AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Amended and Restated Employment Agreement
is made effective as of the 18 th 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 L. Joseph Stella, III
(“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
Executive Vice President and Chief Financial 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 Executive Vice President and Chief
Financial Officer of the Bank and Executive Vice President and
Chief Financial 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 that are customarily performed by persons in
a similar executive officer capacity. Executive shall be
responsible for overseeing and managing the financial operations
and functions of the Bank, including participating in determining
deposit and loan rates, providing guidance regarding investment
decisions, serving as a trustee of the Bank’s pension plan,
assisting in negotiating leases and providing direction for the
development of the Bank’s business
plans. Executive shall also be responsible for
developing the fiscal plans and policies of the Bank, for preparing
the monthly, quarterly and annual financial statements of the Bank
and the Company and for reviewing such financial statements with
the Board of Directors and management of the Bank and the
Company. Executive also agrees to serve, if elected, as
a director of the Company or the Bank, and as an officer and
director of the 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 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 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 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 $ 133,707 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
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.
Executive may serve as an officer or 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 such 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 Chief Financial 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 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 made 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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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 s
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