UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended December 31, 2010
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-34403
Territorial Bancorp Inc.
(Name of Registrant as Specified in its Charter)
| Maryland | 26-4674701 | |
|
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification Number) |
|
|
1132 Bishop Street, Suite 2200, Honolulu, Hawaii |
96813 | |
| (Address of Principal Executive Office) | (Zip Code) | |
(808) 946-1400
(Registrant’s Telephone Number including area code)
Securities Registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.01 per share
(Title of Class)
The NASDAQ Stock Market LLC
(Name of exchange on which registered)
Securities Registered Under Section 12(g) of the Exchange Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ¨ NO x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of 15(d) of the Act. YES ¨ NO x
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file reports), and (2) has been subject to such requirements for the past 90 days.
(1) YES x NO ¨
(2) YES x NO ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ¨ | Accelerated filer | x | |||
| Non-accelerated filer | ¨ | Smaller reporting company | ¨ | |||
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ¨ YES x NO
The aggregate value of the voting common equity held by non-affiliates of the Registrant, computed by reference to the closing price of the Registrant’s shares of common stock as of June 30, 2010 ($18.95) was $226.1 million.
As of February 28, 2011, there were 12,127,068 shares outstanding of the Registrant’s common stock.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TERRITORIAL BANCORP, INC.
FORM 10-K/A
Explanatory Note
This amendment to FORM 10-K/A is being filed to include exhibits that were inadvertently omitted from the initial filing.
PART IV
| ITEM 15. Exhibits | and Financial Statement Schedules |
(a) Financial Statements
The following documents are filed as part of this annual report:
| (i) | Report of Independent Registered Public Accounting Firm |
| (ii) | Consolidated Balance Sheets at December 31, 2010 and 2009 |
| (iii) | Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008 |
| (iv) | Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the years ended December 31, 2010, 2009 and 2008 |
| (v) | Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 |
| (vi) | Notes to Consolidated Financial Statements |
| (b) | Exhibits. |
| 3.1 | Articles of Incorporation of Territorial Bancorp Inc.* |
| 3.2 | Bylaws of Territorial Bancorp Inc.* |
| 4 | Form of Common Stock Certificate of Territorial Bancorp Inc.* |
| 10.1 | Employment Agreement between Territorial Bancorp Inc. and Allan S. Kitagawa** |
| 10.2 | Employment Agreement between Territorial Savings Bank and Allan S. Kitagawa* |
| 10.3 | First Amendment to Employment Agreement between Territorial Savings Bank and Allan S. Kitagawa |
| 10.4 | Employment Agreement between Territorial Bancorp Inc. and Vernon Hirata** |
| 10.5 | Employment Agreement between Territorial Savings Bank and Vernon Hirata* |
| 10.6 | First Amendment to Employment Agreement between Territorial Savings Bank and Vernon Hirata |
| 10.7 | Employment Agreement between Territorial Bancorp Inc. and Ralph Y. Nakatsuka** |
| 10.8 | Employment Agreement between Territorial Savings Bank and Ralph Y. Nakatsuka* |
| 10.9 | First Amendment to Employment Agreement between Territorial Savings Bank and Ralph Y. Nakatsuka |
| 10.10 | Supplemental Executive Retirement Agreement between Territorial Savings Bank and Allan S. Kitagawa* |
| 10.11 | Supplemental Executive Retirement Agreement between Territorial Savings Bank and Vernon Hirata* |
| 10.12 | Supplemental Executive Retirement Agreement between Territorial Savings Bank and Ralph Y. Nakatsuka* |
| 10.13 | Executive Deferred Incentive Agreement between Territorial Savings Bank and Allan S. Kitagawa* |
| 10.14 | Executive Deferred Incentive Agreement between Territorial Savings Bank and Vernon Hirata* |
| 10.15 | [Reserved] |
| 10.16 | Territorial Savings Bank Non-Qualified Supplemental Employee Stock Ownership Plan** |
| 10.17 | Territorial Savings Bank Executive Incentive Compensation Plan* |
| 10.18 | First Amendment to Territorial Savings Bank Executive Incentive Compensation Plan* |
| 10.19 | Second Amendment to Territorial Savings Bank Executive Incentive Compensation Plan |
| 10.20 | Territorial Bancorp Inc. 2010 Equity Incentive Plan*** |
| 10.21 | Form of Employee Restricted Stock Award |
| 10.22 | Form of Employee Stock Option Award |
| 10.23 | Form of Director Restricted Stock Award |
| 10.24 | Form of Director Stock Option Award |
| 10.25 | Territorial Savings Bank Separation Pay Plan and Summary Plan Description* |
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| * | Incorporated by reference to the Registration Statement on Form S-1 (file no. 333-155388), initially filed November 14, 2008. |
| ** | Incorporated by reference to the Current Report on Form 8-K (file no. 1-34403), filed November 18, 2009. |
| *** | Incorporated by reference to the Proxy Statement for the 2010 Annual Meeting of Stockholders (file no. 1-34403), filed July 12, 2010. |
| (c) | Financial Statement Schedules |
Not applicable.
SIGNATURES
In accordance with Section 13 of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TERRITORIAL BANCORP INC. | ||||||
| Dated: March 24, 2011 | By: | /s/ Allan S. Kitagawa | ||||
| Allan S. Kitagawa | ||||||
|
Chairman of the Board, President and Chief Executive Officer |
||||||
| (Duly Authorized Representative) | ||||||
Exhibit 10.3
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
First Amendment, dated as of November 13, 2009 (the “Amendment”), to the Territorial Savings Bank Employment Agreement, dated as of October 29, 2008 (the “Employment Agreement”), by and between Territorial Savings Bank, located at 1132 Bishop Street, 22 nd Floor, Honolulu, Hawaii 96813 (the “Bank”), and Allan S. Kitagawa (the “Executive”). Capitalized terms which are not defined herein shall have the same meaning as set forth in the Employment Agreement.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Employment Agreement to make certain changes; and
WHEREAS, Section 13 of the Employment Agreement provides that the parties hereto may amend the Employment Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual agreements herein set forth and such other consideration the sufficiency of which is hereby acknowledged, the Bank and the Executive hereby agree as follows:
1. New Section 6(e) of the Employment Agreement . Section 6(e) of the Employment Agreement is hereby added to read in its entirety as follows:
“(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 Bank 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 Bank and (iii) investment and retirement counseling and estate planning. Notwithstanding the foregoing, the annual cost to the Bank of such services shall not exceed $6,000 (the “Annual Cost”). Reimbursement of the Annual Cost shall be paid promptly by the Bank 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 Bank and, if increased, shall be reflected in an addendum hereto.”
2. Amendment to Section 7 of the Employment Agreement . The second sentence in Section 7 of the Plan is hereby amended and restated to read in its entirety as follows:
“Commencing on February 1, 2010 and continuing on February 1 st of each year thereafter (each an “Anniversary Date”), the disinterested members of the Board of Directors of the Bank 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 16 of this Agreement.”
3. Effectiveness , This Amendment shall be deemed effective as of the date first above written, as if executed on such date. Except as expressly set forth herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Employment Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect and shall be otherwise unaffected,
4. Governing Law . This Amendment and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Hawaii applicable to contracts entered into and to be performed entirely within the State of Hawaii, except to the extent that federal law controls.
5. Counterparts . This Amendment may be executed in two or more counterparts, each of which shall for all purposes be deemed an original, and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Bank and the Executive have duly executed this First Amendment as of the day and year first above written
| TERRITORIAL SAVINGS BANK | ||
| By: | /s/ Harold Ohama | |
| Name: | Harold Ohama | |
| Title: | Chairman of the Compensation Committee | |
| /s/ Allan S. Kitagawa | ||
| Allan S. Kitagawa, Executive | ||
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Exhibit 10.6
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
First Amendment, dated as of November 13, 2009 (the “Amendment”), to the Territorial Savings Bank Employment Agreement, dated as of October 29, 2008 (the “Employment Agreement”), by and between Territorial Savings Bank, located at 1132 Bishop Street, 22 nd Floor, Honolulu, Hawaii 96813 (the “Bank”), and Vernon Hirata (the “Executive”). Capitalized terms which are not defined herein shall have the same meaning as set forth in the Employment Agreement.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Employment Agreement to make certain changes; and
WHEREAS, Section 12 of the Employment Agreement provides that the parties hereto may amend the Employment Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual agreements herein set forth and such other consideration the sufficiency of which is hereby acknowledged, the Bank and the Executive hereby agree as follows:
1. New Section 5(e) of the Employment Agreement . Section 5(e) of the Employment Agreement is hereby added to read in its entirety as follows:
“(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 Bank 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 Bank and (iii) investment and retirement counseling and estate planning. Notwithstanding the foregoing, the annual cost to the Bank of such services shall not exceed $5,000 (the “Annual Cost”). Reimbursement of the Annual Cost shall be paid promptly by the Bank 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 Bank and, if increased, shall be reflected in an addendum hereto.”
2. Amendment to Section 6 of the Employment Agreement . The second sentence in Section 6 of the Plan is hereby amended and restated to read in its entirety as follows:
“Commencing on February 1, 2010 and continuing on February 1 st of each year thereafter (each an “Anniversary Date”), the Board of Directors of the Bank 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.”
3. Effectiveness . This Amendment shall be deemed effective as of the date first above written, as if executed on such date. Except as expressly set forth herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Employment Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect and shall be otherwise unaffected.
4. Governing Law . This Amendment and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Hawaii applicable to contracts entered into and to be performed entirely within the State of Hawaii, except to the extent that federal law controls,
5. Counterparts , This Amendment may be executed in two or more counterparts, each of which shall for all purposes be deemed an original, and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Bank and the Executive have duly executed this First Amendment as of the day and year first above written
| TERRITORIAL SAVINGS BANK | ||
| By: | /s/ Harold Ohama | |
| Name: | Harold Ohama | |
| Title: | Chairman of the Compensation Committee | |
| /s/ Vernon Hirata | ||
| Vernon Hirata, Executive | ||
2
Exhibit 10.9
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
First Amendment, dated as of November 13, 2009 (the “Amendment”), to the Territorial Savings Bank Employment Agreement, dated as of October 29, 2008 (the “Employment Agreement”), by and between Territorial Savings Bank, located at 1132 Bishop Street, 22 nd Floor, Honolulu, Hawaii 96813 (the “Bank”), and Ralph Nakatsuka (the “Executive”). Capitalized terms which are not defined herein shall have the same meaning as set forth in the Employment Agreement.
W I T H N E S S E T H:
WHEREAS, the parties desire to amend the Employment Agreement to make certain changes; and
WHEREAS, Section 12 of the Employment Agreement provides that the parties hereto may amend the Employment Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual agreements herein set forth and such other consideration the sufficiency of which is hereby acknowledged, the Bank and the Executive hereby agree as follows:
1. New Section 5(e) of the Employment Agreement . Section 5(e) of the Employment Agreement is hereby added to read in its entirety as follows:
“(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 Bank 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 Bank and (iii) investment and retirement counseling and estate planning. Notwithstanding the foregoing, the annual cost to the Bank of such services shall not exceed $5,000 (the “Annual Cost”). Reimbursement of the Annual Cost shall be paid promptly by the Bank 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 Bank and, if increased, shall be reflected in an addendum hereto.”
2. Amendment to Section 6 of the Employment Agreement . The second sentence in Section 6 of the Plan is hereby amended and restated to read in its entirety as follows:
“Commencing on February 1, 2010 and continuing on February 1 st of each year thereafter (each an “Anniversary Date”), the disinterested members of the Board of Directors of the Bank 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.”
3. Effectiveness . This Amendment shall be deemed effective as of the date first above written, as if executed on such date, Except as expressly set forth herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Employment Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect and shall be otherwise unaffected.
4. Governing Law . This Amendment and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Hawaii applicable to contracts entered into and to be performed entirely within the State of Hawaii, except to the extent that federal law controls.
5. Counterparts . This Amendment may be executed in two or more counterparts, each of which shall for all purposes be deemed an original, and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Bank and the Executive have duly executed this First Amendment as of the day and year first above written
| TERRITORIAL SAVINGS BANK | ||
| By: | /s/ Harold Ohama | |
| Name: | Harold Ohama | |
| Title: | Chairman of the Compensation Committee | |
| /s/ Ralph Nakatsuka | ||
| Ralph Nakatsuka, Executive | ||
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Exhibit 10.19
SECOND AMENDMENT
TERRITORIAL SAVINGS BANK
EXECUTIVE INCENTIVE COMPENSATION PLAN
WHEREAS, Territorial Savings Bank (the “Bank”) maintains an annual cash bonus plan known as the Executive Incentive Compensation Plan (the “EICP”); and
WHEREAS , at its joint meeting on December 29, 2009, the Compensation Committee (the “Committee”) of the Bank and the Board of Directors (the “Board”) of the Bank reviewed the 2010 Market Analysis dated December 18, 2009 prepared by Amalfi Consulting, LLC and other materials and agreed to amend the EICP to increase the long term component to 44%, effective for 2010 performance, which raises the total bonus opportunity to 100% of salary for the top three executive officers; and
WHEREAS , the Committee and the Board also wish to amend the EICP to add two new goals under the category of “Non-Financial Goals” for 2010, each weighted at 10.5%, for a total bonus opportunity of 21% of base salary for this component of the EICP; and
WHEREAS , the EICP provides that the Committee and the Board must approve any changes to the EICP, and the Committee and the Board have approved the changes to the EICP as set forth here at the joint meeting on December 29, 2009;
NOW THEREFORE , the EICP is hereby amended as follows:
1. The following is added to the end of the Section entitled “Non-Financial Goals:”
Effective January 1, 2010, the following two non-financial goals shall apply for 2010 performance. Each goal is weighted at 10.5%, for a total bonus opportunity of 21% of base salary for the non-financial goal component.
1. Completing the actions for 2010 as outlined in the August 2007 Interest Rate Risk Reduction Plan.
2. Conducting the testing of controls by year-end 2010 as required by the Sarbanes-Oxley Act.
2. The following is added to the end of the Section entitled, “Long Term Performance:” “Notwithstanding the preceding, effective January 1, 2010, up to 44% of the executive’s award is based on the long term performance of the Bank.”
IN WITNESS WHEREOF , the Bank has adopted this Second Amendment.
| TERRITORIAL SAVINGS BANK | ||||||
| By: | ||||||
| Date | Chairman of the Compensation Committee | |||||
Exhibit 10.21
EMPLOYEE
R ESTRICTED S TOCK A WARD
Granted by
TERRITORIAL BANCORP INC.
under the
TERRITORIAL BANCORP INC.
2010 EQUITY INCENTIVE PLAN
This restricted stock agreement (“ Restricted Stock Award ” or “ Agreement ”) is and shall be subject in every respect to the provisions of the 2010 Equity Incentive Plan (the “ Plan ”) of Territorial Bancorp Inc. (the “ Company ”) which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement. A copy of the Plan has been provided to each person granted a Restricted Stock Award pursuant to the Plan. The holder of this Restricted Stock Award (the “ Participant ”) hereby accepts this Restricted Stock Award, subject to all the terms and provisions of the Plan and this Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Committee appointed to administer the Plan (“ Committee ”) or the Board shall be final, binding and conclusive upon the Participant and the Participant’s heirs, legal representatives, successors and permitted assigns. Except where the context otherwise requires, the term “Company” shall include the parent and all present and future subsidiaries of the Company as defined in Section 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the “ Code ”). Capitalized terms used herein but not defined shall have the same meaning as in the Plan.
| 1. | Name of Participant : |
| 2. | Date of Grant : |
| 3. | Total number of shares of Company common stock covered by the Restricted Stock Award : |
(subject to adjustment pursuant to Section 9 below).
| 4. | Vesting Schedule . Except as otherwise provided in this Agreement, this Restricted Stock Award becomes earned in accordance with the vesting schedule set forth below. |
| 5. | Grant of Restricted Stock Award. |
The Restricted Stock Award shall be in the form of issued and outstanding shares of Stock that shall be registered in the name of the Participant and held by the Company, together with a stock power executed by the Participant in favor of the Company (if the Company so requests), pending the satisfaction of the conditions to which the Restricted Stock Award is subject.
The shares of common stock awarded under this Restricted Stock Award may be issued in certificate form or in electronic form, in the discretion of the Company. If the shares are certificated, the Participant shall receive a certificate or certificates representing the shares of Restricted Stock that have been awarded to him. The certificates evidencing the Restricted Stock Award shall bear a legend restricting the transferability of the Restricted Stock. The Restricted Stock awarded to the Participant shall not be sold, encumbered, hypothecated or otherwise transferred except in accordance with the terms of the Agreement, until such Restricted Stock has vested.
| 6. | Voting and Dividends . |
The Participant shall have the right to vote the shares of Restricted Stock awarded hereunder. Any dividends or distributions declared and paid with respect to shares of Stock subject to the Restricted Stock Award, other than a stock dividend consisting of shares of Stock, will be distributed to the Participant.
| 7. | Delivery of Shares and Share Holding Requirement . |
Delivery of shares of Stock under this Restricted Stock Award shall be subject to the following:
| (i) | Delivery of shares of Stock shall comply with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities exchange or similar entity. |
| (ii) | The issuance of shares of Stock pursuant to this Restricted Stock Award may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
| (iii) | 50% of the total number of vested Net Shares (as defined below) must be held by the Participant until termination of service with the Company or the Bank (which includes performing any services for the Company or the Bank as a consultant). “Net Shares” means the number of shares left in the Award after the required number of shares have been sold to pay taxes owed on the Award (for example, if the Award was for 100 shares and 50 shares are sold to pay taxes on the Award, such that the Participant is left with 50 Net Shares, 25 of those Net Shares would be subject to this holding requirement, such that the Participant may not sell those 25 shares until termination of service, which may be before Retirement). |
| 8. | Change in Control. |
| (i) | In the event of a Change in Control, all Restricted Stock Awards held by the Participant shall become fully vested, whether or not the Participant has a Termination of Service (other than for Cause). |
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| (ii) | A “ Change in Control ” shall be deemed to have occurred as provided in Section 4.2 of the Plan. |
| 9. | Adjustment Provisions. |
This Restricted Stock Award, including the number of shares subject to the Restricted Stock Award, shall be adjusted upon the occurrence of the events specified in, and in accordance with the provisions of, Section 3.4 of the Plan.
| 10. | Effect of Termination of Service on Restricted Stock Award. |
This Restricted Stock Award shall vest as follows under the stated circumstances:
| (i) | Death . This Restricted Stock Award shall vest immediately in the event of the Participant’s Termination of Service by reason of the Participant’s death. |
| (ii) | Disability . This Restricted Stock Award shall vest immediately in the event of the Participant’s Termination of Service by reason of Disability. Except to the extent prohibited by Code Section 409A, the Committee shall have sole authority and discretion to determine whether the Participant’s Service has been terminated by reason of Disability. |
| (iii) | Retirement. If the Participant’s Service terminates by reason of the Participant’s Retirement, the Participant’s unvested Restricted Stock Awards shall continue to vest in accordance with the schedule set forth above, provided that, at the request of the Company the Participant serves as a consultant to the Company following Retirement. For purposes of this Award, Retirement means retirement from employment as an Employee on or after attainment of age 65. An Employee who is also a Director shall not be deemed to have terminated due to Retirement until both Service as an Employee and Service as a Director have ceased. |
| (iv) | Termination for Cause . If the Participant’s Service has been terminated for Cause, this Restricted Stock Award shall immediately terminate and be of no further force and effect. The Committee shall have sole authority and discretion to determine whether the Participant’s employment has been terminated for Cause. |
| (v) | Other Termination . If the Participant’s Service terminates for any reason other than death, Disability, Retirement or for Cause, all shares of Restricted Stock awarded to the Participant which have not vested shall be forfeited by such Participant. |
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| 11. | Miscellaneous. |
| (i) | No Restricted Stock Award shall confer upon the Participant any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights. |
| (ii) | This Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Participant. |
| (iii) | Restricted Stock Awards are not transferable prior to the time such Awards vest in the Participant. |
| (iv) | This Restricted Stock Award is subject to all laws, regulations and orders of any governmental authority which may be applicable thereto and, notwithstanding any of the provisions hereof, the Company will not be obligated to issue any shares of stock hereunder if the issuance of such shares would constitute a violation of any such law, regulation or order or any provision thereof. |
| (v) | The granting of this Restricted Stock Award does not confer upon the Participant any right to be retained in the employ of the Company or any subsidiary. |
[Signature Page Follows]
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IN WITNESS WHEREOF , the Company has caused this instrument to be executed in its name and on its behalf as of the date of grant of this Restricted Stock Award set forth above.
| TERRITORIAL BANCORP INC. | ||
| By: | ||
PARTICIPANT’S ACCEPTANCE
The undersigned hereby accepts the foregoing Restricted Stock Award and agrees to the terms and conditions hereof, including the terms and provisions of the 2010 Equity Incentive Plan. The undersigned hereby acknowledges receipt of a copy of the Company’s 2010 Equity Incentive Plan.
| P ARTICIPANT |
5
EXHIBIT A
ACKNOWLEDGMENT OF RECEIPT OF EARNED SHARES
I hereby acknowledge the delivery to me by Territorial Bancorp Inc. (the “Company”) or its affiliate on _____________________________, of stock certificates for ____________________ shares of common stock of the Company earned by me pursuant to the terms and conditions of the Restricted Stock Agreement and the Territorial Bancorp Inc. 2010 Equity Incentive Plan, which shares were transferred to me on the Company’s stock record books on _____________________.
| Date: | ||||||
| Participant’s signature | ||||||
6
EXHIBIT TO FORM OF RESTRICTED STOCK AGREEMENT
On August 19, 2010, the Compensation Committee granted the following restricted stock awards to our named executive officers: Mr. Kitagawa was granted 184,108 shares; Mr. Miyamoto was granted 14,729 shares; Mr. Hirata was granted 121,512 shares; Mr. Nakatsuka was granted 106,783 shares; and Mr. Lau was granted 14,729 shares.
The awards vest as follows:
|
Date |
Vested Portion of Award | |
|
August 19, 2010 |
0/6 | |
|
August 19, 2011 |
1/6 | |
|
August 19, 2012 |
2/6 | |
|
August 19, 2013 |
3/6 | |
|
August 19, 2014 |
4/6 | |
|
August 19, 2015 |
5/6 | |
|
August 19, 2016 |
6/6 |
7
Exhibit 10.22
EMPLOYEE
S TOCK O PTION
Granted by
TERRITORIAL BANCORP INC.
under the
TERRITORIAL BANCORP INC.
2010 EQUITY INCENTIVE PLAN
This stock option agreement (“ Option ” or “ Agreement ”) is and shall be subject in every respect to the provisions of the 2010 Equity Incentive Plan (the “ Plan ”) of Territorial Bancorp Inc. (the “ Company ”) which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement. A copy of the Plan has been provided to each person granted a stock option pursuant to the Plan. The holder of this Option (the “ Participant ”) hereby accepts this Option, subject to all the terms and provisions of the Plan and this Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Committee appointed to administer the Plan (“ Committee ”) or the Board shall be final, binding and conclusive upon the Participant and the Participant’s heirs, legal representatives, successors and permitted assigns. Except where the context otherwise requires, the term “Company” shall include the parent and all present and future subsidiaries of the Company as defined in Section 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the “ Code ”). Capitalized terms used herein but not defined shall have the same meaning as in the Plan.
| 1. | Name of Participant : |
| 2. | Date of Grant: |
| 3. | Total number of shares of Company common stock that may be acquired pursuant |
| to this Option : |
(subject to adjustment pursuant to Section 10 below).
| • |
All options shall be Incentive Stock Options to the extent possible under applicable IRS rules, with the remainder being Non-Qualified Options. Any Incentive Stock Option that does not qualify as such shall be treated as an Non-Qualified Option. |
| 4. | Exercise price per share: |
(subject to adjustment pursuant to Section 10 below)
| 5. | Expiration Date of Option: |
| 6. | Vesting Schedule . Except as otherwise provided in this Agreement, this Option first becomes exercisable in accordance with the vesting schedule set forth below. This Option may not be exercised on or after the Option’s expiration date. |
| 7. | Exercise Procedure . |
This Option shall be exercised in whole or in part by the Participant’s delivery to the Company of written notice (the “ Notice of Exercise of Option ” attached hereto as Exhibit A) setting forth the number of shares with respect to which this Option is to be exercised, together with payment by cash or other means acceptable to the Committee, including:
| (i) | by tendering, either actually or by attestation, shares of Stock valued at Fair Market Value as of the day of exercise; |
| (ii) | by irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise; |
| (iii) | by personal, certified or cashier’s check, or |
| (iv) | by other property deemed acceptable by the Committee; or |
| (v) | by any combination thereof. |
| 8. | Delivery of Shares and Share Holding Requirement. |
Delivery of shares of Stock upon the exercise of this Option shall be subject to the following:
| (i) | Delivery of shares of Stock shall comply with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities exchange or similar entity. |
| (ii) | The issuance of shares of Stock pursuant to the exercise of this Option may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
| (iii) | 50% of the total number of vested Net Shares (as defined below) must be held by the Participant until termination of service with the Company or the Bank (which includes performing any services for the Company or the Bank as a consultant). “Net Shares” means the number of shares left in the Award after the required number of shares have been sold to pay taxes owed on the Award (for example, if the Award was for 100 shares and 50 shares are sold to pay taxes on the Award, such that the Grantee is left with 50 Net Shares, 25 of those Net Shares would be subject to this holding requirement, such that the Grantee may not sell those 25 shares until termination of service, which may be before Retirement). |
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| 9. | Change in Control. |
| (i) | In the event of a Change in Control, all Options held by the Participant shall become fully vested and exercisable, subject to the expiration provisions otherwise applicable to the Option, whether or not the Participant has a Termination of Service other than for Cause. |
| (ii) | A “ Change in Control ” shall be deemed to have occurred as provided in Section 4.2 of the Plan. |
| 10. | Adjustment Provisions. |
This Option, including the number of shares subject to the Option and the exercise price, shall be adjusted upon the occurrence of the events specified in, and in accordance with the provisions of, Section 3.4 of the Plan.
| 11. | Termination of Option and Accelerated Vesting . |
This Option shall terminate upon the Option’s expiration date, or earlier as follows:
| (i) | Death . This Option shall vest and become exercisable in full in the event of the Participant’s Termination of Service by reason of the Participant’s death while this Option is unexercised. This Option may thereafter be exercised by the legal representative or legatee of the Participant for a period of one year from the date of death, subject to termination on the expiration date of this Option, if earlier. |
| (ii) | Disability . This Option shall vest and become exercisable in full in the event of the Participant’s Termination of Service by reason of Disability while this Option is unexercised. This Option may thereafter be exercised for a period of one year from the date of such Termination of Service by reason of Disability, subject to termination on the Option’s expiration date, if earlier. Except to the extent prohibited by Code Section 409A, the Committee shall have sole authority and discretion to determine whether the Participant’s Service has been terminated by reason of Disability. |
| (iii) | Retirement . If the Participant’s Service terminates by reason of the Participant’s Retirement, the Participant’s vested Options shall remain exercisable for the duration of the term set forth in the Award Agreement and the Participant’s unvested Options shall continue to vest in accordance with the schedule set forth above, provided that, at the request of the Company the Participant serves as a consultant to the Company following Retirement. For purposes of this Award, Retirement means retirement from employment as an Employee on or after attainment of age 65. An Employee who is also a Director shall not be deemed to have terminated Service due to Retirement until both Service as an Employee and Service as a Director have ceased. |
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| (iv) | Termination for Cause . If the Participant’s Service has been terminated for Cause, this Option shall immediately terminate and be of no further force and effect. The Board of Directors shall have sole authority and discretion to determine whether the Participant’s employment has been terminated for Cause. |
| (v) | Other Termination . If the Participant’s Service terminates for any reason other than death, Disability, Retirement or for Cause, this Option may thereafter be exercised, to the extent it was exercisable at the time of such termination, for a period of three months following termination, subject to termination on the Option’s expiration date, if earlier. |
| (vi) | Incentive Option Treatment . No Option shall be eligible for treatment as an incentive stock option in the event such Option is exercised more than three months following termination of employment, or one year following termination of employment due to Disability and provided further, in order to obtain incentive stock option treatment for Options exercised by heirs or devisees of a Participant, the Participant’s death must have occurred while employed or within three (3) months after termination of employment. |
| 12. | Miscellaneous. |
| (i) | No Option shall confer upon the Participant any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights. |
| (ii) | This Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Participant. |
| (iii) | Except as otherwise provided by the Committee, Options under the Plan are not transferable other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order. The Committee shall have the discretion to permit the transfer of Options (except Incentive Stock Options) under the Plan; provided, however, that such transfers shall be limited to Immediate Family Members of Participants, trusts and partnerships established for the primary benefit of such Immediate Family Members or to charitable organizations, and, provided, further, that such transfers are not made for consideration to the Participant. |
| (iv) | This Option is subject to all laws, regulations and orders of any governmental authority which may be applicable thereto and, notwithstanding any of the provisions hereof, the Participant agrees that he will not exercise the Option granted hereby nor will the Company be obligated to issue any shares of stock hereunder if the exercise thereof or the issuance of such shares, as the case may be, would constitute a violation by the Participant or the Company of any such law, regulation or order or any provision thereof. |
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| (v) | The granting of this Option does not confer upon the Participant any right to be retained in the employ of the Company or any subsidiary. |
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed in its name and on its behalf as of the date of grant of this Option set forth above.
| TERRITORIAL BANCORP INC. | ||
| By: | ||
PARTICIPANT’S ACCEPTANCE
The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions hereof, including the terms and provisions of the 2010 Equity Incentive Plan. The undersigned hereby acknowledges receipt of a copy of the Company’s 2010 Equity Incentive Plan.
| P ARTICIPANT |
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EXHIBIT A
NOTICE OF EXERCISE OF OPTION
(BY EMPLOYEES)
I hereby exercise the stock option (the “Option”) granted to me by Territorial Bancorp Inc. (the “Company”) or its affiliate, subject to all the terms and provisions set forth in the Stock Option Agreement (the “Agreement”) and the Territorial Bancorp Inc. 2010 Equity Incentive Plan (the “Plan”) referred to therein, and notify you of my desire to purchase __________________ shares of common stock of the Company (“Common Stock”) for a purchase price of $_________ per share.
|
I am exercising |
___________ Incentive Stock Options | |
| ___________ Non-qualified Stock Options |
Enclosed please find (check one or more, as applicable):
| ¨ | Cash, personal, certified or cashier’s check in the sum of $ , in full/partial payment of the purchase price. |
| ¨ | Stock of the Company with a fair market value of $______ in full/partial payment of the purchase price.* |
| ¨ | My check in the sum of $_______ and stock of the Company with a fair market value of $ , in full/partial payment of the purchase price.* |
| ¨ | Please sell ______ shares from my Option shares through a broker in full/partial payment of the purchase price. |
I understand that after this exercise, ____________ shares of Common Stock remain subject to the Option, subject to all terms and provisions set forth in the Agreement and the Plan.
I hereby represent that it is my intention to acquire these shares for the following purpose:
| ¨ | investment |
| ¨ | resale or distribution |
Please note: if your intention is to resell (or distribute within the meaning of Section 2(11) of the Securities Act of 1933) the shares you acquire through this Option exercise, the Company or transfer agent may require an opinion of counsel that such resale or distribution would not violate the Securities Act of 1933 prior to your exercise of such Option.
| Date: | _________________, ________. | |||||
| Participant’s signature |
| * | If I elect to exercise by exchanging shares I already own, I will constructively return shares that I already own to purchase the new option shares. If my shares are in certificate form, I must attach a separate statement indicating the certificate number of the shares I am treating as having exchanged. If the shares are held in “street name” by a registered broker, I must provide the Company with a notarized statement attesting to the number of shares owned that will be treated as having been exchanged. I will keep the shares that I already own and treat them as if they are shares acquired by the option exercise. In addition, I will receive additional shares equal to the difference between the shares I constructively exchange and the total new option shares that I acquire. |
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EXHIBIT B
ACKNOWLEDGMENT OF RECEIPT OF SHARES
I hereby acknowledge the delivery to me by Territorial Bancorp Inc. (the “Company”) or its affiliate on _____________________________, of stock certificates for ____________________ shares of common stock of the Company purchased by me pursuant to the terms and conditions of the Stock Option Agreement and the Territorial Bancorp Inc. 2010 Equity Incentive Plan, as applicable, which shares were transferred to me on the Company’s stock record books on ____________________.
| Date: | ||||||
| Participant’s signature |
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EXHIBIT TO FORM OF STOCK OPTION AGREEMENT
On August 19, 2010, the Compensation Committee awarded the following stock options to our named executive officers: Mr. Kitagawa was granted an option to acquire 205,979 shares; Mr. Miyamoto was granted an option to acquire 19,524 shares; Mr. Hirata was granted an option to acquire 153,930 shares; Mr. Nakatsuka was granted an option to acquire 146,430 shares; and Mr. Lau was granted an option to acquire 19,524 shares. The exercise price for all of the options is $17.36, which was the closing price of Territorial Bancorp Inc. stock on the grant date. All options expire on August 19, 2020.
The awards vest as follows:
|
Date |
Vested Portion of Award | |
|
August 19, 2010 |
0/6 | |
|
August 19, 2011 |
1/6 | |
|
August 19, 2012 |
2/6 | |
|
August 19, 2013 |
3/6 | |
|
August 19, 2014 |
4/6 | |
|
August 19, 2015 |
5/6 | |
|
August 19, 2016 |
6/6 |
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Exhibit 10.23
OUTSIDE DIRECTOR
R ESTRICTED S TOCK A WARD
Granted by
TERRITORIAL BANCORP INC.
under the
TERRITORIAL BANCORP INC.
2010 EQUITY INCENTIVE PLAN
This restricted stock agreement (“ Restricted Stock Award ” or “ Agreement ”) is and shall be subject in every respect to the provisions of the 2010 Equity Incentive Plan (the “ Plan ”) of Territorial Bancorp Inc. (the “ Company ”) which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement. A copy of the Plan has been provided to each person granted a Restricted Stock Award pursuant to the Plan. The holder of this Restricted Stock Award (the “ Participant ”) hereby accepts this Restricted Stock Award, subject to all the terms and provisions of the Plan and this Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Committee appointed to administer the Plan (“ Committee ”) or the Board shall be final, binding and conclusive upon the Participant and the Participant’s heirs, legal representatives, successors and permitted assigns. Except where the context otherwise requires, the term “Company” shall include the parent and all present and future subsidiaries of the Company as defined in Section 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the “ Code ”). Capitalized terms used herein but not defined shall have the same meaning as in the Plan.
| 1. | Name of Participant : |
| 2. | Date of Grant : |
| 3. | Total number of shares of Company common stock covered by the Restricted Stock Award: |
(subject to adjustment pursuant to Section 9 below).
| 4. | Vesting Schedule . Except as otherwise provided in this Agreement, this Restricted Stock Award becomes earned in accordance with the vesting schedule set forth below. |
|
Date |
Vested Portion of Award |
| 5. | Grant of Restricted Stock Award. |
The Restricted Stock Award shall be in the form of issued and outstanding shares of Stock that shall be registered in the name of the Participant and held by the Company, together with a stock power executed by the Participant in favor of the Company (if the Company so requests), pending the satisfaction of the conditions to which the Restricted Stock Award is subject.
The shares of common stock awarded under this Restricted Stock Award may be issued in certificate form or in electronic form, in the discretion of the Company. If the shares are certificated, the Participant shall receive a certificate or certificates representing the shares of Restricted Stock that have been awarded to him. The certificates evidencing the Restricted Stock Award shall bear a legend restricting the transferability of the Restricted Stock. The Restricted Stock awarded to the Participant shall not be sold, encumbered hypothecated or otherwise transferred except in accordance with the terms of the Agreement, until such Restricted Stock has vested.
| 6. | Voting and Dividends . |
The Participant shall have the right to vote the shares of Restricted Stock awarded hereunder. Any dividends or distributions declared and paid with respect to shares of Stock subject to the Restricted Stock Award, other than a stock dividend consisting of shares of Stock, will be distributed to the Participant.
| 7. | Delivery of Shares and Share Holding Requirement . |
Delivery of shares of Stock under this Restricted Stock Award shall be subject to the following:
| (i) | Delivery of shares of Stock shall comply with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities exchange or similar entity. |
| (ii) | The issuance of shares of Stock pursuant to this Restricted Stock Award may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
| (iii) | 50% of the total number of vested Net Shares (as defined below) must be held by the Participant until termination of service with the Company or the Bank (which includes performing any services for the Company or the Bank as a consultant). “Net Shares” means the number of shares left in the Award after the required number of shares have been sold to pay taxes owed on the Award (for example, if the Award was for 100 shares and 50 shares are sold to pay taxes on the Award, such that the Participant is left with 50 Net Shares, 25 of those Net Shares would be subject to this holding requirement, such that the Participant may not sell those 25 shares until termination of service, which may be before Retirement). |
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| 8. | Change in Control. |
| (i) | In the event of a Change in Control, all Restricted Stock Awards held by the Participant shall become fully vested, whether or not the Participant has a Termination of Service (other than for Cause). |
| (ii) | A “ Change in Control ” shall be deemed to have occurred as provided in Section 4.2 of the Plan. |
| 9. | Adjustment Provisions. |
This Restricted Stock Award, including the number of shares subject to the Restricted Stock Award, shall be adjusted upon the occurrence of the events specified in, and in accordance with the provisions of, Section 3.4 of the Plan.
| 10. | Effect of Termination of Service on Restricted Stock Award. |
This Restricted Stock Award shall vest as follows under the stated circumstances:
| (i) | Death . This Restricted Stock Award shall vest immediately in the event of the Participant’s Termination of Service by reason of the Participant’s death. |
| (ii) | Disability . This Restricted Stock Award shall vest immediately in the event of the Participant’s Termination of Service by reason of Disability. Except to the extent prohibited by Code Section 409A, the Committee shall have sole authority and discretion to determine whether the Participant’s Service has been terminated by reason of Disability. |
| (iii) | Retirement. If the Participant’s Service terminates by reason of the Participant’s Retirement, the Participant’s unvested Restricted Stock Awards shall continue to vest in accordance with the schedule set forth above, provided that, at the request of the Company the Participant serves as a consultant, director emeritus or advisory director to the Company following Retirement. For purposes of this Award, Retirement means retirement from service as a Director on or after attainment of age 72. A Director will be deemed to have terminated due to Retirement only if the Director has terminated service on the Boards of the Company and any subsidiary or affiliate in accordance with applicable Company policy, following provision of written notice to the Company of intent to retire. |
| (iv) | Termination for Cause . If the Participant’s Service has been terminated for Cause, this Restricted Stock Award shall immediately terminate and be of no further force and effect. The Board of Directors shall have sole authority and discretion to determine whether the Participant’s Service has been terminated for Cause. |
| (v) | Other Termination . If the Participant’s Service terminates for any reason other than death, Disability, Retirement or for Cause, all shares of Restricted Stock awarded to the Participant which have not vested shall be forfeited by such Participant. |
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| 11. | Miscellaneous. |
| (i) | No Restricted Stock Award shall confer upon the Participant any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights. |
| (ii) | This Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Participant. |
| (iii) | Restricted Stock Awards are not transferable prior to the time such Awards vest in the Participant. |
| (iv) | This Restricted Stock Award is subject to all laws, regulations and orders of any governmental authority which may be applicable thereto and, notwithstanding any of the provisions hereof, the Company will not be obligated to issue any shares of stock hereunder if the issuance of such shares would constitute a violation of any such law, regulation or order or any provision thereof. |
[Signature Page Follows]
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IN WITNESS WHEREOF , the Company has caused this instrument to be executed in its name and on its behalf as of the date of grant of this Restricted Stock Award set forth above.
| TERRITORIAL BANCORP INC. | ||
| By: | ||
PARTICIPANT’S ACCEPTANCE
The undersigned hereby accepts the foregoing Restricted Stock Award and agrees to the terms and conditions hereof, including the terms and provisions of the 2010 Equity Incentive Plan. The undersigned hereby acknowledges receipt of a copy of the Company’s 2010 Equity Incentive Plan.
| P ARTICIPANT |
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EXHIBIT A
ACKNOWLEDGMENT OF RECEIPT OF EARNED SHARES
I hereby acknowledge the delivery to me by Territorial Bancorp Inc. (the “Company”) or its affiliate on , of stock certificates for shares of common stock of the Company earned by me pursuant to the terms and conditions of the Restricted Stock Agreement and the Territorial Bancorp Inc. 2010 Equity Incentive Plan, which shares were transferred to me on the Company’s stock record books on .
| Date: | ||||||||
| Participant’s signature |
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EXHIBIT TO FORM OF RESTRICTED STOCK AGREEMENT
On August 19, 2010, the Compensation Committee awarded each of our outside directors 19,524 shares of restricted stock.
The awards vest as follows:
|
Date |
Vested Portion of Award |
|
|
August 19, 2010 |
0/6 | |
|
August 19, 2011 |
1/6 | |
|
August 19, 2012 |
2/6 | |
|
August 19, 2013 |
3/6 | |
|
August 19, 2014 |
4/6 | |
|
August 19, 2015 |
5/6 | |
|
August 19, 2016 |
6/6 |
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Exhibit 10.24
OUTSIDE DIRECTOR
S TOCK O PTION
Granted by
TERRITORIAL BANCORP INC.
under the
TERRITORIAL BANCORP INC.
2010 EQUITY INCENTIVE PLAN
This stock option agreement (“ Option ” or “ Agreement ”) is and shall be subject in every respect to the provisions of the 2010 Equity Incentive Plan (the “ Plan ”) of Territorial Bancorp Inc. (the “ Company ”) which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement. A copy of the Plan has been provided to each person granted a stock option pursuant to the Plan. The holder of this Option (the “ Participant ”) hereby accepts this Option, subject to all the terms and provisions of the Plan and this Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Committee appointed to administer the Plan (“ Committee ”) or the Board shall be final, binding and conclusive upon the Participant and the Participant’s heirs, legal representatives, successors and permitted assigns. Except where the context otherwise requires, the term “Company” shall include the parent and all present and future subsidiaries of the Company as defined in Section 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the “ Code ”). Capitalized terms used herein but not defined shall have the same meaning as in the Plan.
| 1. | Name of Participant : |
| 2. | Date of Grant: |
| 3. | Total number of shares of Company common stock that may be acquired pursuant to this Option : |
(subject to adjustment pursuant to Section 10 below).
| • |
This is a Non-Qualified Option. |
| 4. | Exercise price per share: |
| (subject to adjustment pursuant to Section 10 below) |
| 5. | Expiration Date of Option: |
| 6. | Vesting Schedule . Except as otherwise provided in this Agreement, this Option first becomes exercisable in accordance with the vesting schedule set forth below. This Option may not be exercised on or after the Option’s expiration date. |
| 7. | Exercise Procedure . |
This Option shall be exercised in whole or in part by the Participant’s delivery to the Company of written notice (the “ Notice of Exercise of Option ” attached hereto as Exhibit A) setting forth the number of shares with respect to which this Option is to be exercised, together with payment by cash or other means acceptable to the Committee, including:
| (i) | by tendering, either actually or by attestation, shares of Stock valued at Fair Market Value as of the day of exercise; |
| (ii) | by irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise; |
| (iii) | by personal, certified or cashier’s check, or |
| (iv) | by other property deemed acceptable by the Committee; or |
| (v) | by any combination thereof. |
| 8. | Delivery of Shares and Share Holding Requirement. |
Delivery of shares of Stock upon the exercise of this Option shall be subject to the following:
| (i) | Delivery of shares of Stock shall comply with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities exchange or similar entity. |
| (ii) | The issuance of shares of Stock pursuant to the exercise of this Option may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
| (iii) | 50% of the total number of vested Net Shares (as defined below) must be held by the Participant until termination of service with the Company or the Bank (which includes performing any services for the Company or the Bank as a consultant, director emeritus or advisory director). “Net Shares” means the number of shares left in the Award after the required number of shares have been sold to pay taxes owed on the Award (for example, if the Award was for 100 shares and 50 shares are sold to pay taxes on the Award, such that the Grantee is left with 50 Net Shares, 25 of those Net Shares would be subject to this holding requirement, such that the Grantee may not sell those 25 shares until termination of service, which may be before Retirement). |
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| 9. | Change in Control. |
| (i) | In the event of a Change in Control, all Options held by the Participant shall become fully vested and exercisable, subject to the expiration provisions otherwise applicable to the Option, whether or not the Participant has a Termination of Service other than for Cause. |
| (ii) | A “ Change in Control ” shall be deemed to have occurred as provided in Section 4.2 of the Plan. |
| 10. | Adjustment Provisions. |
This Option, including the number of shares subject to the Option and the exercise price, shall be adjusted upon the occurrence of the events specified in, and in accordance with the provisions of, Section 3.4 of the Plan.
| 11. | Termination of Option and Accelerated Vesting . |
This Option shall terminate upon the Option’s expiration date, or earlier as follows:
| (i) | Death . This Option shall vest and become exercisable in full in the event of the Participant’s Termination of Service by reason of the Participant’s death while this Option is unexercised. This Option may thereafter be exercised by the legal representative or legatee of the Participant for a period of one year from the date of death, subject to termination on the expiration date of this Option, if earlier. |
| (ii) | Disability . This Option shall vest and become exercisable in full in the event of the Participant’s Termination of Service by reason of Disability while this Option is unexercised. This Option may thereafter be exercised for a period of one year from the date of such Termination of Service by reason of Disability, subject to termination on the Option’s expiration date, if earlier. Except to the extent prohibited by Code Section 409A, the Committee shall have sole authority and discretion to determine whether the Participant’s Service has been terminated by reason of Disability. |
| (iii) |
Retirement. If the Participant’s Service terminates by reason of the Participant’s Retirement, the Participant’s vested Options shall remain exercisable for the duration of the term set forth in the Award Agreement and the Participant’s unvested Options shall continue to vest in accordance with the schedule set forth above, provided that, at the request of the Company the Participant serves as a consultant, director emeritus or advisory director to the Company following Retirement. For purposes of |
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|
this Award, Retirement shall mean Termination of Service as a Director on or after attaining age 72. A non-Employee Director who terminates Service as a director but who continues to serve as a consultant, director emeritus or advisory director shall not be deemed to have terminated Service due to Retirement until both Service as a Director and Service as a consultant, director emeritus or advisory director have terminated. |
| (iv) | Termination for Cause . If the Participant’s Service has been terminated for Cause, this Option shall immediately terminate and be of no further force and effect. The Board of Directors shall have sole authority and discretion to determine whether the Participant’s Service has been terminated for Cause. |
| (v) | Other Termination . If the Participant’s Service terminates for any reason other than death, Disability, Retirement or for Cause, this Option may thereafter be exercised, to the extent it was exercisable at the time of such termination, for a period of three months following termination, subject to termination on the Option’s expiration date, if earlier. |
| 12. | Miscellaneous. |
| (i) | No Option shall confer upon the Participant any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights. |
| (ii) | This Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Participant. |
| (iii) | Except as otherwise provided by the Committee, Options under the Plan are not transferable other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order. The Committee shall have the discretion to permit the transfer of Options under the Plan; provided, however, that such transfers shall be limited to Immediate Family Members of Participants, trusts and partnerships established for the primary benefit of such Immediate Family Members or to charitable organizations, and, provided, further, that such transfers are not made for consideration to the Participant. |
| (iv) | This Option is subject to all laws, regulations and orders of any governmental authority which may be applicable thereto and, notwithstanding any of the provisions hereof, the Participant agrees that he will not exercise the Option granted hereby nor will the Company be obligated to issue any shares of stock hereunder if the exercise thereof or the issuance of such shares, as the case may be, would constitute a violation by the Participant or the Company of any such law, regulation or order or any provision thereof. |
| (v) | The granting of this Option does not confer upon the Participant any right to be retained in the Service of the Company or any subsidiary. |
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[Signature Page Follows]
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IN WITNESS WHEREOF , the Company has caused this instrument to be executed in its name and on its behalf as of the date of grant of this Option set forth above.
| TERRITORIAL BANCORP INC. | ||
| By: | ||
PARTICIPANT’S ACCEPTANCE
The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions hereof, including the terms and provisions of the 2010 Equity Incentive Plan. The undersigned hereby acknowledges receipt of a copy of the Company’s 2010 Equity Incentive Plan.
| P ARTICIPANT | ||
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EXHIBIT A
NOTICE OF EXERCISE OF OPTION
(BY OUTSIDE DIRECTORS)
I hereby exercise the stock option (the “Option”) granted to me by Territorial Bancorp Inc. (the “Company”) or its affiliate, subject to all the terms and provisions set forth in the Stock Option Agreement (the “Agreement”) and the Territorial Bancorp Inc. 2010 Equity Incentive Plan (the “Plan”) referred to therein, and notify you of my desire to purchase shares of common stock of the Company (“Common Stock”) for a purchase price of $ per share.
Enclosed please find (check one):
| ¨ | Cash, personal, certified or cashier’s check in the sum of $ , in full/partial payment of the purchase price. |
| ¨ | Stock of the Company with a fair market value of $ in full/partial payment of the purchase price.* |
| ¨ | My check in the sum of $ and stock of the Company with a fair market value of $ , in full/partial payment of the purchase price.* |
| ¨ | Please sell shares from my Option shares through a broker in full/partial payment of the purchase price. |
I understand that after this exercise, shares of Common Stock remain subject to the Option, subject to all terms and provisions set forth in the Agreement and the Plan.
I hereby represent that it is my intention to acquire these shares for the following purpose:
| ¨ | investment |
| ¨ | resale or distribution |
Please note: if your intention is to resell (or distribute within the meaning of Section 2(11) of the Securities Act of 1933) the shares you acquire through this Option exercise, the Company or transfer agent may require an opinion of counsel that such resale or distribution would not violate the Securities Act of 1933 prior to your exercise of such Option.
| ______________________. | ||||
| Date | Participant’s signature |
| * | If I elect to exercise by exchanging shares I already own, I will constructively return shares that I already own to purchase the new option shares. If my shares are in certificate form, I must attach a separate statement indicating the certificate number of the shares I am treating as having exchanged. If the shares are held in “street name” by a registered broker, I must provide the Company with a notarized statement attesting to the number of shares owned that will be treated as having been exchanged. I will keep the shares that I already own and treat them as if they are shares acquired by the option exercise. In addition, I will receive additional shares equal to the difference between the shares I constructively exchange and the total new option shares that I acquire. |
7
EXHIBIT B
ACKNOWLEDGMENT OF RECEIPT OF SHARES
I hereby acknowledge the delivery to me by Territorial Bancorp Inc. (the “Company”) or its affiliate on , of stock certificates for shares of common stock of the Company purchased by me pursuant to the terms and conditions of the Stock Option Agreement and the Territorial Bancorp Inc. 2010 Equity Incentive Plan, as applicable, which shares were transferred to me on the Company’s stock record books on .
| Date: | ||||||
| Participant’s signature |
8
EXHIBIT TO FORM OF STOCK OPTION AGREEMENT
On August 19, 2010, the Compensation Committee awarded the 41,275 stock options to each of our outside directors. The exercise price for all of the options is $17.36, which was the closing price of Territorial Bancorp Inc. stock on the grant date. All options expire on August 19, 2020.
The awards vest as follows:
|
Date |
Vested Portion of Award |
|
|
August 19, 2010 |
0/6 | |
|
August 19, 2011 |
1/6 | |
|
August 19, 2012 |
2/6 | |
|
August 19, 2013 |
3/6 | |
|
August 19, 2014 |
4/6 | |
|
August 19, 2015 |
5/6 | |
|
August 19, 2016 |
6/6 |
9
Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Allan S. Kitagawa, certify that:
1) I have reviewed this Annual Report on Form 10-K/A of Territorial Bancorp Inc.;
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 24, 2011
| /s/ Allan S. Kitagawa |
| Allan S. Kitagawa |
|
Chairman of the Board, President and Chief Executive Officer |
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Melvin M. Miyamoto, certify that:
1) I have reviewed this Annual Report on Form 10-K/A of Territorial Bancorp Inc.;
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 24, 2011
| /s/ Melvin M. Miyamoto |
| Melvin M. Miyamoto |
| Senior Vice President and Treasurer |
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Territorial Bancorp Inc. (the “Company”) on Form 10-K/A for the year ended December 31, 2010 as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Allan S. Kitagawa, Chairman of the Board, President and Chief Executive Officer of the Company, and Melvin M. Miyamoto, Senior Vice President and Treasurer, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Allan S. Kitagawa | Date: March 24, 2011 | |||
| Allan S. Kitagawa | ||||
| Chairman of the Board, President and Chief Executive Officer | ||||
| /s/ Melvin M. Miyamoto | Date: March 24, 2011 | |||
| Melvin M. Miyamoto | ||||
| Senior Vice President and Treasurer | ||||
A signed original of this written statement required by Section 906 has been provided to Territorial Bancorp Inc. and will be retained by Territorial Bancorp Inc. and furnished to the Securities and Exchange Commission or its staff upon request.