EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
(this "Agreement") is made
and entered into as of November 17, 2008, by and among the Citizens
South Bank
(the "Bank"), a federally chartered savings bank and a
wholly-owned
subsidiary
of the Citizens South
Banking Corporation (the "Company"), and James Louis
Brewer (the "Executive").
WHEREAS, the Executive
is currently employed as a Senior Vice President of
the Bank, pursuant to an employment agreement between the Bank and
the Executive
originally entered into as of September 1, 2007 (the "Original
Agreement");
WHEREAS, the Bank
desires to assure
itself of the
continued services
of
Executive and in
consideration
for such continued services is willing to
establish minimum
severance benefits for the Executive in the event of a
termination of employment;
WHEREAS, the Bank
desires to amend and restate the Original Agreement in
order to make changes to comply with Section 409A of the Internal
Revenue Code
of 1986, as amended (the "Code"), as well as certain other
changes;
WHEREAS, the Bank
desires to ensure that the Bank is assured of the
continued
availability of
the Executive's services as provided in this
Agreement;
WHEREAS, the Executive is willing to serve the Bank on the terms
and
conditions hereinafter set forth; and
NOW
THEREFORE, in
consideration
of these premises,
the mutual
covenants
contained herein,
and other good and
valuable consideration the receipt and
sufficiency of which
are hereby
acknowledged,
the parties hereto agree as
follows.
ARTICLE 1
EMPLOYMENT
The
Bank hereby employs the Executive as Senior Vice President in
accordance with the
terms and conditions
of this Agreement and
for the period
stated in Article 3. The Executive hereby accepts employment in accordance with
the terms and conditions of this Agreement, effective on the date first
written
above (the
"Effective
Date") and for the period stated in Article 3. The
Executive also agrees
to serve as an officer or director of any subsidiary or
affiliate of the Bank,
if elected.
For purposes of this
Agreement,
the term
"affiliate" means any
entity that directly,
or indirectly through
one or more
intermediaries, controls, is controlled by, or is under common
control with, the
Bank.
ARTICLE 2
DUTIES
As
Senior Vice President of the Bank, the Executive shall serve under the
direction of the Bank's President and Chief Executive Officer ("CEO"), and the
Bank's Board of Directors (the "Board"). The Executive shall report
directly to
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the Executive Vice President, Commercial Banking Group, or such
other executive
officer as
directed by the President and CEO. He shall serve the Bank
faithfully,
diligently,
competently, and to
the best of his
ability, and he
shall exclusively devote his full time, energy, and attention to
the business of
the Bank and to the
promotion of the Bank's interests throughout the term of
this Agreement.
Without the written consent of the President and CEO, the
Executive shall not render services to or for any person, firm,
corporation, or
other entity or
organization in
exchange for
compensation,
regardless of the
form in which such
compensation is paid
and regardless
of whether it is
paid
directly or indirectly to the Executive. Nothing in this Article 2
shall prevent
the Executive from managing his personal investments and affairs,
provided that
doing so does not
interfere with the
proper performance of his duties and
responsibilities with the Bank.
ARTICLE 3
TERM OF EMPLOYMENT
The
term of this
Agreement shall commence as of the date first above
written and shall expire on September 1, 2010.
ARTICLE 4
COMPENSATION AND OTHER BENEFITS
4.1
BASE SALARY. In
consideration
of the Executive's
performance of his
obligations under this Agreement, the Bank shall pay or cause to be
paid to the
Executive a salary at the annual rate of not less than $135,000,
payable in such
installments as
employees in general are paid. The Executive's salary may be
increased but may not be reduced without his written consent.
It is anticipated
that the Executive's
salary will be increased annually in conjunction with
his
annual performance
review. The Executive's salary, as the same may be increased
from time to time, is referred to in this Agreement as the "Base
Salary."
4.2
BENEFIT PLANS AND PERQUISITES. The Executive shall be entitled
throughout the term of
this Agreement to
participate in any and all officer or
employee compensation,
bonus, incentive, and
benefit plans in effect from time
to time and available
to employees and officers in general (on such
terms as
such plans are made
available to employees and officers), including, without
limitation, plans providing pension, medical, dental, disability,
and group life
benefits, including
the Bank's
401(k) Plan,
and to receive any and
all other
fringe benefits
provided from time to time, provided that the Executive
satisfies the eligibility requirements for any such plans or
benefits.
4.3
VACATION. The
Executive shall be
entitled to paid annual vacation and
sick leave in accordance with the policies established from time to time by
the
Bank. The Executive
shall not be entitled
to any additional
compensation for
failure to use
allotted vacation or
sick leave,
nor shall the
Executive be
entitled to accumulate
unused sick leave or
vacation days from one year to the
next, unless permitted under the policies of the Bank then in
effect.
4.4
INDEMNIFICATION.
(a)
The Bank shall
indemnify Executive
to the fullest
extent permitted
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
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involved by reason of his having been an officer of the Bank
(whether or not he
continues to
be an 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),
provided that the
Bank shall not be
required to indemnify or reimburse Executive for legal
expenses or
liabilities
incurred in connection with an action, suit or
proceeding arising
from any illegal or
fraudulent act
committed by Executive.
Any such
indemnification shall
be made consistent
with Section 545.121 of the
Office of Thrift
Supervision
("OTS") Regulations and Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. ss. 1828(k), and the
regulations issued
thereunder in 12 C.F.R. Part 359.
(b)
No indemnification shall be made unless the Bank gives the OTS at
least
60 days' notice of its intention to make such indemnification. Such
notice shall
state the facts on which the action arose, the terms of any
settlement, and
any
disposition of the
action by a court. Such notice, a copy thereof, and a
certified copy of the resolution containing the required
determination
by the
Board, and shall be sent to the regional director of the OTS, who
shall promptly
acknowledge receipt
thereof. The notice
period shall run from the date of such
receipt. No such
indemnification
shall be made if the
OTS advises the Bank in
writing within such notice period, of its objection thereto.
ARTICLE 5
TERMINATION OF EMPLOYMENT
5.1
TERMINATION BY THE EMPLOYER.
(a)
Death or Disability. The Executive's employment shall terminate
automatically and
without further
obligation
on the date of the
Executive's
death (other than the payment of Base Salary through the date of
death).
The
Bank may terminate
this Agreement if the
Executive is disabled.
For
purposes of this
Agreement, the
Executive shall be
deemed to be "disabled" if
the Executive: (i) is
unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that
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 that can be
expected to result in
death, or last for a
continuous
period of not less than 12 months, the 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 (iii) is determined to be totally
disabled by the Social Security Administration. The Executive shall be
entitled
to receive benefits
under any short or long-term disability plan maintained by
the Bank.
(b)
Termination Without
Cause. With written notice to the Executive thirty
(30) days in advance, the Bank may terminate the Executive's
employment for any
reason and without Cause. If requested by the Bank in the
aforementioned notice,
upon receipt of the notice Executive shall refrain from
performing services
at
the offices of the Bank, and/or refrain from acting or holding
himself out to
the public
as acting on behalf of the Bank (and any affiliates thereof).
Notwithstanding the
foregoing,
if Executive is requested to refrain from
providing any further services as outlined in the preceding
sentence, he shall
nevertheless be entitled to receive his Base Salary and all
benefits
previously
provided him for the duration of the thirty day notice period.
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(c)
Termination
With Cause.
Effective on the date on which termination
notice is given to the Executive and without the requirement of advance notice
to the Executive, the
Bank may terminate the Executive's employment with Cause.
For purposes
of this Agreement, "Cause" means the Executive's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving
personal profit,
material breach of the Bank's Code of Ethics, material
violation of the
Sarbanes-Oxley
requirements for
officers of public companies
that in the
reasonable
opinion of the CEO or the Board will likely cause
substantial financial
harm or substantial injury to the reputation of the Bank,
willfully engaging in
actions that in the reasonable opinion of the CEO or the
Board will likely cause substantial financial harm or substantial
injury to the
business reputation of
the Bank, intentional
failure to perform stated duties,
willful violation of
any law, rule or
regulation (other than
routine traffic
violations or similar
offenses) or final
cease-and-desist
order, or material
breach of any provision of the contract.
5.2
TERMINATION
BY THE EXECUTIVE. The Executive may terminate his
employment with written notice to the Bank thirty (30) days in
advance, whether
with or without Good Reason. If the Executive terminates with Good Reason,
the
termination will take
effect at the
conclusion of the 30-day period unless the
event or circumstance
constituting
Good Reason is cured
by the Bank or unless
the notice of termination for Good Reason is revoked by the
Executive within the
30-day period.
For purposes of this Agreement, "Good Reason" means the
occurrence of any of the following events:
(a)
REDUCED BASE SALARY OR BENEFITS: a material reduction in the benefits
and perquisites,
including a reduction in Base Salary, being provided to
Executive relative to
those being provided as of the Effective Date (except for
any reduction
that is part of a
reduction in pay or benefits that is generally
applicable to officers or employees),
(b)
REDUCED
RESPONSIBILITIES OR
STATUS: assignment
to the Executive of
duties that are materially inconsistent with the Executive's
position as Senior
Vice President,
(c)
MATERIAL BREACH:
a material breach of
this Agreement by the Bank that
is not corrected within thirty (30) days following notice from
Executive, and
(d)
RELOCATION
OF THE EXECUTIVE: requiring the Executive to change his
principal work location, to any location that is more than fifty
(50) miles from
the location on the date of this Agreement.
5.3
NOTICE. Any purported termination by the Bank or by the Executive
shall
be communicated by
written notice of termination to the other. The notice must
state the specific
termination provision
of this Agreement relied upon. Except
for termination for Cause, which becomes effective upon
receipt by Executive of
the notice, a
termination of
employment shall
become effective 30
days after
receipt of the notice.
If termination
is for Cause or with
Good Reason,
the
notice must state in reasonable detail the facts and circumstances forming the
basis for termination.
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ARTICLE 6
COMPENSATION AND BENEFITS AFTER TERMINATION
6.1
CAUSE. If the Executive's employment terminates for Cause, the
Executive shall
receive the Base
Salary to which he was
entitled through
the
date on which
termination becomes
effective and any other benefits that may be
available to him under
the Bank's benefit
plans and policies in
effect on the
date of termination.
Executive shall not be entitled to any further payments or
benefits.
6.2
TERMINATION
BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. If the
Executive terminates
employment other than for Good Reason, the Executive shall
receive the Base Salary to which he is entitled, and any other
benefits that may
be available to him under the Bank's benefit plans and policies, through the
date on which his termination becomes effective.
6.3
CONTINUED BASE SALARY IN THE CASE OF TERMINATION BECAUSE OF
DISABILITY.
If the Executive's
employment terminates
because of disability,
the Executive
shall receive the benefits provided under any disability
program sponsored by
the Bank. To the
extent that such benefits are less than Executive's Base
Salary, the Bank
shall pay the
Executive an amount equal to the difference
between such disability plan benefits and the amount of Executive's
Base Salary
for the remaining term of this Agreement. Any payments required hereunder
shall
commence within
thirty (30) days from the Executive's termination due to
disability and be payable in semi-monthly installments.
6.4
TERMINATION BY THE
BANK WITHOUT CAUSE AND TERMINATION BY EXECUTIVE FOR
GOOD REASON OTHER THAN FOLLOWING A CHANGE IN CONTROL. If the Bank
terminates the
Executive's employment
without Cause or if the Executive terminates employment
for Good Reason, the Executive shall (i) continue to receive his
Base Salary and
other employee benefits through the date of the termination, (ii)
receive a lump
sum cash payment
from the Bank equal to
one-half of the Base
Salary in effect
immediately prior to
the notice of termination, which payment shall be made by
the Bank no later than the date of termination, or in the event the
Executive is
a Specified
Employee
(within
the meaning of Treasury Regulations
ss.1.409A-1(i)), and
to the extent
necessary to avoid penalties under Code
Section 409A,
payment shall be made to the Executive on the first day of
the
seventh month following the date of termination, and (iii) continue to receive
life insurance
and non-taxable medical and dental coverage, substantially
identical to the coverage maintained by the Bank for the
Executive
immediately
prior to his
termination (except to
the extent
such coverage is changed in
application to all
employees or officers
