EXHIBIT 10.12
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 85 West Broad Street, Bridgeton, New Jersey 08302, and
William F. Whelan (“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 with 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 Executive Vice President and
Operations Officer of the Bank and Executive Vice President and
Operations Officer of the Company. During the period of
his employment hereunder, except for periods of absence, Executive
shall faithfully perform his duties hereunder and shall perform the
administrative and management services for the Bank that are
customarily performed by persons in a similar executive officer
capacity. Executive shall be responsible for the overall
administration of the Bank and shall develop and implement
operating policies and procedures for the Bank and shall monitor
the operations of the Bank including data processing, technical
services, branch administration and personnel
services. Executive also agrees to serve, if elected, as
a director of the Company or the Bank, and as an officer and
director of any subsidiary or affiliate of the Bank.
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 twenty-four (24) 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 Dave 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 two (2) 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 President of the Bank or the Compensation
Committee of the Board of Directors (the “Board”) will
conduct a comprehensive performance evaluation and review of
Executive for purposes of determining whether to renew this
Agreement and shall make a recommendation to the Board, and the
results thereof and the Board’s decision 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 $125,298 per year
(“Base Salary”). Such Base Salary shall be
payable weekly. 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 the President or
a committee designated by the President, and the President or the
committee 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.
(c) Executive
shall be entitled to paid time off in accordance with the standard
polices 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.
Executive may serve as an officer or 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, officer or in a similar capacity,
for purposes of obtaining the Board’s approval of
Executive’s service to 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 for 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 shall 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 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.
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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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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Executive’s resignation from the
Bank’s employ for Good Reason. Good Reason shall
mean any of the following events:
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failure to
elect or reelect or to appoint or reappoint Executive as Executive
Vice President and Operations Officer;
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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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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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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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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) days cure period, then Executive may deliver a Notice
of Termination, as defined in Section 9(a) below, for Good Reason
at any time within thirty (30) 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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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 the
Company’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 Ev
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