TERRITORIAL BANCORP INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 13th day of
November, 2009, by and between Territorial Bancorp Inc., a corporation located
at 1132 Bishop Street, 22nd Floor, Honolulu, Hawaii 96813 (the "Company"), and
Allan S. Kitagawa ("Executive").
WITNESSETH
WHEREAS, Executive is currently employed as Chief Executive Officer and
President of Territorial Savings Bank (the "Bank"); and
WHEREAS, the Bank has adopted a Plan of Conversion and Reorganization
pursuant to which the Bank has become a wholly owned subsidiary of the Company
(the "Conversion"); and
WHEREAS, the Company desires to assure itself of the continued availability
of the Executive's services as provided in this Agreement; and
WHEREAS, Executive is willing to serve the Company on the terms and
conditions hereinafter set forth; and
WHEREAS, Executive has previously entered into a separate employment
agreement with the Bank.
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. Employment. During the term of this Agreement, which is effective as of the
date first set forth above (the "Commencement Date"), Executive shall continue
to serve in the capacity of Chief Executive Officer and President of the
Company. Executive shall continue to render such administrative and management
services to the Company as are currently rendered and as are customarily
performed by persons situated in a similar executive capacity. Executive shall
continue to promote the business of the Company. Executive's other duties shall
be such as the Board of Directors of the Company (the "Board of Directors" or
"Board") may from time to time reasonably direct, including normal duties as an
officer of the Company.
2. Service on the Board of Directors. During the term of this Agreement,
Executive will continue to serve on the Board of Directors of the Company as a
director. If at any time during the term of this Agreement Executive shall fail
to be re-nominated to the Board of Directors or re-appointed as the Chairman of
the Board other than for reasons of Just Cause (as defined in Section 9(d) of
this Agreement), Executive shall have "Good Reason" (as defined in Section 9(b)
of this Agreement) to terminate his employment under this Agreement and
Executive shall have no further obligations under this Agreement.
3. Base Compensation. The Company agrees to pay Executive during the Term of
this Agreement (as hereinafter defined in Section 7) a base salary at the rate
of $801,954 per annum,
payable in accordance with the customary payroll practices of the Company;
provided, however, that the rate of Executive's base salary shall be reviewed by
the Board of Directors not less often than annually, and Executive shall be
entitled to receive annual increases at such percentage or in such an amount as
the Board of Directors, in its sole discretion, may decide.
4. Discretionary Bonus. Executive shall be entitled to receive an annual bonus
in an amount which is based on the bonus program maintained by the Company as of
the date of this Agreement and shall be eligible to participate in any future
bonus program adopted by the Company in an equitable manner. No other
compensation provided for in this Agreement shall be deemed a substitute for
Executive's right to receive bonuses when and as declared by the Board of
Directors or as provided for by any plan or program of the Company.
5. Expenses. During the term of this Agreement, Executive shall be entitled to
receive prompt reimbursement of all reasonable expenses incurred (in accordance
with the policies and procedures of the Company) in performing services under
this Agreement, provided that Executive properly accounts for expenses in
accordance with the policies of the Company and provided further that all such
reimbursements pursuant to this Section 5 shall be paid promptly by the Company
and in any event no later than March 15 of the year immediately following the
year in which the expense was incurred.
6. Employee Benefits.
(a) Participation in Retirement and Executive Benefit Plans. Executive
shall be entitled, while employed under the terms of this Agreement, to receive
all benefits under any tax-qualified or non-qualified employee benefit plan or
arrangement in effect as of the date of this Agreement or that the Company
implements at any time during the term of this Agreement. Executive shall be
entitled to participate in such future plans or arrangements on the same terms
as other employees of the Company or as established by the Company for Executive
or other selected employees.
(b) Fringe Benefits. Executive shall be entitled to receive any benefits
under any fringe benefit plan or policy that is in effect as of the date of this
Agreement, including any discount or reduced fee employee loan program, or that
the Company implements at any time during the term of this Agreement, on the
same terms as the Company's senior management employees. Nothing paid to
Executive under any plan or arrangement presently in effect or made available in
the future will be deemed to be in lieu of base salary or other compensation to
Executive under this Agreement.
(c) Automobile, Cellular Phone Use, Computer and Memberships. The Company
or the Bank shall provide Executive with the use of an automobile in accordance
with the Company's or the Bank's automobile policy for executive vice presidents
and above, as in effect from time to time. The Company or the Bank shall
annually include on Executive's Form W-2 any amount attributable to Executive's
personal use of such automobile. The Company or the Bank shall also provide
Executive with the use of a cellular phone and shall pay (or reimburse
Executive) for all reasonable expenses related to the use of such phone. The
Company or the Bank shall also provide Executive with the use of a personal
digital assistant or similar device, and home, portable and office computers and
shall pay (or reimburse Executive) for all
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reasonable expenses related to the use of such computers or devices. In
addition, the Company or the Bank shall reimburse or pay Executive amounts
sufficient to establish or maintain membership in any club or organization
(business, social or otherwise) to which Executive is a member as of the date of
this Agreement, including but not limited to the Waialae Country Club and Plaza
Club (including such fees or dues relating to the use of the club or
organization).
(d) Paid Leave Time. Executive shall be entitled to leave time in
accordance with the standard policies or practices of the Company for senior
executive officers, as in effect from time to time.
(e) Financial Planning. Executive shall be entitled to use the services of
a tax professional and a personal financial planning professional (which may be
the same person or entity for both services (the "Tax Service Professional") of
his choosing and seek reimbursement by the Company for the reasonable cost of
such Tax Service Professional actually incurred by the Executive. The services
to be provided shall include (i) the preparation of all required federal, state
and local personal income tax returns, (ii) advice with respect to federal,
state and local income tax treatment of cash and other forms of compensation
paid to the Executive by the Company and (iii) investment and retirement
counseling and estate planning. Notwithstanding the foregoing, the annual cost
to the Company of such services shall not exceed $6,000 (the "Annual Cost").
Reimbursement of the Annual Cost shall be paid promptly by the Company and in
any event no later than March 15 of the year immediately following the year in
which the Annual Cost was incurred. The Annual Cost shall be reviewed annually
by the Compensation Committee of the Company and, if increased, shall be
reflected in an addendum hereto.
7. Term of Agreement. Executive's employment under this Agreement shall be
deemed to have commenced as of the Commencement Date and shall continue for a
period of thirty-six (36) calendar months thereafter. Commencing on February 1,
2010 and continuing on February 1st of each year thereafter (each an
"Anniversary Date"), the disinterested members of the Board of Directors of the
Company may extend the Agreement an additional year such that the remaining term
of the Agreement shall be thirty-six (36) months, unless Executive elects not to
extend the term of this Agreement by giving written notice in accordance with
Section 15 of this Agreement. The Board of Directors of the Company will review
the Agreement and Executive's performance annually for purposes of determining
whether to extend the Agreement and the rationale and results thereof shall be
included in the minutes of the Board's meeting. The Board of Directors of the
Company shall give written notice to Executive as soon as possible after such
review as to whether the Agreement is to be extended; provided, however, if the
Board fails to conduct such review or if written notice of nonrenewal is
provided to Executive, then in such case the term of this Agreement shall become
fixed and shall cease at the end of thirty-six (36) full calendar months
following the Anniversary Date.
8. Noncompetition and Confidentiality.
(a) Executive shall devote his full time and attention to the performance
of his employment under this Agreement. Upon any termination of Executive's
employment hereunder pursuant to Section 9(b) of this Agreement (other than a
termination which occurs after the effective date of a Change in Control),
Executive agrees not to compete with the Company or any subsidiary of the
Company for a period of one (1) year following such termination in any
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city, town or county in which Executive's normal business office is located or
in which the Company or any subsidiary of the Company has an office or 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 of Directors. Executive agrees that during
such period and within said 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 Company or any subsidiary of the Company. The parties
hereto, recognizing that irreparable injury will result to the Company or any
subsidiary of the Company, and their business and property in the event of
Executive's breach of this Section 8(a), agree that in the event of any such
breach by Executive, 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, employees and all
persons acting for or under the direction of Executive. Executive represents and
admits that in the event he terminates employment with the Company pursuant to
Section 9(b) of this Agreement, 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 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 Company from pursuing any other
remedies available to the Company for breach or threatened breach, including the
recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Company is a
valuable, special and unique asset of the business of the Company. 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 Company to
any person, firm, corporation, or other entity for any reason or purpose
whatsoever. 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
Company. Further, Executive may disclose information regarding the business
activities of the Company to the Office of Thrift Supervision ("OTS") or other
regulatory or judicial body pursuant to a formal regulatory request or subpoena.
(c) Nothing contained in this Section 8 shall be deemed to prevent or limit
the right of Executive to invest in any entity which conducts business similar
to that of the Company, solely as a passive or minority investor.
9. Termination.
Executive's employment under this Agreement shall be terminated upon any of
the following occurrences:
(a) Death. Executive's employment under this Agreement shall terminate upon
his death. Executive's estate shall be entitled to receive payments of base
salary, payable in accordance with the regular payroll practices of the Company,
for sixty (60) days immediately following the date of Executive's death and any
other compensation accrued as of the date of death.
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(b) Termination of Employment by the Board of Directors Without Just Cause
or by the Executive for Good Reason. In the event that (i) the Board of
Directors terminates Executive's employment without "Just Cause" (as defined in
Section 9(d)) or (ii) such employment is terminated by the Executive for "Good
Reason" (as defined in Section 9(b)(iii), Executive shall be entitled to:
(i) his base salary for the remaining term of the Agreement, including
any renewals or extensions thereof, at the current rate in effect
pursuant to Section 3 of this Agreement, plus the amount of the annual
cash bonus earned in the calendar year preceding the year of
termination, and a cash equivalent amount equal to the additional
retirement benefits under any retirement program (whether
tax-qualified or non-qualified) that Executive would have been
entitled to had his employment continued through the remaining term of
the Agreement (with the amount of benefits determined by reference to
the benefits received by the Executive or accrued on his behalf under
such programs during the twelve (12) months preceding his
termination).
(ii) coverage under the Company's life insurance plans and non-taxable
medical, health, and dental plans (each being a "Welfare Plan") in the
same manner in which Executive received coverage on the last day of
his employment with the Company. Executive and his covered dependents
(if any) shall continue participating in such Welfare Plans, subject
to the same premium contributions (if any) on the part of Executive as
were required immediately prior to his termination until the earlier
of (i) his death; (ii) his employment by another employer other than
one of which he is the majority owner; or (iii) three (3) years from
his termination date.
(iii) For purposes of this Agreement, termination of Executive's
employment hereunder for "Good Reason" shall be limited to Executive's
voluntary termination of employment after the occurrence of any of the
following events which have not been consented to in advance by
Executive in writing; provided that Executive has given written notice
to the Company within ninety (90) days after the initial occurrence of
such event and that the Company has been given at least thirty (30)
days to cure the situation (but the Company may waive its right to
cure): (i) if Executive would be required to move his personal
residence or perform his principal executive functions more than
twenty-five (25) miles from Executive's primary office as of the
Commencement Date; (ii) if, in the organizational structure of the
Company, Executive would be required to report to a person or persons
other than the Board of Directors; (iii) if the Company should fail to
maintain Executive's base compensation in effect pursuant to Section 3
of this Agreement, or fail to maintain the existing employee benefit
plans or arrangements in which Executive participates as of the date
of this Agreement, including any material fringe benefit, bonus plan
and/or retirement plan, except to the extent that such reduction in
compensation or benefit programs is part of an overall adjustment in
compensation and benefits for all employees of the Company and the
Executive is otherwise compensated for such an overall adjustment in
an equitable manner; (iv) if Executive would be assigned duties and
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responsibilities other than those normally associated with his
position as referenced in Section 1 of this Agreement; (v) if
Executive's responsibilities or authority have in any way been
materially diminished or reduced other than for reasons of Just Cause;
or (vi) if Executive is not re-elected to the Board of Directors or
appointed as Chairman of the Board other than for reasons of Just
Cause.
(iv) The sum due under Section 9(b)(i) shall be paid in one lump sum
within thirty (30) calendar days after such termination.
Notwithstanding the foregoing, in the event Executive is a Specified
Employee (within the meaning of Treasury Regulations ss.1.409A-1(i)),
then, to the extent necessary to avoid penalties under Code Section
409A, payment shall be withheld and shall be paid to Executive on the
first day of the seventh month following Executive's termination of
employment by the Company without Just Cause.
(v) For purposes of Section 9(b), termination of employment as used
herein shall mean "Separation from Service" as defined in Code Section
409A and the Treasury Regulations promulgated thereunder.
(c) Disability.
(i) Termination by the Company of Executive's employment based on
"Disability" shall occur if: (A) Executive 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 twelve (12) months;
(B) by reason of any medically determinable physical or mental
impairment that can be expected to result in death, or last for
continuous period of not less than twelve (12) months, Executive is
receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan covering employees
of the Company; or (C) Executive is determined to be totally disabled
by the Social Security Administration. Executive shall be entitled to
receive benefits under any short or long-term disability plan
maintained by the Company.
(ii) The Company shall pay Executive, as disability pay, a monthly
payment equal to three-quarters (3/4) of Executive's monthly rate of
base salary, plus any bonus paid to Executive for the preceding year.
These disability payments shall commence within thirty (30) days of
the date of Executive's termination due to Disability and will end on
the earlier of (A) the date Executive returns to the full-time
employment of the Company in the same capacity as he was employed
prior to his termination for Disability and pursuant to an employment
agreement between Executive and the Company; (B) the date the
Executive begins full-time employment with another employer; (C) the
date Executive attains the normal age of retirement (as defined in the
Company's defined benefit pension plan) or begins receiving benefits
under any substitute retirement plan adopted by the Company; or (D)
the date of Executive's death. Notwithstanding any other provision to
the contrary, the Company's obligation for any payments required to
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be made under this Section 9(c) shall be reduced by any proceeds
received by Executive from disability income insurance or any other
disability policy or plan maintained by the Company for Executive
which was paid for by the Company as partial satisfaction of its
obligation under this Section 9(c).
(iii) The Company shall cause to be continued life insurance and
non-taxable medical and dental coverage substantially identical to the
coverage maintained by the Company for Executive prior to his
termination for Disability. This coverage shall cease upon the earlier
of (A) the date Executive returns to the full-time employment of the
Company, in the same capacity as he was employed prior to his
termination for Disability and pursuant to an employment agreement
between Executive and the Company; (B) the date Executive begins
full-time employment with another employer; (C) the date Executive
attains the normal age of retirement or begins receiving benefits
under the Company's retirement plan; or (D) the date of Executive's
death.
(iv) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during
which Executive is incapable of performing his duties hereunder by
reason of temporary disability.
(d) Termination of Employment by the Board of Directors for Just Cause. In
the event Executive's employment is terminated for "Just Cause," no continued
payments or benefits shall be due under this Agreement. For purposes of this
Agreement, termination for "Just Cause" shall be defined as termination due to
Executive's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement Any determination of "Just Cause" as
defined by this Section 9(d) shall be determined by a majority vote of the
entire membership of the Board of Directors at a meeting of such Board called
and held for the purpose (after reasonable notice to Executive and an
opportunity for Executive to be heard before the Board with counsel), of finding
that in the good faith opinion of the Board, Executive committed the conduct
described above and specifying the particulars thereof.
(e) Voluntary Termination of Employment by Executive Other Than for Good
Reason. The voluntary termination of employment by Executive during the term of
this Agreement, other than for Good Reason, with the delivery of no less than
sixty (60) days written notice to the Board of Directors, entitles Executive to
receive only the base salary, vested rights, and all employee benefits up to
Executive's termination date.
(f) Termination and Board Membership. To the extent Executive is a member
of the board of directors of the Company or the Bank or any of their affiliates
on the date of an involuntary termination of employment with the Company or the
Bank or a termination of employment for Good Reason, Executive shall be deemed
to have automatically resigned from all of the boards of directors immediately
following such termination of employment with the Company or the Bank.
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(g) Termination and Release of Claims. Any payments to be made under this
Agreement shall be contingent on Executive's execution and non-revocation of a
mutual release in a form acceptable to the Company and the Bank; provided,
however, that if the Company or the Bank refuse to execute such mutual release,
the Executive's obligation to execute and not revoke the release as a
precondition to receiving such severance benefits shall terminate. The mutual
release agreement shall release the Company and the Bank from any and all claims
and other actions by Executive and it shall also release the Executive from any
and all claims and other actions by the Company and the Bank.
10. Change in Control.
(a) For purposes of this Agreement, a Change in Control of the Company or
the Bank shall be deemed to have occurred if and when:
(i) there occurs a change in control of the Company or the Bank within
the meaning of the Home Owners Loan Act of 1933 or 12 C.F.R. Part 574
as applied to the Company or the Bank as if it were a federally
chartered institution;
(ii) as a result of, or in connection with, any merger or other
business combination, sale of assets or contested election, wherein
the persons who were non-employee directors of the Company or the Bank
before such transaction or event cease to constitute a majority of the
Board of Directors of the Company or the Bank or any successor to the
Company or the Bank;
(iii) the Company or the Bank transfers substantially all of its
assets to another corporation or entity which is not an affiliate of
the Company or the Bank; or
(iv) the Company or the Bank is merged or consolidated with another
corporation or entity and, as a result of such merger or
consolidation, less than sixty percent (60%) of the equity interest in
the surviving or resulting corporation is owned by the former
shareholders or depositors of the Company or the Bank.
For purposes of Section 10 of this Agreement, a Change in Control shall
not occur as a result of the Conversion.
(b) If Executive's employment is terminated for any reason other than for
Just Cause within twelve months following a Change in Control, Executive shall
be entitled to receive the greater of the following:
(i) the amount of the payment and benefits specified in Section 9(b),
or
(ii) the amount of the payment and benefits specified in Section
10(c).
Such payment shall be made in a lump sum within thirty (30) days
following Executive's termination of employment. For purposes of this
Section 10, termination of employment as used herein shall mean "Separation
from Service" as defined in Code Section 409A and the Treasury Regulations
promulgated thereunder. Notwithstanding the foregoing, in the event
Executive is a Specified Employee (within the meaning of
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Treasury Regulations ss.1.409A-1(i)), then, to the extent necessary to
avoid penalties under Code Section 409A, payment shall be withheld and
shall be paid to Executive on the first day of the seventh month following
Executive's termination of employment.
(c) For purposes of Section 10(b)(ii), the amount of payment and benefits
shall be equal to:
(i) an amount equal to three (3) times his "base amount," as defined
in Code Section 280G(b)(3), less one (1) dollar; and
(ii) coverage under the Company's or Bank's life insurance plan and
non-taxable medical, health and dental plans (each being a "Welfare
Plan") in the same manner in which Executive received coverage on the
last day of his employment with the Company. Executive and his covered
dependents (if any) shall continue participating in such Welfare
Plans, subject to the same premium contributions (if any) on the part
of Executive as were required immediately prior to his termination
until the earlier of (i) his death; (ii) his employment by another
employer other than one of which he is the majority owner; or (iii)
three (3) years from his termination date.
11. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Company which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets of the Company.
(b) Since the Company is contracting for the unique and personal skills of
Executive, Executive shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Company.
12. Amendments. No amendments or additions to this Agreement shall be binding
upon the parties hereto unless made in writing and signed by both parties,
except as herein otherwise specifically provided.
13. Applicable Law. This agreement shall be governed in all respects, whether as
to validity, construction, capacity, performance or otherwise, by the laws of
the State of Hawaii, except to the extent that Federal law shall be deemed to
apply.
14. Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
15. Notices. Any notices, requests, demands and other communications provided
for or deemed necessary by this Agreement shall be sufficient if set forth in
writing and delivered in person or sent by registered or certified mail, postage
prepaid, to, in the case of Executive, the last address filed in writing by
Executive with the Company, or, in the case of the Company, to the Company at
its main office to the attention of the Board of Directors.
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16. Indemnification. 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, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent permitted under law and applicable regulation or under any existing
indemnification agreement by and between Executive and the Company 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 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 may include, but are not limited
to, judgment, court costs and attorneys' fees and the cost of reasonable
settlements. The Company shall pay such expenses and liabilities in advance of a
final judicial decision (hereinafter an "advancement of expenses"); provided,
however, that, an advancement of expenses incurred by Executive in his capacity
as a director or executive officer of the Company (and not in any other capacity
in which service was or is rendered by Executive including, without limitation,
services to an employee benefit plan) shall be made only upon delivery to the
Company of an undertaking, by or on behalf of Executive, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that Executive is not entitled to be
indemnified for such expenses under this Section 16 or otherwise.
Indemnification under this Section 16 shall be made in accordance with 12 C.F.R.
ss.545.121 or any successor thereto.
17. Entire Agreement. This Agreement together with any understanding or
modifications thereof as may be agreed to in writing by the parties, shall
constitute the entire agreement between the parties hereto.
18. Source of Payments. Notwithstanding any provision in this Agreement to the
contrary, to the extent payments and benefits, as provided for under this
Agreement, are paid or received by Executive under the employment agreement in
effect between Executive and the Bank, the payments and benefits paid by the
Bank will be subtracted from any amount or benefit due simultaneously to
Executive under similar provisions of this Agreement. Payments will be allocated
in proportion to the level of activity and the time expended by Executive on
activities related to the Company and the Bank, respectively, as determined by
the Company and the Bank.
19. Required Regulatory Provisions.
(a) The Company may terminate Executive's employment at any time, but any
termination by the Company, other than Termination for Just Cause, shall not
prejudice Executive's right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Just Cause as defined in Section
9(d) hereinabove.
(b) Notwithstanding any other provision of this Agreement to the contrary,
any payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with Section 12 U.S.C. Section
1828(k), FDIC regulation 12 C.F.R. Part 359, Golden Parachute and
Indemnification Payments.
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20. Arbitration.
(a) Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Executive within fifty
(50) miles from the location of the Company, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the date of termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
(b) In the event any dispute or controversy arising under or in connection
with Executive's termination is resolved in favor of Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back-pay, including salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.
21. Payment of Costs and Legal Fees. All reasonable costs and 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 Company, if
Executive is successful with respect to such dispute or question of
interpretation pursuant to a legal judgment, arbitration or settlement. Such
reimbursements shall be paid to Executive within two and one-half (2 1/2) months
after the dispute is settled or resolved in Executive's favor.
IN WITNESS WHEREOF, the parties have executed this Agreement on the latest
date set forth below.
TERRITORIAL BANCORP INC.
November 13, 2009 By: /s/ Harold H. Ohama
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Date Chairman of the Compensation Committee
November 13, 2009 /s/ Allan S. Kitagawa
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Date Allan S. Kitagawa