Document:

EXHIBIT 10.6

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement” or “Amended
Agreement”) is made as of this 11th day of June, 2010 by and among THE
WASHINGTON SAVINGS BANK, a federally chartered stock savings bank (the “Bank”
or the “Employer”) and PHILLIP C. BOWMAN,
an individual residing in Arnold, Maryland (the “Executive”).

 

WHEREAS,
effective March 21, 2005 the parties hereto entered into an Employment
Agreement (the “Prior Agreement”); and

 

WHEREAS,
the parties hereto desire to amend and restate the Prior Agreement as provided
herein.  NOW, THEREFORE, in consideration
of the foregoing and the mutual promises, covenants and agreements set forth in
this Amended Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:

 

1.                                      Employment.

 

(a)                                  Term.  The initial term of employment under this
Amended Agreement shall be for the period commencing on the date hereof and
ending on April 30, 2011 (the “Initial Term”).   Subject to annual review and approval by the
Board of Directors of the Employer, this Amended Agreement may be extended by
written notice from the Employer to the Executive for an additional consecutive
12-month period (the “Extended Term”) with such written notice being given no
later than March 31, 2011 and every subsequent March 31st thereafter. Failure of Employer to give such
written notice shall result in a termination of this Agreement effective on the
following April 30th of any year this Agreement is in effect.   The Initial Term and all such Extended Terms
are collectively referred to herein as the “Employment Term.”

 

(b)                                 Duties.  The Executive is employed as chief executive
officer during the Employment Term.   As
chief executive officer, the Executive shall render executive, policy and other
management services to the Employer consistent with the Executive’s position
and experience and of the type customarily performed by persons serving in a
similar capacity, and shall be responsible for all aspects of the management
and operations of the Employer (including without limitation development and
implementation of a revised business plan, supervision of the Employer’s
lending function, and development of an executive management team consistent
with the Employer’s business plan and the policies and direction of the Board
of Directors) and shall report to the Employer’s Board of Directors or such
committee thereof as shall be designated by the Board of Directors.   During the Employment Term, there shall be
no material decrease in the duties and responsibilities of the Executive
otherwise than as provided herein, unless the parties otherwise agree in
writing.  During the Employment Term, the
Executive shall not be required to relocate, without his consent, his place of
employment to a location more than 50 miles away from the Employer’s Bowie,
Maryland headquarters location to perform his duties hereunder, except for
reasonably required travel by the Executive on the business of the
Employer.  The Executive is encouraged to
affiliate with professional associations, business and 

 

 

civic
organizations in support of his role as chief executive officer, provided that
Executive’s involvement in such activities does not adversely affect the
performance of his duties on behalf of the Employer.

 

2.                                      Compensation
and Benefits.

 

(a)                                  Base Salary.  The Executive shall initially be paid a base
salary at an annualized rate of $282,000 (as may be adjusted from time to time
in accordance with this Amended Agreement, “Base Salary”), payable in
accordance with the Employer’s regular payroll practices for its executive
employees.  On an annual basis, prior to November 30
of each year during the Employment Term, the Executive’s Base Salary shall be
reviewed by the independent members of the Board of Directors (or a committee
comprised exclusively of independent members, as set forth in the listing
standards of the NASDAQ Stock Market LLC) and may be increased in the
discretion of the Board of Directors of the Employer or such committee.  In reviewing the Executive’s Base Salary, the
Chief Executive Officer and Board of Directors of the Employer shall consider
the Executive’s performance, scope of responsibility, and such other matters as
they deem appropriate.  The Base Salary
of the Executive shall not be decreased at any time during the Employment Term
from the amount then in effect, unless the Executive otherwise agrees in
writing.

 

(b)                                 Bonuses and
Incentive Compensation.  The
Executive shall be eligible to receive an annual bonus as may be determined by
the independent members of the Board of Directors (or a committee comprised
exclusively of independent members) in their discretion.  No other compensation provided for in this
Amended Agreement shall be deemed a substitute for the Executive’s right to
participate in such bonus when and as declared by the Board of Directors of the
Employer.  This provision shall not
preclude the grant of any other bonus or incentive compensation to the
Executive as determined by the Board of Directors of the Employer.  The Employer must pay any declared bonus to
the Executive no later than the 15th day of the
third month after the close of the year for which the Employer awarded the
bonus and for which the Executive has a vested right.

 

(c)                                  Employee Stock
Options.  Any grant of employee stock
options after the date hereof shall be subject to the discretion of the
independent members of the Board of Directors.

 

(d)                             Benefit Plans.  The Executive shall be eligible to
participate in any employee pension benefit plans (as that term is defined
under Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended), group life insurance plans, medical plans, dental plans,
long-term disability plans, business travel insurance programs and other fringe
benefit plans or programs maintained by the Employer for the benefit of its
executive employees.  The Executive’s
participation in any such benefit plans and programs shall be based on, and
subject to satisfaction of, the eligibility requirements and other conditions
of such plans and programs.  If the
Executive’s employment by the Employer shall cease for any reason other than by
voluntary termination (as described in Section 3(b) below) or for “Cause”
(defined in Section 3(e) below), the Executive shall receive
continued group life, health, dental, accident and long term disability
insurance coverage for the remaining Employment Term, equivalent to the coverage
to which he would have been entitled under such plans (as in effect on the date
of his 

 

2

 

termination
of employment, or, if his termination of employment occurs after a “Change of
Control” (defined in Section 4(b) below), on the date of such Change
of Control, whichever benefits are greater, if he had continued working for the
Employer during the remaining Employment Term at the highest rate of salary
achieved during the Employment Term, but taking into account any coverage
provided from any subsequent employer.

 

(e)                                  Expenses.  Subject to the policies of the Employer and
oversight by the Board of Directors, the Executive is authorized to incur
reasonable expenses in the performance of his duties hereunder, including the
costs of business entertainment, travel, and attendance at conventions and
meetings.  The Employer (subject to
oversight by the Board of Directors) shall reimburse the Executive for all such
expenses promptly upon periodic presentation by the Executive of an itemized
account of such expenses.

 

(f)                                    Other Benefits.  During the period of employment, the
Executive shall also be entitled to receive the following benefits:

 

(i)                                     Paid vacation
of at least four weeks during each calendar year (prorated for partial years)
(with no carry over of unused vacation to a subsequent year) and any holidays
that may be provided to substantially all employees of the Employer in
accordance with the Employer’s holiday policy;

 

(ii)                                  Reasonable sick
leave consistent with the Employer’s policy in that regard for other executive
officers;

 

(iii)                               Reimbursement
of monthly dues and related fees (but not personal expenses) for one country
club membership as may be beneficial to the Executive’s roles with the
Employer.  The choice of club shall be
subject to prior review and approval by the Board of Directors, and shall be
subject to subsequent review and disapproval by the Board of Directors; and

 

(iv)                              A company
automobile for business use.  In lieu
thereof, at the Employer’s option, the Executive may receive the lease of an
automobile for business use for up to $500 monthly and reasonable associated
repair and maintenance costs.

 

3.                                      Termination.

 

Prior
to a Change of Control, the Executive’s employment by the Employer shall be
subject to termination as follows:

 

(a)                              Expiration of
the Employment Term.  The
Executive’s employment with the Employer shall not terminate prior to the
expiration of the established term, except as provided below in Section 3.

 

(b)                                 Voluntary
Termination.  The
Executive may terminate this Amended Agreement upon not less than 30 days prior
written notice delivered to the Employer, in which event the Executive shall be
entitled only to the compensation and benefits the Executive has earned or
accrued through the effective date of the voluntary termination.

 

3

 

(c)                                  Termination
Upon Death.  This
Amended Agreement shall terminate upon the Executive’s death.  In the event this Amended Agreement is
terminated as a result of the Executive’s death, the Employer shall continue
payments of the Executive’s Base Salary which should have otherwise been due
for a period of 30 days following the Executive’s death to the Executive’s
estate.

 

(d)                                 Termination
Upon Disability.  The
Employer may terminate this Amended Agreement upon the Executive’s
disability.  For purposes of this Amended
Agreement, the Executive’s inability to perform the Executive’s duties
hereunder by reason of physical or mental illness or injury for a period of 26
consecutive weeks that follows the Executive’s use of all available sick leave
(the “Disability Period”) shall constitute disability.  The determination of disability shall be made
by a physician selected by the Employer. 
During the Disability Period, the Executive shall be entitled to 100% of
the Executive’s Base Salary otherwise payable during that period, reduced by
any other Employer provided benefits to which the Executive may be entitled
with respect to the Disability Period which benefits are specifically payable
solely on account of such disability (including, but not limited to, benefits
provided under any disability insurance policy or program, worker’s
compensation law, or any other benefit program or arrangement then in effect,
it being acknowledged that the Employer does not currently maintain any group
disability coverage).

 

(e)                                  Termination for
Cause.  Subject to the provisions of Section 3(k) of
this Amended Agreement, the Employer may terminate Executive’s employment for
Cause.  For the purposes of this Amended
Agreement, the Employer shall have “Cause” to terminate Executive’s employment
under this Amended Agreement upon:  (i) 
the failure by Executive to perform his duties under this Amended Agreement
(other than any such failure resulting from Executive’s incapacity due to
physical or mental illness), after a written demand for performance is
delivered to Executive by the Board, which demand specifically identifies the
manner in which the Board believes that Executive has not performed his duties;
(ii) the engaging by Executive in acts of dishonesty, incompetence, fraud,
gross negligence, breach of fiduciary duty involving personal profit, willful
misconduct or other gross misconduct injurious to the Employer;  (iii)  the violation by Executive of any
law, rule or regulation (other than traffic violations or similar
offenses) or formal or informal enforcement action of any governmental
regulatory agency applicable to the Employer or its personnel and injurious to
the Bank; or (iv) the breach of this Amended Agreement by Executive.

 

Notwithstanding
the foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of a majority of the entire membership of
the Board at a meeting of the Board called and held for the purpose (after
reasonable written notice to Executive and an opportunity for Executive,
together with his counsel, to be heard before the Board at such meeting),
finding that in the good faith opinion of the Board, Executive was guilty of
conduct set forth above in any of clauses (i), (ii), (iii) or (iv) of
this Section 3(e) and describing such conduct.

 

(f)                                    Termination
Without Cause.  The
Employer may terminate the Executive’s employment for reasons other than Cause
upon not less than 60 days prior written notice delivered to the Executive, in
which event the Employer shall pay to the Executive an amount equal to the Base
Salary for the remaining Term plus eight months Base Salary, which 

 

4

 

amounts
shall be paid in consecutive monthly installments following the date the
Executive’s employment is terminated.  If
the Executive terminates his employment with the Employer during the Employment
Term for “Good Reason” (defined in Section 4(c) below), other than
following a Change of Control, such termination shall be deemed to have been a
termination by the Employer of the Executive’s employment without Cause.

 

(g)                                 Change of
Control.  If the Executive’s employment
by the Employer shall cease for any reason other than Cause within 12 months
following a Change of Control that occurs during the Employment Term, the
provisions of paragraph 4 below shall apply.

 

(h)                                 Termination as
the Result of Non-Renewal.  If
the Employer does not extend the Employment Term under Section 1(a) then,
upon the expiration of the Employment Term, the Employer shall pay to the
Executive an amount equal to eight months Base Salary, which amount shall be
paid in eight consecutive monthly installments commencing on the month
following the month the Employment Term expires with the understanding that
there will be no interruption in normal salary payments received by
Employee.  However, at Employer’s option,
Employer may release Executive from the provisions of Section 5(b) by
providing written notice of such release to Executive, upon which Executive
shall be deemed to have waived and released any right to severance under this Section 3(h).

 

(i)                                     Resignation.  Effective upon the Executive’s termination of
employment for any reason, the Executive hereby resigns from any and all
offices and positions including but not limited to directorship, related to the
Executive’s employment with the Employer and any subsidiaries or affiliates
thereof, and held by the Executive at the time of termination.

 

(j)                                     Regulatory
Limits.  Notwithstanding any other
provision in this Amended Agreement, (i) the Employer may terminate or
suspend this Amended Agreement and the employment of the Executive hereunder,
as if such termination were for Cause under Section 3(e) hereof, to
the extent required by the applicable Federal or state related to banking,
deposit insurance or bank or savings institution holding companies or by
regulations or orders issued by the Office of Thrift Supervision, the Federal
Deposit Insurance Corporation or any other state or federal banking regulatory
agency having jurisdiction over the Employer and (ii) no payment shall be
required to be made to or for the benefit of the Executive under this Amended
Agreement to the extent such payment is prohibited by applicable law,
regulation or order issued by a banking agency or a court of competent
jurisdiction; provided, that it shall be the Employer’s burden to prove that
any such action was so required.

 

(k)                                  Notice of
Termination.  Any
termination by the Employer or by Executive pursuant to the terms and
provisions of this Amended Agreement shall be communicated by written Notice of
Termination, as defined in this Amended Agreement, to the other party to this
Amended Agreement.  For purposes of this
Amended Agreement, a “Notice of Termination” shall mean a written notice, given
in accordance with the provisions of Section 15 of this Amended Agreement,
which shall indicate the specific termination provision in this Amended
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.

 

5

 

(l)                                     Offset.  If Executive’s employment shall cease for any
reason, including pursuant to non-renewal of this Amended Agreement, and
Executive secures other employment with an entity that competes with Employer
for loans and/or deposits during the period that the Executive is entitled to
any payments pursuant to this Amended Agreement, such payments shall be reduced
by the amount of any compensation or other payments received as a result of
such other employment.  For purposes of
this section “other employment” includes employment on an at-will basis or
services provided as an independent contractor.

 

4.                                      Termination
Following a Change of Control.

 

(a)                                  (i)                                     In the event
the Employee is employed and Employer terminates the Executive’s employment, or
the Executive terminates employment with Good Reason, in either case within 12
months after a Change of Control, the Employer shall, within 60 days of
termination, pay to the Executive a lump sum cash payment equal to 1.5 times
the average annual compensation paid to the Executive by Employer and included
in the Executive’s gross income for income tax purposes during the five full
calendar years, or shorter period of employment, that immediately precede the
year during which the Change of Control occurs, subject to the limitation in
subparagraph (a)(ii) below.

 

(ii)                                  The Employer
must withhold from the payment described in subparagraph (a)(i) the
difference between the lump sum described in subparagraph (a)(i) and two
times the compensation limit described in Section 401(a)(17) of the
Internal Revenue Code, (the “Code”) as adjusted for inflation.  The difference withheld must be paid in a
lump sum on the first business day of the seventh calendar month after the
Executive’s Severance From Employment.

 

(b)                                 For purposes of
this Amended Agreement, a “Change of Control” shall mean:

 

(1)                                  The acquisition
by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d) (2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (i) the then
outstanding shares of common stock of the Employer or WSB Holdings, Inc.,
the parent of the Bank (the “Company”) (the “Outstanding Common Stock”), or (ii) the
combined voting power of the then outstanding voting securities of the Employer
or the Company entitled to vote generally in the election of directors (the “Outstanding
Voting Securities”); provided, however, that for purposes of this subsection
(1), the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Employer or the Company, (ii) any
acquisition by the Employer or the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Employer, the Company or any other corporation controlled by, or controlling,
the Employer or the Company, or (iv) any acquisition by any corporation
pursuant to a transaction that complies with clauses (i), (ii) and (iii) of
subsection (3) of this Section 4(c); or

 

(2)                                  The date any
one person, or more than one person acting as a group, acquires, or has
acquired during the 12-month period ending on the day the most recent
acquisition by such person or persons, ownership of stock of the Employer or
the Company 

 

6

 

possessing
30% or more of the total voting power of the stock of the Employer or the
Company; or

 

(3)                                  Individuals
who, as of the date hereof, constitute the Board of Directors (the “Incumbent
Board”) of either the Employer or the Company cease for any reason to
constitute at least a majority of such Board of Directors during a 12-month
period; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board of the Employer or the Company, as the case
may be, shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors of the Employer or the Company; or

 

(4)                                  Consummation of
a reorganization, merger or consolidation or sale or other disposition during a
12-month period of all or substantially all (i.e. 40% of the total gross fair
market value) of the assets of the Employer or the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities of the Employer or the Company, as the case may be, immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Employer or the Company or all or substantially all of the Employer’s or the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Common Stock and Outstanding
Voting Securities of the Employer or the Company, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Employer or the Company,
the Employer or the Company, as the case may be, such corporation resulting
from such Business Combination or a corporation controlled by any of them)
beneficially owns, directly or indirectly, 25% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or

 

(5)                                  Approval by the
shareholders of the Employer or the Company, as the case may be, of a complete
liquidation or dissolution of the Employer or the Company without the
establishment of a successor corporation. 
Notwithstanding the foregoing, liquidation or dissolution is not a
Change of Control Event for Code Section 409A purposes unless the Company
complies with Section 4(f) herein.

 

7

 

(c)                                  “Good Reason”
shall mean:

 

(i)                                     without
Executive’s written consent, a material change in the nature or scope of the
authorities, powers, functions or duties of Executive or the assignment to
Executive of any duties inconsistent with his positions, duties,
responsibilities and status with the Employer, or a change in his reporting
responsibilities, titles or offices, or any removal of Executive from any of
such positions, except:  (1) in
connection with the termination by the Employer of his employment for Cause or
disability; or (2) in connection with the termination by Executive of his
employment other than for Good Reason; or (3) as a result of his death; or

 

(ii)                                  any purported
termination of Executive’s employment that is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 3(k) (and for
purposes of this Amended Agreement, no such purported termination shall be
effective).

 

(d)                                 It is the
intention of the parties hereto that the payments and other compensation
provided for herein are reasonable compensation for Executive’s services to the
Employer and shall not constitute an “excess parachute payment” within the
meaning of Section 280G of the Code and any regulations thereunder.  In the event that the Employer’s independent
accountants acting as auditors for the Employer determine that the payments
provided for herein under Section 4 hereof constitute an “excess parachute
payment” within the meaning of Section 280G of the Code and any
regulations thereunder, then the compensation payable under Section 4
hereof shall be reduced by the Employer in its sole discretion to the point
that such compensation shall not qualify as an “excess parachute payment”
within the meaning of Section 280G of the Code and any regulations
thereunder.

 

(e)                                  For purposes of
this Amended Agreement, “Severance from Employment” means the cessation of the
Executive’s employment with the Employer, including death, disability,
retirement, resignation or discharge. 
Any reference in this Amended Agreement to “termination” or “severance”
in the context of employment means Severance from Employment.

 

(f)                                    If the Employer
decides to terminate the Amended Agreement as a result of a dissolution of the
Employer under Code Section 331, or with the approval of a bankruptcy
court, the Employer must pay the severance or deferred compensation benefits in
a single lump sum within 24 months after termination.  In addition, the Employer must aggregate any
other deferred compensation arrangements as one undertaking and terminate them
in the foregoing manner, and the Employer must not adopt a new arrangement with
the Executive that would be aggregated with any terminated arrangements for
three years following the date of termination.

 

5.                                      Covenants.

 

(a)                                  Confidentiality.  The Executive shall not, without the prior
written consent of the Employer, disclose or use in any way, either during the
Employment Term or thereafter, except as required in the course of his
employment by Employer, any confidential business or technical information or
trade secret acquired in the course of the Executive’s employment by the Employer.  The Executive acknowledges and agrees that it
would be difficult to fully compensate the Employer for damages resulting from
the breach or threatened breach of the foregoing provision and, accordingly,
that the Employer shall be entitled to temporary 

 

8

 

preliminary
injunctions and permanent injunctions to enforce such provision.  This provision with respect to injunctive
relief shall not, however, diminish the Employer’s right to claim and recover
damages.  The Executive covenants to use
his best efforts to prevent the publication or disclosure of any trade secret
or any confidential information concerning the business or finances of Employer
or Employer’s affiliates, or any of their dealings, transactions or affairs
which may come to the Executive’s knowledge in the pursuance of his duties or
employment.

 

(b)                                 Non-Solicitation.

 

(i)                                     For a period
during which Employee receives payments from Employer after the termination of
Executive’s employment with the Employer for any reason (the “Date of
Termination”), Executive will not contact or solicit, whether personally or
indirectly through agents or representatives, any employee, consultant or
service provider of the Employer, the Company, any subsidiary of the Employer
or the Company, any affiliate of the Employer or the Company or any parent
corporation of the Employer or the Company (the “Employer Group”) for the
purpose of terminating his or her employment, consulting or service providing
relationship with any member of the Employer Group.  For purposes of this Section 5(b),
employee, consultant or service provider shall include any employee, consultant
or service provider who has performed any service or other work for any member
of the Employer Group, or entered into a written agreement to so perform any
such service or other work, at any time within six months prior to the Date of
Termination.

 

(ii)                                  For a period
during which Employee receives payments from Employer after the Date of
Termination, Executive will not contact or solicit, whether personally or
indirectly though agents or representatives, any current customer of the
Employer Group for the purposes of soliciting, diverting, or taking away or
attempting to so solicit, divert or take away from the Employer Group, the
banking or lending business of any customer of the Employer Group.

 

(iii)                               Executive
agrees to provide a copy, or accurate written summary, of any of these
restrictive covenants, still then applicable, to any person, firm, company or
corporation from whom he seeks employment if that person, firm, company or
corporation is a competitor of any member of the Employer Group.  Employer acknowledges that it has received a
copy of the restrictive covenants of its immediately prior employer.

 

(iv)                              Executive
represents to the Employer that the restrictions on his future business
opportunities as provided in this Amended Agreement are fair and protect
legitimate business interests of the Employer Group.  He further represents that, even considering
the restrictive covenants in this Amended Agreement, he expects to be able to
earn a good and reasonable living from those activities, areas, and
opportunities not restricted by this Amended Agreement.

 

(c)                                  Termination of
Payments.  Upon the
breach by the Executive of any covenant under this Section 5, the Employer
may terminate, offset or recover from the Executive immediately any and all
benefits paid to the Executive pursuant to this Amended Agreement, in addition
to any and all other remedies available to the Employer under the law or in
equity.

 

9

 

(d)                                 Modification.  Although the parties consider the
restrictions contained in this Section 5 reasonable as to protected
business, duration, and geographic area, in the event that any court of
competent jurisdiction deems them to be unreasonable, then such restrictions
shall apply to the broadest business, longest period, and largest geographic
territory as may be considered reasonable by such court, and this Section 5,
as so amended, shall be enforced.

 

(e)                                  Other
Agreements.  The
Executive represents and warrants that neither the Executive’s employment with
the Employer nor the Executive’s performance of his obligations hereunder will
conflict with or violate the Executive’s obligations under the terms of any
agreement with a previous employer or other party including agreements to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party.

 

6.                                      Withholding.

 

The
Employer shall deduct and withhold from compensation and benefits provided
under this Amended Agreement all necessary income and employment taxes and any
other similar sums required by law to be withheld.

 

7.                                      Rules,
Regulations and Policies.

 

The
Executive shall use his best efforts to abide by and comply with all of the
rules, regulations, and policies of the Employer, including without limitation
the Employer’s policy of strict adherence to, and compliance with, any and all
requirements of the banking, securities, and antitrust laws and regulations.

 

8.                                      Return
of Employer’s Property.

 

After
the Executive has received notice of termination or at the end of his period of
employment with Employer, whichever first occurs, the Executive shall
immediately return to Employer all documents and other property in his
possession belonging to Employer.

 

9.                                      Construction
and Severability.

 

The
invalidity of any one or more provisions of this Amended Agreement or any part
thereof, all of which are inserted conditionally upon their being valid in law,
shall not affect the validity of any other provisions to this Amended
Agreement; and in the event that one or more provisions contained herein shall
be invalid, as determined by a court of competent jurisdiction, this Amended
Agreement shall be construed as if such invalid provisions had not been
inserted.

 

10.                               Governing
Law.

 

This
Amended Agreement shall be governed by the laws of the United States, where
applicable, and otherwise by the laws of the State of Maryland other than the
choice of law rules thereof.

 

10

 

11.                               Assignability
and Successors.

 

This
Amended Agreement may not be assigned by the Executive or the Employer, except
that this Amended Agreement shall be binding upon and shall inure to the
benefit of the successor of the Employer through merger or corporate
reorganization.

 

12.                               Counterparts.

 

This
Amended Agreement may be executed in counterparts (each of which need not be
executed by each of the parties), which together shall constitute one and the
same instrument.

 

13.                               Jurisdiction
and Venue.

 

The
jurisdiction of any proceeding between the parties arising out of, or with
respect to, this Amended Agreement shall be in a court of competent
jurisdiction in the State of Maryland, and venue shall be in Prince George’s
County.  Each party shall be subject to
the personal jurisdiction of the courts of the State of Maryland.

 

14.                               Indemnification
and Insurance.

 

During
the Employment Term and for a period of six years thereafter, the Employer
shall cause the Executive to be covered by and named as an insured under any
policy or contract of insurance obtained to insure officers against personal
liability for acts or omissions in connection with service as a director or
officer of the Employer or any subsidiary or affiliate thereof or service in
other capacities at the request of the Employer.  The coverage provided to the Executive
pursuant to this section shall be of the same scope and on the same terms and
conditions as the coverage (if any) provided to other officers of the Employer.

 

To
the maximum extent permitted under applicable law, during the Employment Term
and for a period of 6 years thereafter, the Employer shall indemnify the
Executive against and hold him harmless from any costs, liabilities, losses and
exposures to the fullest extent and on the most favorable terms and conditions
that similar indemnification is offered to any officer of the Employer or any
subsidiary or affiliate thereof.

 

15.                               Notices.

 

All
notices, demands, requests, or other communications which may be or are
required to be given, served, or sent by any party to any other party pursuant
to this Amended Agreement shall be in writing and shall be hand delivered, sent
by overnight courier or mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, or transmitted by telegram, telecopy
or telex, addressed as follows:

 

(i)                                     If to the
Employer:

 

The Washington Savings Bank

4201
Mitchellville Road

Bowie,
MD 20716

Attn:
 Chair, Board of Directors

 

with
a copy (which shall not constitute notice) to:

 

11

 

Frank
C. Bonaventure, Esq.

Ober,
Kaler, Grimes & Shriver, P.C.

120
E. Baltimore Street

Baltimore,
MD 21202

Fax:
443-263-7505

 

(ii)                                  If to the
Executive:

 

Phillip
C. Bowman

636
Cove Terrace

Arnold,
MD 21012

 

Each
party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or
sent.  Each notice, demand, request, or
communication which shall be hand delivered, sent, mailed, telecopied or
telexed in the manner described above, or which shall be delivered to a
telegraph company, shall be deemed sufficiently given, served, sent, received
or delivered for all purposes at such time as it is delivered to the addressee
(with the return receipt, the delivery receipt, or (with respect to a telecopy
or telex) the answerback being deemed conclusive, but not exclusive, evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.

 

16.                               Compliance
with Internal Revenue Code Section 409A.

 

(a)                                  If the
implementation of any of the provisions of the Amended Agreement would subject
the Executive to taxes or penalties under Code Section 409A, the parties
agree that the implementation of such provision shall be modified, or the
Amended Agreement will be amended, to avoid such taxes and penalties while
preserving the benefits intended to be provided to the Executive under the
Amended Agreement to the maximum extent possible.

 

(b)                                 The payment of
any benefit hereunder may not be deferred or accelerated in a manner that is
inconsistent with the requirements of Code Section 409A.

 

17.                               Dispute
Resolution.

 

Executive
and Employer hereby agree that any and all disputes between the parties shall
be resolved exclusively by the Complaint Resolution Procedures of the Bank’s
Employee Policy Manual (“Handbook”) and, if such dispute cannot be resolved
internally and involves a claim for money damages, by binding arbitration under
the then applicable rules of JAMS (Judicial Arbitration &
Mediation Services, of Washington D.C.) for the resolution of employment
disputes.  The arbitration shall be held
in Bowie, Maryland or such other location as the parties may mutually
agree.  The administrative costs and
arbitrator fees associated with the arbitration will be paid by the Employer to
the extent any controlling judicial precedent or statute requires an employer
to bear such costs in order to enforce this section of the Agreement to
arbitrate.

 

12

 

This
obligation to arbitrate rather than seeking official judicial relief shall
apply regardless of whether the dispute is grounded in contract, tort or
statutory law.  Without limiting the
foregoing, this duty to arbitrate expressly covers claims under Title VII of
the Civil Rights Act of 1964, as amended, the Maryland Fair Employment
Practices Act, the Americans With Disabilities Act, the Age Discrimination in
Employment Act and other similar statutes prohibiting discrimination on the
basis of various personal characteristics. 
The arbitrator may award attorneys’ fees to the prevailing party if, in
the arbitrator’s opinion, the losing party asserted an unreasonable position.

 

This
Agreement does not alter the “at will” nature of the employment relationship
between the parties, and Executive acknowledges that either party may terminate
this Agreement as provided herein.

 

This
pre-dispute resolution agreement covers all matters directly or indirectly
related to Executive’s recruitment, employment or termination of employment by
the Banks but excluding Worker’s Compensation Claims.

 

18.                               Miscellaneous.

 

This
Amended Agreement constitutes the entire understanding and agreement between
the parties with respect to the subject matter hereof and shall supersede all
prior understandings and agreements.

 

This
Amended Agreement cannot be amended, modified, or supplemented in any respect,
except by a subsequent written agreement entered into by the parties hereto.

 

The
services to be performed by the Executive are special and unique; it is agreed
that any breach of this Amended Agreement by the Executive shall entitle the
Employer (or any successors or assigns of the Employer), in addition to any
other legal remedies available to them, to apply to any court of competent
jurisdiction to enjoin such breach.

 

*          *          *

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement, or
caused this Agreement to be duly executed on their behalf, as of the date and
year first above written.

 

	
  Attest:

  	
   

  	
  THE
  WASHINGTON SAVINGS BANK

  
	
   

  	
   

  	
   

  
	
  /s/
  Cheryl Golden

  	
   

  	
  /s/
  Kevin P. Huffman

  
	
   

  	
   

  	
  By:
   Kevin P. Huffman

  
	
   

  	
   

  	
  Its:
   President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Phillip C. Bowman

  
	
   

  	
   

  	
  Phillip
  C. Bowman

  
	
   

  	
   

  	
  Executive

  

 

13Exhibit 10.3

 

June 2,
2010

 

 

Mr. Craig
Storey

 

 

Dear Craig,

 

 

On behalf of
the team here at Heelys, I’d like to extend an offer to join us.  As we work to remake the company and return
the brand to the status it deserves we believe that your talent, skills and
experience would be invaluable to us.

 

The details
of this offer, as we discussed, would be:

 

1)    Title of
Chief Operating Officer

2)    Starting
base salary of $200,000

3)    50,000
options to be granted by the compensation committee and voted on by the board
with eligibility for additional options or restricted share grants to be
reviewed by the compensation committee by request as well as through the Long
Term Management Incentive Plan

4)    Inclusion in
the newly implemented bonus plan at the COO/CFO level

5)    Benefits as
outlined by company policy

6)    A signing
bonus of $15,000 that would cover any moving and temporary living expenses

7)    Your request
for six months severance for dismissal without cause will be honored as well as
one year for change of control in the first twelve months of your employment
and six months for the next two years.

 

Your primary
responsibilities would include:

 

1)    All of the
reporting, supervisory and legal responsibilities consistent with the position
of CFO of this publicly traded company including, but not limited to; investor
relations and communications, investment policy, insurance, SEC compliance,
liaison with the Board of Directors

2)    Monitoring
our legal issues, relationships and expenses

3)    Leading HR

4)    Leading IT
including the assessment of and implementation of any issues regarding the
company’s ability to do business affordably, efficiently and globally

5)    Work with
our international group on contracts, distribution and legal issues

 

And maybe
most importantly, be a leader here at Heelys. 
Contribute to the culture of winning, innovation and success that we are
working hard every day to build here.

 

 

Per company
policy, this offer is subject to a standard background check.  If these terms are acceptable, please let me
know as soon as possible.  We would like
you to be in Dallas Monday June 7, 2010 to begin the transition while Lisa
is still here.  I understand that you are
traveling with your wife on business to Germany the following week and that
will be fine.  If you have any questions
please feel free to call me.

 

We’re
looking forward to you joining the Heelys team.

 

 

	
  Best
  regards,

  	
   

  	 

	 
	
   

  	
   

  
	
  /s/ Thomas
  C. Hansen

  	
   

  	 

	
   

  	
   

  	 

	
  Tom Hansen

  	
   

  	 

	 
	
   

  	
   

  
	 
	
  President
  and Chief Executive Officer

  	
   

  
	 
	
   

  	
   

  
	 
	
  Heelys, Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]