her designee approves a supervisory merger to resolve
problems related to operations of the Bank or when the Bank is determined by the
Director of OTS or his or her designee 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.
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(e) Notwithstanding
anything herein contained to the contrary, any payments to Executive by the
Company, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of FDIA, 12 U.S.C.
Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part
359.
15. 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 the Company and their respective successors and assigns.
16. ENTIRE AGREEMENT;
MODIFICATION AND WAIVER
(a) This
instrument contains the entire agreement of the parties relating to the subject
matter hereof, and supercedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof, except
that the parties acknowledge that this Agreement shall not affect any of the
rights and obligations of the parties under any agreement or plan
entered into with or by the Bank or the Company pursuant to which Executive may
receive compensation or benefits except as set forth in Section 12(b)
hereof.
(b) This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.
(c) No term or
condition of this Agreement shall be deemed to have been waived, nor shall there
be any estoppel against the enforcement of any provision of this Agreement,
except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
17. SEVERABILITY
If, for
any reason, any provision of this Agreement, or any part of any provision, is
held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such other
provision and part thereof shall to the full extent consistent with law continue
in full force and effect.
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18. HEADINGS FOR
REFERENCE ONLY
The
headings of sections and paragraphs herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
19. GOVERNING
LAW
This
Agreement shall be governed by the laws of the State of New Jersey but only to
the extent not superseded by federal law.
20. ARBITRATION
Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted by one arbitrator mutually
agreed upon by the Executive and the Bank. The arbitration shall
occur in a location within fifty (50) miles from the location of the Bank in
accordance with the American Arbitration Association’s National Rules for the
Resolution of Employment Disputes then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.
21. PAYMENT OF LEGAL
FEES
All
reasonable 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, provided that the dispute or interpretation has been
resolved in Executive’s favor, and that such reimbursement shall occur as soon
as practicable but not later than two and one-half months after the dispute is
settled or resolved in Executive’s favor.
22. INDEMNIFICATION
During
the term of this Agreement and for a period of six (6) years thereafter,
the Bank or the Company shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors and officers
liability insurance policy at its expense. Subject to 12 C.F.R.
§545.121, the Bank or the Company shall indemnify Executive (and his heirs,
executors and administrators) to the fullest extent permitted under federal law
against all expenses and liabilities reasonably incurred by him in connection
with or arising out of any action, suit or proceeding in which he may be
involved by reason of his having been a director or officer of the Bank or the
Company (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 (such settlements must be approved by the
Board of Directors of the Bank or the Company). If such action, suit
or proceeding is brought against Executive in his capacity as an officer or
director of the Bank, however, such indemnification shall not extend to matters
as to which Executive is finally adjudged to be liable for willful misconduct in
the performance of his duties.
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23. SUCCESSOR AND ASSIGNS
The Bank
shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Bank or the Company, expressly and unconditionally to
assume and agree to perform the Bank’s and the Company’s obligations under this
Agreement, in the same manner and to the same extent that the Bank and/or the
Company would be required to perform if no such succession or assignment had
taken place.
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