FORM OF TWO-YEAR CHANGE IN CONTROL AGREEMENT
Exhibit
10.7.9
FORM
OF TWO-YEAR CHANGE IN CONTROL AGREEMENT
THIS
CHANGE IN CONTROL AGREEMENT was originally made and entered into as of
_______________ and is hereby amended and restated as of January 3, 2006, by
and
between NewAlliance Bank, a Connecticut savings bank (the “Bank” or the
“Employer”), and ______________(the “Executive”).
WITNESSETH
WHEREAS,
the Bank has converted from the mutual to the stock form of organization (the
“Conversion”) and has concurrently become a wholly owned subsidiary of
NewAlliance Bancshares, Inc., a business corporation organized under the laws
of
the State of Delaware (the “Company”);
WHEREAS,
the Executive is currently employed as a ____________________________ of the
Bank;
WHEREAS,
the Company and the Bank desire to be ensured of the Executive's continued
active participation in the business of the Bank; and
WHEREAS,
in order to induce the Executive to remain in the employ of the Bank and in
consideration of the Executive's agreeing to remain in the employ of the Bank,
the parties desire to specify the severance benefits which shall be due the
Executive in the event that his employment with the Bank is terminated under
specified circumstances;
NOW
THEREFORE, in consideration of the mutual agreements herein contained, and
upon
the other terms and conditions hereinafter provided, the parties hereby agree
as
follows:
1.
Definitions.
The
following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
(a)
Annual
Compensation.
The
Executive's “Annual Compensation” for purposes of this Agreement shall be deemed
to mean the sum of (i) the Executive's base salary in effect as of the Date
of
Termination of his employment and (ii) the highest level of cash incentive
compensation earned by the Executive from the Bank or any subsidiary thereof
in
any one of the three calendar years immediately preceding the year in which
the
termination occurs; provided,
however,
for
purposes of clause (ii) bonuses earned under the Bank’s Performance Unit Plan
will not be included in cash incentive compensation for purposes of determining
average cash incentive compensation.
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(b)
Cause.
Termination of the Executive's employment for “Cause” shall mean termination
because of personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. For purposes
of
this paragraph, no act or failure to act on the Executive's part shall be
considered “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's action or omission
was in the best interests of the Employers.
(c)
Change
in Control.“Change
in Control” shall mean a change in the ownership of the Company, a change in the
effective control of the Company or a change in the ownership of a substantial
portion of the assets of the Company as provided under Section 409A of the
Code,
as amended from time to time, and any Internal Revenue Service guidance,
including Notice 2005-1, and regulations issued in connection with Section
409A
of the Code. In no event, however, shall a Change in Control be deemed to have
occurred as a result of any acquisition of securities or assets of the Company,
the Bank, or a subsidiary of either of them, by the Company, the Bank, or any
subsidiary of either of them, or by any employee benefit plan maintained by
any
of them.
(d)
Code.“Code”
shall mean the Internal Revenue Code of 1986, as amended.
(e)
Date
of Termination.“Date
of
Termination” shall mean (i) if the Executive's employment is terminated for
Cause, the date on which the Notice of Termination is given, and (ii) if the
Executive's employment is terminated for any other reason, the date specified
in
the Notice of Termination.
(f)
Disability.
Termination by the Employer of the Executive's employment based on “Disability”
shall mean the Executive: (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected
to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Employer.
(g)
Good
Reason.
Termination by the Executive of the Executive's employment for “Good Reason”
shall mean termination by the Executive following a Change in Control based
on:
(i)
Without the
Executive's express written consent, the assignment by the Employer to the
Executive of any duties which are materially inconsistent with the Executive's
positions, duties, responsibilities and status with the Employer immediately
prior to a Change in Control, or a material change in the Executive's reporting
responsibilities, titles or offices as an employee and as in effect immediately
prior to such a Change in Control, or any removal of the Executive from or
any
failure to re-elect the Executive to any of such responsibilities, titles or
offices, except in connection with the termination of the Executive's employment
for Cause, Disability or Retirement or as a result of the Executive's death
or
by the Executive other than for Good Reason;
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(ii)
Without the
Executive's express written consent, a reduction by the Employer in the
Executive's base salary as in effect immediately prior to the date of the Change
in Control or as the same may be increased from time to time thereafter or
a
reduction in the package of fringe benefits provided to the
Executive;
(iii)
A Board
approved change in the Executive's principal place of employment by a distance
in excess of 50 miles from its location immediately prior to the Change in
Control;
(iv)
Any purported
termination of the Executive's employment for Disability or Retirement which
is
not effected pursuant to a Notice of Termination satisfying the requirements
of
paragraph (i) below; or
(v)
The failure by
the Employer to obtain the assumption of and agreement to perform this Agreement
by any successor as contemplated in Section 10 hereof.
(h)
IRS.
IRS
shall mean the Internal Revenue Service.
(i)
Notice
of Termination.
Any
purported termination of the Executive's employment by the Employer for any
reason, including without limitation for Cause, Disability or Retirement, or
by
the Executive for any reason, including without limitation for Good Reason,
shall be communicated by written “Notice of Termination” to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a
dated notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, (iii) specifies a Date of
Termination, which shall be not less than thirty (30) nor more than ninety
(90)
days after such Notice of Termination is given, except in the case of the
Employer’s termination of the Executive's employment for Cause, which shall be
effective immediately; and (iv) is given in the manner specified in Section
11
hereof.
(j)
Retirement.“Retirement”
shall mean voluntary termination by the Executive in accordance with the
Employer’s retirement policies, including early retirement, generally applicable
to their salaried employees.
2.
Term of
Agreement.
The term
of this Agreement shall be for two years, commencing on the date of this
Agreement (the “Effective Date”). Prior to the first annual anniversary of the
date first above written and each annual anniversary thereafter, the Board
of
Directors of the Bank shall consider and review (after taking into account
all
relevant factors, including the Executive's performance) a one-year extension
of
the term of this Agreement, and the term shall continue to extend each year
(beginning with the first annual anniversary date) if the Board of Directors
so
approves such extension unless the Executive gives written notice to the
Employer of the Executive's election not to extend the term, with such notice
to
be given not less than ninety (90) days prior to any such anniversary date.
If
the Board of Directors elects not to extend the term, it shall give written
notice of such decision to the Executive not less than ninety (90) days prior
to
any such anniversary date. Upon termination of the Executive's employment with
the Employer for any reason whatsoever, any annual extensions provided pursuant
to this Section 2, if not theretofore discontinued, shall automatically cease.
Furthermore, nothing in this Agreement shall be deemed to prohibit the Employer
at any time from terminating the Executive's employment during the term of
this
Agreement with or without notice for any reason, subject, however, to such
rights and obligations of the Employer and the Executive in the event of any
such termination as may be provided for under this Agreement. In addition,
no
annual renewals shall extend beyond the Executive's 65th
birthday, and in no event shall the term of this Agreement extend beyond the
Executive's 65th
birthday.
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3.
Benefits
Upon Termination.
If the
Executive's employment by the Employer shall be terminated subsequent to a
Change in Control and during the term of this Agreement by (i) the Employer
for
other than Cause, Disability, Retirement or the Executive's death or (ii) the
Executive for Good Reason, then the Employer shall
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(a)
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pay
to the Executive in a lump sum as of the Date of
Termination:
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(i)
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a
cash severance amount equal to two (2) times the Executive's Annual
Compensation; and
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(ii)
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an
amount equal to the pro rata portion of any target bonus awarded
to the
Executive under the Bank's Executive Incentive Plan (or such other
short-term incentive compensation plan(s) that the Employer may adopt
subsequent to the date hereof as a replacement therefor) which relates
to
the calendar year in which such termination occurs; provided
that,
such pro rata portion will be calculated by multiplying the amount
of the
target bonus by a fraction the numerator of which is the number of
days
elapsed in the calendar year as of the Date of Termination and the
denominator is 365; and
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(b)
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maintain
and provide for a period ending the earlier of (i) the expiration
of the
remaining term of this Agreement as of the Date of Termination or
(ii) the
date of the Executive's full-time employment by another employer
(provided
that the Executive is entitled under the terms of such employment
to
benefits substantially similar to those described in this subparagraph
(b)), at no greater cost to the Executive than he is paying as of
the Date
of Termination, the Executive's continued participation in all group
insurance, life insurance, health and accident insurance, disability
insurance and other similar types of employee benefit plans, programs
and
arrangements offered by the Employer in which the Executive was entitled
to participate immediately prior to the Date of Termination (excluding
other types of benefits, plans or arrangements including (w) the
Company's
Employee Stock Ownership Plan, (y) stock benefit plans of the Company
or
the Bank and (z) cash incentive compensation included in Annual
Compensation), except as set forth below. In the event that the Employer
is unable to provide the benefits set forth in this subparagraph
(b) due
to the change in Executive's status to that of a non-employee, the
Employer shall include in the lump sum payment due pursuant to the
terms
of Section 3(a) the value of the benefits required to be provided
by this
subparagraph (b). In addition, if the provision of any of the benefits
covered by this Section 3(b) would trigger the 20% excise tax and
interest
penalties under Section 409A of the Code, then the benefit(s) that
would
trigger such tax and interest penalties shall not be provided (the
“Excluded Benefits”), and in lieu of the Excluded Benefits the Employer
shall pay to the Executive, in a lump sum within 30 days following
termination of employment or within 30 days after such determination
should it occur after termination of employment, a cash amount equal
to
the cost to the Employer of providing the Excluded
Benefits;
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4.
Limitation
of Benefits under Certain Circumstances.
If the
payments and benefits pursuant to Section 3 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Employer, would constitute a “parachute payment” under Section 280G of
the Code, the payments and benefits payable by the Employer pursuant to Section
3 hereof shall be reduced by the amount, if any, which is the minimum necessary
to result in no portion of the payments and benefits payable by the Employer
under Section 3 being non-deductible to the Employer pursuant to Section 280G
of
the Code and subject to the excise tax imposed under Section 4999 of the Code.
If the payments and benefits are required to be reduced, the cash severance
shall be reduced first, followed by a reduction in the fringe benefits to be
provided in kind. The determination of any reduction in the payments and
benefits to be made pursuant to Section 3 shall be based upon the opinion of
independent counsel selected by the Employer’s independent public accountants
and paid by the Employer. Such counsel shall be reasonably acceptable to the
Employer and the Executive; shall promptly prepare the foregoing opinion, but
in
no event later than thirty (30) days from the Date of Termination; and may
use
such actuaries as such counsel deems necessary or advisable for the purpose.
Nothing contained herein shall result in a reduction of any payments or benefits
to which the Executive may be entitled upon termination of employment under
any
circumstances other than as specified in this Section 4, or a reduction in
the
payments and benefits specified in Section 3 below zero.
5.
Mitigation; Exclusivity of Benefits.
(a)
The
Executive shall not be required to mitigate the amount of any benefits hereunder
by seeking other employment or otherwise. The amount of severance to be provided
pursuant to Sections 3(a) and 3(b) hereof shall not be reduced by any
compensation earned by or benefits provided to the Executive as a result of
employment by another employer after the Date of Termination or
otherwise.
(b)
The
specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of
employment with the Employer pursuant to employee benefit plans of the Employer
or otherwise.
6.
Withholding.
All
payments required to be made by the Employer hereunder to the Executive shall
be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Employer may reasonably determine should be withheld
pursuant to any applicable law or regulation.
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7.
Nature of
Employment and Obligations.
(a)
Nothing
contained herein shall be deemed to create other than a terminable at will
employment relationship between the Employer and the Executive, and the Employer
may terminate the Executive's employment at any time, subject to providing
any
payments specified herein in accordance with the terms hereof.
(b)
Nothing
contained herein shall create or require the Employer to create a trust of
any
kind to fund any benefits which may be payable hereunder, and to the extent
that
the Executive acquires a right to receive benefits from the Employer hereunder,
such right shall be no greater than the right of any unsecured general creditor
of the Employer.
8.
Source of
Payments.
It is
intended by the parties hereto that all payments provided in this Agreement
shall be paid in cash or check from the general funds of the Bank.
9.
No
Attachment.
(a)
Except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation, or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.
(b)
This
Agreement shall be binding upon, and inure to the benefit of, the Executive,
the
Bank and their respective successors and assigns.
10.
Assignability.
The
Employer may assign this Agreement and its rights and obligations hereunder
in
whole, but not in part, to any corporation, bank or other entity with or into
which the Employer may hereafter merge or consolidate or to which the Employer
may transfer all or substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employer hereunder as fully as if it
had
been originally made a party hereto, but may not otherwise assign this Agreement
or their rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.
11.
Notice.
For the
purposes of this Agreement, notices and all other communications provided for
in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below:
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To
the Bank:
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Secretary
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NewAlliance
Bank
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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To
the Executive:
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______________________
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At
the address last appearing
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on
the personnel records of
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the
Employer
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12.
Amendment; Waiver.
No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer or officers as may be specifically designated by
the
Board of Directors of the Employer to sign on its behalf;
provided,
however, that if the Employer determines, after a review of the final
regulations issued under Section 409A of the Code and all applicable Internal
Revenue Service guidance, that this Agreement should be further amended to
avoid
triggering the tax and interest penalties imposed by Section 409A of the Code,
the Employer may amend this Agreement to the extent necessary to avoid
triggering the tax and interest penalties imposed by Section 409A of the Code.
No waiver by either party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this Agreement
to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
13.
Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the United States where applicable and otherwise
by
the substantive laws of the State of Connecticut.
14.
Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
15.
Validity.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
16.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
17.
Regulatory Provisions.
(a)
The
Employer may terminate the Executive's employment at any time, but any
termination by the Employers, other than termination for Cause, shall not
prejudice the Executive's right to compensation or other benefits under this
Agreement. The Executive shall not have the right to receive compensation or
other benefits for any period after termination for Cause as defined in Section
1(b) hereof.
(b)
Notwithstanding any other provision of this Agreement to the contrary, any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act (12 U.S.C. §1828(k)) and the regulations
promulgated thereunder, including 12 C.F.R. Part 359.
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18.
Solicitation.
The
Executive
hereby covenants and agrees that, for a period of one year following his
termination of employment with the Employer for any reason, he shall not,
without the written consent of the Employer, either directly or
indirectly:
(a)
solicit,
offer employment to, or take any other action intended, or that a reasonable
person acting in like circumstances would expect, to have the effect of causing
any officer or employee of the Employer or any of its subsidiaries or affiliates
to terminate his or her employment and accept employment or become affiliated
with, or provide services for compensation in any capacity whatsoever to, any
savings bank, savings and loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged in the business of
accepting deposits, making loans or doing business within any county in which
the Company or the Bank maintains an office as of the date of termination of
the
Executive's employment;
(b)
provide
any information, advice or recommendation with respect to any such officer
or
employee to any savings bank, savings and loan association, bank, bank holding
company, savings and loan holding company, or other institution engaged in
the
business of accepting deposits, making loans or doing business within any county
in which the Company or the Bank maintains an office as of the date of
termination of the Executive's employment, that is intended, or that a
reasonable person acting in like circumstances would expect, to have the effect
of causing any officer or employee of the Employer or any of its subsidiaries
or
affiliates to terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any savings bank, savings and loan association, bank, bank holding company,
savings and loan holding company, or other institution engaged in the business
of accepting deposits, making loans or doing business within any county in
which
the Company or the Bank maintains an office as of the date of termination of
the
Executive's employment; or
(c)
solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any customer of the Company or the Bank to
terminate an existing business or commercial relationship with the Company
or
the Bank.
19.
Arbitration.
Any
dispute, controversy or claim arising out of or relating to this Agreement
or
the breach thereof, shall be submitted to and finally settled by arbitration
in
accordance with the Commercial Arbitration Rules (the “Rules”) of the American
Arbitration Association (the “AAA”) then in effect before a panel of three
arbitrators selected by the Bank. Arbitration shall occur in New Haven,
Connecticut or such other location as may be mutually agreed to by the
parties.
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The
award
made by all or a majority of the panel of arbitrators shall be final and
binding, and judgment may be entered based upon such award in any court of
law
having competent jurisdiction. The award is subject to confirmation,
modification, correction or vacation only as explicitly provided in Title 9
of
the United States Code. The prevailing party shall be entitled to receive any
award of pre- and post-award interest as well as attorney’s fees incurred in
connection with the arbitration and any judicial proceedings related thereto.
The parties acknowledge that this Agreement evidences a transaction involving
interstate commerce. The United States Arbitration Act and the Rules shall
govern the interpretation, enforcement, and proceedings pursuant to this
Section. Any provisional remedy which would be available from a court of law
shall be available from the arbitrators to the parties to this Agreement pending
arbitration. Either party may make an application to the arbitrators seeking
injunctive relief to maintain the status quo, or may seek from a court of
competent jurisdiction any interim or provisional relief that may be necessary
to protect the rights and property of that party, until such times as the
arbitration award is rendered or the controversy otherwise
resolved.
20.
Payment
of Costs and Legal Fees.
All
reasonable costs and legal fees paid or incurred by the Executive pursuant
to
any dispute or question of interpretation relating to this Agreement shall
be
paid or reimbursed by the Bank if the Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.
21.
Entire
Agreement.
This
Agreement embodies the entire agreement between the Employer and the Executive
with respect to the matters agreed to herein. All prior agreements between
the
Employer and the Executive, if any, with respect to the matters agreed to herein
are hereby superseded and shall have no force or effect, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this
Agreement.
IN
WITNESS
WHEREOF, the Bank has caused this Agreement to be executed by its duly
authorized officers and the Executive has hereunto set his hand, all as of
the
date of the restatement of this Agreement.
THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE
PARTIES.
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Attest:
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NEWALLIANCE
BANK
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By:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Chairman, President and
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Chief
Executive Officer
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Attest:
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EXECUTIVE
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By:
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