Document:

ex10-2.htm

Exhibit 10.2

 

UNITED STATES OF AMERICA

Before the

OFFICE OF THRIFT SUPERVISION

	  	
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In the Matter of

	
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Order No.: NE-11- 15

	  	
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BFS BANCORP, MHC

	
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Brooklyn, New York

	
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Effective Date: March 31, 2011

	
OTS Docket No. H4158

	
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and

	
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BROOKLYN FEDERAL BANCORP, INC.

	
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Brooklyn, New York

	
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OTS Docket No. H4159

	
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ORDER TO CEASE AND DESIST

 

WHEREAS, BFS BANCORP, MHC, Brooklyn, New York, OTS Docket No. H4158 (BFS-MHC), and BROOKLYN FEDERAL BANCORP, INC., Brooklyn, New York, OTS Docket No. H4159 (BFB-HC), (collectively, the Holding Companies), by and through their respective Boards of Directors (Board or Boards), have executed a Stipulation and Consent to the Issuance of an Order to Cease and Desist (Stipulation); and

 

WHEREAS, the Holding Companies, by executing the Stipulation, have consented and agreed to the issuance of this Order to Cease and Desist (Order) by the Office of Thrift Supervision (OTS) pursuant to 12 U.S.C. § 1818(b); and

 

 

 

BFS Bancorp, MHC

Brooklyn Federal Bancorp, Inc.

Order to Cease and Desist

Page  1 of 6

  

  

  

 

WHEREAS, pursuant to delegated authority, the OTS Regional Director for the Northeast Region (Regional Director) is authorized to issue Orders to Cease and Desist where a savings and loan holding company has consented to the issuance of an order.

 

NOW, THEREFORE, IT IS ORDERED that:

 

Cease and Desist.

 

1.           The Holding Companies and their directors, officers, employees, and agents shall cease and desist from any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or the aiding and abetting of unsafe or unsound practices that have resulted in an inadequate level of capital protection at Brooklyn Federal Savings Bank, Brooklyn, New York, OTS Docket No. 03198 (Association), for the volume, type, and quality of assets held by the Association, and inadequate earnings at the Association to augment capital.

 

Association Oversight.

 

2.           Effective immediately, the Holding Companies shall ensure the Association's compliance with the terms of the Order to Cease and Desist issued by the OTS against the Association, Order No.: NE-11-14, effective date March 31, 2011 (2011 Association Order).

 

Capital Maintenance and Augmentation Plan.  

 

3.           By April 30, 2011, the Holding Companies shall submit for Regional Director review and non-objection a written plan to maintain and enhance the capital of the Holding Companies and the Association and to ensure that the Association complies with the capital requirements imposed by the 2011 Association Order (Capital Maintenance and Augmentation Plan).  The Capital Maintenance and Augmentation Plan shall:

 

(a)    address the requirements and restrictions imposed by this Order;

 

 

BFS Bancorp, MHC

Brooklyn Federal Bancorp, Inc.

Order to Cease and Desist

Page 2 of 6

 

  

  

  

(b)   identify the specific sources of additional capital and the time frames and methods by which additional capital will be raised and infused into the Association, including specific target dates and capital levels;

 

(c)           establish an alternative strategy including, but not limited to, seeking a merger or acquisition partner for the Holding Companies and/or the Association, to be implemented immediately if the Holding Companies’ primary strategy to raise and infuse additional capital is unsuccessful; and

 

(d)           require the Boards to review, on a monthly basis, the Holding Companies’ compliance with the Capital Maintenance and Augmentation Plan and the Association’s compliance with the Capital Maintenance and Augmentation Plan.

 

4.           Within ten (10) days after receipt of written non-objection from the Regional Director, the Holding Companies shall implement and adhere to the Capital Maintenance and Augmentation Plan.  Each Board’s review of the Capital Maintenance and Augmentation Plan shall be documented in the respective Board’s meeting minutes.

 

Capital Distributions and Stock Repurchases.

 

5.           Effective immediately, the Holding Companies shall not declare, make, or pay any dividends or other capital distributions1, or repurchase or redeem any capital stock without receiving the prior written non-objection of the Regional Director.  The Holding Companies shall submit a written request for such non-objection to the Regional Director at least thirty (30) days prior to the anticipated date of the proposed dividend payment, capital distribution, or stock redemption.

 

_______________________

1 The term “capital distribution” is defined in 12 C.F.R. § 563.141.

 

BFS Bancorp, MHC

Brooklyn Federal Bancorp, Inc.

Order to Cease and Desist

Page 3 of 6

 

  

  

  

6.           Effective immediately, the Holding Companies shall not take, directly or indirectly, dividends or any other form of payment representing a reduction in the Association's capital from the Association without receiving the prior written non-objection of the Regional Director.  The Holding Companies’ written request for such non-objection shall be submitted to the Regional Director at least thirty (30) days prior to the anticipated date of the proposed dividend payment or capital distribution.

 

Directorate and Management Changes.

 

7.           Effective immediately, the Holding Companies shall comply with the prior notification requirements for changes in directors and Senior Executive Officers2 as set forth in 12 C.F.R. Part 563, Subpart H.

 

Employment Contracts/Compensation Arrangements.

 

8.           Effective immediately, the Holding Companies shall not enter into, renew, extend, or revise any contractual arrangement relating to compensation or benefits for any Senior Executive Officer or Director of the Holding Companies, unless they first provide the Regional Director with not less than thirty (30) days prior written notice of the proposed transaction.  The notice to the Regional Director shall include a copy of the proposed employment contract or compensation arrangement, or a detailed written description of the compensation arrangement to be offered such Officer or Director, including all benefits and perquisites.  The Board shall ensure that any contract, agreement, or arrangement submitted to the Regional Director fully complies with the requirements of 12 C.F.R. Part 359.

 

__________________________

2 The term "Senior Executive Officer" is defined at 12 C.F.R. § 563.555.

 

BFS Bancorp, MHC

Brooklyn Federal Bancorp, Inc.

Order to Cease and Desist

Page 4 of 6

 

  

  

  

Golden Parachute Payments.

 

9.           Effective immediately, the Holding Companies shall not make any golden parachute payment3 unless, with respect to each such payment, the Holding Companies have complied with the requirements of 12 C.F.R. Part 359.

 

Effective Date, Incorporation of Stipulation.

 

 

10.           This Order is effective on the Effective Date as shown on the first page.  The Stipulation is made a part hereof and is incorporated herein by this reference.

 

Duration.

 

11.           This Order shall remain in effect until terminated, modified, or suspended by written notice of such action by the OTS, acting by and through its authorized representatives.

 

 

Time Calculations.

 

12.           Calculation of time limitations for compliance with the terms of this Order run from the Effective Date and shall be based on calendar days, unless otherwise noted.

 

13.           The Regional Director, or an OTS authorized representative, may extend any of the deadlines set forth in the provisions of this Order upon written request by the Holding Companies that includes reasons in support for any such extension.  Any OTS extension shall be made in writing.

 

Submissions and Notices.

 

14.           All submissions, including any reports, to the OTS that are required by or contemplated by this Order shall be submitted within the specified timeframes.

 

__________________________

3 The term "golden parachute payment" is defined at 12 C.F.R. § 359.1(f).

 

BFS Bancorp, MHC

Brooklyn Federal Bancorp, Inc.

Order to Cease and Desist

Page 5 of 6

 

  

  

  

15.           Except as otherwise provided herein, all submissions, requests, communications, consents, or other documents relating to this Order shall be in writing and sent by first class U.S. mail (or by reputable overnight carrier, electronic facsimile transmission, or hand delivery by messenger) addressed as follows:

 

(a)          To the OTS:

Office of Thrift Supervision

Michael E. Finn

Regional Director, Northeast Region

Harborside Financial Center Plaza Five

Suite 1600

Jersey City, NJ 07302

Fax: (201) 413-7543

 

(b)          To the BFS-MHC:

Attn: Richard A. Kielty, President and Chief Executive Officer

BFS Bancorp, MHC

81 Court Street

Brooklyn, New York 11201

 

 (c)         To the BFB-HC:

Attn: Richard A. Kielty, President and Chief Executive Officer

Brooklyn Federal Bancorp, Inc.

81 Court Street

Brooklyn, New York 11201 

 

No Violations Authorized.

 

16.           Nothing in this Order or the Stipulation shall be construed as allowing the Holding Companies, their respective Boards, officers, or employees to violate any law, rule, or regulation.

 

IT IS SO ORDERED.

	  	
OFFICE OF THRIFT SUPERVISION

 

 

	  	
By: /s/ Michael E. Finn                                                

	  	
Michael E. Finn

	  	
Regional Director, Northeast Region

	  	   
	  	
Date: See Effective Date on page 1

 

BFS Bancorp, MHC

Brooklyn Federal Bancorp, Inc.

Order to Cease and Desist

Page 6 of 6ex10-1.htm

Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (the “Agreement”) is entered into this 1st day of April, 2011, by and between EDMUND C. REITER (“REITER”) and AWARE, INC. (“AWARE”).

WHEREAS, effective April 1, 2011, REITER’s employment with AWARE is terminated, and

NOW THEREFORE, in consideration of the mutual promises and covenants herein set forth, which consideration is acknowledged by the parties to be good and sufficient, the parties hereto covenant and agree as follows:

1.  Within one business day after the end of the Waiting Period (as defined below), AWARE shall pay to REITER a lump sum of One Hundred Ninety Two Thousand Five Hundred Dollars ($192,500), subject to appropriate tax withholdings and other appropriate deductions.

2.  Within one business day after the end of the Waiting Period, AWARE shall grant REITER 105,000 shares of unrestricted common stock of AWARE, subject to the terms of the Unrestricted Stock Award Agreement to be entered into between AWARE and REITER (the “Unrestricted Stock Award Agreement”).

 

3.  REITER agrees to forfeit to AWARE all AWARE stock options, whether vested or unvested, held or owned by REITER, including, without limitation, AWARE stock option awards granted to REITER on October 14, 2003, September 8, 2004, February 9, 2005 and May 23, 2008.  Upon execution of this Agreement, all such stock options shall be null and void.  REITER acknowledges that the unrestricted stock award of Aware he was granted on July 26, 2010 and which contemplates the possibility of the issuance to him of an additional 107,143 shares of common stock of AWARE, shall be null and void from and after termination of his employment with Aware.   REITER acknowledges that the Stock Appreciation Rights (“SARs”) that were granted to him on May 20, 2009  which provided him with 24,000 SARs will be paid in accordance with the terms of the Stock Appreciation Rights Award between REITER and AWARE.

 

4.   Beginning April 2, 2011, REITER and REITER’s eligible dependents will be eligible at REITER’s expense to continue healthcare coverage through the provisions set forth in the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended by the Omnibus Budget Reconciliation Act of 1989 (“COBRA”).

 

5.  REITER acknowledges and agrees that the consideration provided herein constitutes good and sufficient consideration for this Agreement.

 

6. In consideration of the undertakings, transactions and consideration recited in this Agreement, which REITER agrees he would not otherwise be entitled to, REITER, on behalf of himself, his heirs, agents, representatives, attorneys, assigns, executors, beneficiaries, and administrators, hereby releases and forever discharges AWARE and each and all of its parents, divisions, subsidiaries, affiliates, predecessors, successors and assigns, as well as the past, present and future officers, directors, shareholders, attorneys, employees and agents of each, hereinafter referred to as the “Releasees”, from any and all causes of action, claims for damages, debts, demands, suits, accounts, covenants, contracts, agreements, judgments, executions, orders, bonuses, back pay, commissions and any and all claims, demands and liabilities whatsoever of any kind, whether in law or in equity, arising or which may have existed, from the beginning of the world to this date, whether now known or unknown, suspected or unsuspected including, but not limited to, any and all matters related in any way to REITER’s employment with or separation from AWARE, any claims for severance, compensation, commissions, wages or bonuses, as well as all claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990, American with Disabilities Act, Massachusetts General Laws c. 151B, the Employee Retirement Income Security Act of 1974, any federal or state anti-discrimination laws, and any other statutory, common law or other claims of any nature whatsoever against any of the Releasees, but expressly excepting all rights and obligations of the parties arising out of or relating to this Agreement.

This means that by signing this Agreement, REITER will have waived any right he had to bring a lawsuit or make any legal claim against AWARE or any of the Releasees based on any actions taken by any of the Releasees up to the date of the signing of this Agreement, and that REITER will have released the Releasees of any and all claims of any nature arising up to the date of the signing of this Agreement.

  

  

  

7.  REITER agrees that he shall not disparage AWARE or its directors, officers, employees or agents in a personal manner, a professional manner or otherwise.

8.  This Agreement shall not be construed as an admission of any sort by AWARE, nor shall it be used as evidence in a proceeding of any kind except one in which a party alleges a breach of the terms of this Agreement or one in which a party elects to use this Agreement as a defense to any claim.

9.  Should any part, term, or provision of this Agreement be determined by any tribunal, court, or arbitrator to be illegal, invalid, or unenforceable, the validity of the remaining parts, terms, or provisions shall not be affected thereby, and the illegal, invalid, or unenforceable part, term, or provision shall be deemed not to be a part of this Agreement.

10.  The parties agree that a failure by any party at any time to require performance of any provision of this Agreement shall not waive, affect, diminish, obviate or void in any way that party’s full right or ability to require performance of the same, or any other provisions of this Agreement, at any time thereafter.

11.  Other than as stated herein, the undersigned parties warrant that no promise or inducement has been offered for this Agreement and that they are competent to execute this Agreement and accept full responsibility for it.

12.  REITER agrees to immediately return all property of AWARE, including, but not limited to all computer equipment, software and books. REITER agrees to turn in all time sheets through the latest pay period.

13.  REITER acknowledges and agrees to comply with his continuing obligations as set forth in the Employee Agreement signed by REITER.  This Agreement, along with the Unrestricted Stock Award Agreement, the Employee Agreement entered into between the parties, and a Consulting Agreement to be entered into between AWARE and REITER as of April 1, 2011, as well as all agreements incorporated by reference in any of the aforementioned agreements, set forth the entire agreement between the parties hereto, and fully supersede any and all prior agreements or understandings between the parties.  This Agreement may be modified only by a writing signed by all parties hereto.

14.  REITER acknowledges that he has been advised to seek the advice and counsel of an attorney prior to executing this Agreement (although REITER may chose not to engage counsel).  REITER further acknowledges that he has the opportunity to consider this Agreement, and in particular the release of claims, including claims under the Age Discrimination in Employment Act, for twenty-one  (21) days (although REITER may waive said requirement by signing this Agreement), and that this Agreement is revocable for seven (7) days following its execution and shall not become effective or enforceable until the eighth day following execution of the same (such seven-day period is referred to herein as the “Waiting Period”).

WHEREFORE, REITER acknowledges that he is entering into this Agreement knowingly and voluntarily and as a waiver of all legal claims against AWARE or any of the Releasees.  REITER and AWARE have read this Agreement, carefully considered its provisions, and attest that they fully understand and knowingly accept its terms in their entirety and without reservation.

AWARE, INC.

By:

/s/ Richard P. Moberg

Date: April 1, 2011

 

	 	
EDMUND C. REITER

	
Witness

	 	  	  
	 	
/s/ Edmund C. Reiter

	
/s/ Kevin T. Russell

	 	  	  
	 	
Date: April 1, 2011

	
Date: April 1, 2011

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