Naugatuck Valley Financial Corporation and Naugatuck Valley Savings Employment Agreement with John C. Roman
Exhibit
10.1
Naugatuck
Valley Financial Corporation and Naugatuck Valley Savings
Employment
Agreement with ▇▇▇▇ ▇. ▇▇▇▇▇
THIS AGREEMENT (the
“Agreement”), as amended and restated, is hereby entered into as of November 20,
2007 (the “Effective Date”), by and between NAUGATUCK VALLEY FINANCIAL
CORPORATION, a federally chartered corporation (the “Company”), NAUGATUCK VALLEY SAVINGS AND LOAN,
a federally chartered savings bank (the “Bank”), and ▇▇▇▇ ▇. ▇▇▇▇▇ (the
“Executive”).
WHEREAS, the parties to this
Agreement originally entered into an employment agreement as of September 30,
2004; and
WHEREAS, Executive serves in a
position of substantial responsibility; and
WHEREAS, the Company and the
Bank wish to continue to assure the services of Executive for the period
provided in this Agreement; and
WHEREAS, Executive is willing
to continue to serve in the employ of the Bank on a full-time basis for said
period; and
WHEREAS, Executive and the
Boards of Directors of the Company and the Bank desire to enter into an amended
and restated employment agreement setting forth the terms and conditions of the
continuing employment of Executive and the related rights and obligations of
each of the parties and to bring the Agreement into compliance with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and the
regulations and guidance issued with respect to 409A of the Code.
NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and upon the other terms
and conditions hereinafter provided, the parties hereby agree as
follows:
1.
Employment. Executive is
employed as President and Chief Executive Officer of the Company and the
Bank. Executive shall perform all duties and shall have all powers
which are commonly incident to the offices of President and Chief Executive
Officer or which, consistent with those offices, are delegated to him by the
Boards of Directors. During the term of this Agreement, Executive
also agrees to serve, if elected, as an officer and/or director of any
subsidiary of the Company and the Bank and in such capacity will carry out such
duties and responsibilities as are reasonably appropriate to that
office.
2.
Location
and Facilities. Executive will be
furnished with the working facilities and staff customary for executive officers
with the title and duties set forth in Section 1 and as are necessary for him to
perform his duties. The location of such facilities and staff shall
be at the principal administrative offices of the Company and the Bank, or at
such other site or sites customary for such offices.
3.
Term.
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a.
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The
term of this Agreement, as amended and restated, shall be (i) the initial
term, consisting of the period commencing on the Effective Date and ending
on the second anniversary of the Effective Date, plus (ii) any and all
extensions of the initial term made pursuant to this Section 3.
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b.
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No
later than October 1, 2008, and continuing on each anniversary thereafter,
the disinterested members of the boards of directors of the Bank and the
Company may extend the Agreement an additional year (as of the anniversary
date of the Effective Date) such that the remaining term of the Agreement
shall be twenty-four (24) months, unless Executive elects not to extend
the term of this Agreement by giving written notice in accordance with
Section 19 of this Agreement. The Boards of Directors of the Bank and the
Company will review the Agreement and Executive’s performance annually
prior to each anniversary date for purposes of determining whether to
extend the Agreement and the rationale and results thereof shall be
included in the minutes of the meetings of the Boards of
Directors. The Boards of Directors shall give notice to
Executive as soon as possible after such review as to whether the
Agreement is to be extended.
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4.
Base
Compensation.
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a.
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The
Company and the Bank agree to pay Executive a base salary at the rate of
$171,393 per year, payable in accordance with customary payroll practices.
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b.
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The
Boards of Directors shall review annually the rate of Executive’s base
salary based upon factors they deem relevant, and may maintain or increase
his base salary, provided that no such action shall reduce the rate of
base salary below the rate in effect on the Effective Date.
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c.
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In
the absence of action by the Boards of Directors, Executive shall continue
to receive his base salary at the annual rate specified on the Effective
Date or, if another rate has been established under the provisions of this
Section 4, the rate last properly established by action of the Boards of
Directors under the provisions of this Section 4.
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5.
Bonuses. Executive shall
be entitled to participate in discretionary bonuses or other incentive
compensation programs that the Company and the Bank may award from time to time
to senior management employees pursuant to bonus plans or
otherwise.
6.
Benefit
Plans. Executive shall
be entitled to receive life insurance coverage with a death benefit equal to
three (3) times his base salary. Executive shall also be entitled to
participate in such medical, dental, pension, profit sharing, retirement and
stock-based compensation plans and other programs and arrangements as may be
approved from time to time by the Company and the Bank for the benefit of their
employees.
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7.
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Vacation and
Leave.
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a.
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Executive
shall be entitled to vacations and other leave in accordance with the
Bank’s policy for senior executives, or otherwise as approved by the Board
of Directors of the Bank.
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b.
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In
addition to paid vacations and other leave, Executive shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of
his employment for such additional periods of time and for such valid and
legitimate reasons as the Board of Directors of the Bank may, in its
discretion, determine. Further, the Boards of Directors may grant to
Executive a leave or leaves of absence, with or without pay, at such time
or times and upon such terms and conditions as the Boards of Directors in
its discretion may determine.
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8.
Expense
Payments and Reimbursements. Executive shall
be reimbursed for all
reasonable out-of-pocket business expenses that he shall incur in connection
with his services under this Agreement upon substantiation of such expenses in
accordance with applicable policies of the Company and the Bank.
9.
Automobile
Allowance. During the term of this Agreement, the Company or
the Bank shall provide Executive with a new automobile to be selected by
Executive, subject to approval by the Chairman of the Board of Directors of the
Bank. Executive shall have exclusive use of the automobile for
himself and his family. The Company or the Bank shall annually
include on Executive’s Form W-2 any amount of income attributable to Executive’s
personal use of the automobile. The Company or the Bank shall
maintain minimum liability insurance coverage on the automobile of $1,000,000
and shall have Executive named as additional insured on the automobile insurance
policy. Upon termination of Executive’s employment hereunder (other
than a termination for Cause, as defined in Section 11(c) hereof), he shall have
the option of purchasing the vehicle from the Company or the Bank for an amount
equal to its fair market value. Executive agrees to maintain the
vehicle in accordance with any applicable warranty provisions, and the Company
and the Bank agree to reimburse Executive for maintenance and upkeep, including
gasoline, subject to submission of such documentation as may be reasonably
required by the Company and the Bank.
10.
Loyalty and
Confidentiality.
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a.
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During
the term of this Agreement, Executive: (i) shall devote all his time,
attention, skill, and efforts to the faithful performance of his duties
hereunder; provided, however, that from time to time, Executive may serve
on the boards of directors of, and hold any other offices or positions in,
companies or organizations which will not present any conflict of interest
with the Company and the Bank or any of their subsidiaries or affiliates,
unfavorably affect the performance of Executive’s duties pursuant to this
Agreement, or violate any applicable statute or regulation and (ii) shall
not engage in any business or activity contrary to the business affairs or
interests of the Company and the Bank.
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b.
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Nothing
contained in this Agreement shall prevent or limit Executive’s right to
invest in the capital stock or other securities of any business dissimilar
from that of the Company and the Bank, or, solely as a passive, minority
investor, in any business.
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c.
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Executive
agrees to maintain the confidentiality of any and all information
concerning the operation or financial status of the Company and the Bank;
the names or addresses of any of its borrowers, depositors and other
customers; any information concerning or obtained from such customers; and
any other information concerning the Company and the Bank to which he may
be exposed during the course of his employment. Executive further agrees
that, unless required by law or specifically permitted by the Board of
Directors of the Bank in writing, he will not disclose to any person or
entity, either during or subsequent to his employment, any of the
above-mentioned information which is not generally known to the public,
nor shall he employ such information in any way other than for the benefit
of the Company and the Bank.
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11.
Termination
and Termination Pay. Subject to
Section 12 of this Agreement, Executive’s employment under this Agreement may be
terminated in the following circumstances:
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a.
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Death. Executive’s
employment under this Agreement shall terminate upon his death during the
term of this Agreement, in which event Executive’s estate shall be
entitled to receive the compensation due to Executive through the last day
of the calendar month in which his death occurred.
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b.
Disability.
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i.
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The
Boards of Directors or Executive may terminate Executive’s employment
after having determined Executive has a Disability. For
purposes of this Agreement, “Disability” means Executive is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result
in death or can be expected to last for a continuous period of not less
than twelve (12) months. The Board of Directors of the Bank
shall determine whether or not Executive is and continues to be
permanently disabled for purposes of this Agreement in good faith, based
upon competent medical advice and other factors that they reasonably
believe to be relevant. As a condition to any benefits, the
Board may require Executive to submit to such physical or mental
evaluations and tests as it deems reasonably appropriate.
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ii.
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In
the event of such Disability, Executive’s obligation to perform services
under this Agreement will terminate. The Bank or the Company
will pay Executive, as Disability pay, seventy-five percent (75%) of
Executive’s annual base salary in effect as of the date of his termination
of employment due to Disability. Disability payments will be
made in equal installments on
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a monthly
basis, commencing on the first day of the month following the effective date of
Executive’s termination of employment for Disability and ending on the earlier
of: (A) the date he returns to full-time employment at the Bank in the same
capacity as he was employed prior to his termination for Disability; (B) his
death; or (C) upon his attainment of age 65. Disability payments
shall be reduced by the amount of any short- or long-term disability benefits
payable to Executive under any other disability programs sponsored by the
Company and the Bank. In addition, during any period of Executive’s
Disability, Executive and his dependents shall, to the greatest extent possible,
continue to be covered under all benefit plans (including, without limitation,
retirement plans and medical, dental and life insurance plans) of the Company
and the Bank, in which Executive participated prior to his Disability on the
same terms as if Executive were actively employed by the Company and the
Bank.
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c.
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Termination for
Cause.
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i.
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The
Boards of Directors may, by written notice to Executive in the form and
manner specified in this paragraph, immediately terminate his employment
at any time for “Cause.” Executive shall have no right to
receive compensation or other benefits for any period after termination
for Cause except for vested benefits. Termination for Cause
shall mean termination because of, in the good faith determination of the
Boards of Directors, Executive’s:
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(1)
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Personal
dishonesty;
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(2)
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Incompetence;
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(3)
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Willful
misconduct;
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(4)
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Breach
of fiduciary duty involving personal profit;
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(5)
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Intentional
failure to perform stated duties under this Agreement;
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(6)
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Willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) that reflects adversely on the reputation of the Company
and the Bank, any felony conviction, any violation of law involving moral
turpitude, or any violation of a final cease-and-desist order; or
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(7)
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Material
breach by Executive of any provision of this Agreement.
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ii.
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Notwithstanding
the foregoing, Executive shall not be deemed to have been terminated for
Cause by the Company and the Bank unless there shall have been delivered
to Executive a copy of a resolution duly adopted by the
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affirmative
vote of a majority of the entire membership of the Boards of Directors at a
meeting of such Board called and held for the purpose (after reasonable notice
to Executive and an opportunity for Executive to be heard before the Boards of
Directors with counsel), of finding that, in the good faith opinion of the
Boards of Directors, Executive was guilty of the conduct described above and
specifying the particulars thereof.
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d.
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Voluntary Termination
by Executive. In addition to his other rights to
terminate under this Agreement, Executive may voluntarily terminate
employment during the term of this Agreement upon at least sixty (60) days
prior written notice to the Boards of Directors, in which case Executive
shall receive only his compensation, vested rights and employee benefits
up to the date of his termination.
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e.
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Without Cause or With
Good Reason.
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i.
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In
addition to termination pursuant to Sections 11(a) through 11(d), the
Boards of Directors may, by written notice to Executive, immediately
terminate his employment at any time for a reason other than Cause (a
termination “Without Cause”) and Executive may, by written notice to the
Boards of Directors, immediately terminate this Agreement at any time
within ninety (90) days following an event constituting “Good Reason,” as
defined below (a termination “With Good Reason”).
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ii.
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Subject
to Section 12 of this Agreement, in the event of termination under this
Section 11(e), Executive shall be entitled to receive the value of his
base salary for the remaining term of the Agreement plus the value of all
benefits he would have received during the remaining term of the Agreement
under any retirement programs (whether tax-qualified or non-qualified) in
which Executive participated prior to his termination (with the amount of
the benefits determined by reference to the benefits received by Executive
or accrued on his behalf under such programs during the twelve (12) months
preceding his termination). Executive shall receive this payment in a
single lump sum within ten (10) days of his termination of employment. In
addition, Executive and his dependents will continue to participate in any
benefit plans of the Company and the Bank that provide health (including
medical and dental), life or disability insurance, or similar coverage,
upon terms no less favorable than the most favorable terms provided to
senior executives of the Company and the Bank during the remaining term of
the Agreement. In the event that the Company and the Bank are unable to
provide such coverage because Executive is no longer an employee, the
Company and the Bank shall provide Executive with comparable coverage on
an individual policy basis.
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iii.
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“Good
Reason” shall exist if, without Executive’s express written consent, the
Company or the Bank materially breach any of their respective
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obligations
under this Agreement. Without limitation, such a material breach
shall be deemed to occur upon any of the following:
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(1)
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A
material reduction in Executive’s responsibilities or authority in
connection with his employment with the Company or the Bank;
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(2)
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Assignment
to Executive of duties of a non-executive nature or duties for which he is
not reasonably equipped by his skills and experience;
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(3)
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Failure
of Executive to be nominated or renominated to the Boards of Directors of
the Company or the Bank;
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(4)
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A
material reduction in salary or benefits contrary to the terms of this
Agreement, or, following a Change in Control as defined in Section 12 of
this Agreement, any material reduction in salary or benefits below the
amounts to which Executive was entitled prior to the Change in Control;
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(5)
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Termination
of incentive and benefit plans, programs or arrangements, or reduction of
Executive’s participation to such an extent as to materially reduce their
aggregate value below their aggregate value as of the Effective Date;
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(6)
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A
relocation of Executive’s principal business office by more than thirty
(30) miles from its current location; or
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(7)
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Liquidation
or dissolution of the Company or the Bank.
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iv.
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Notwithstanding
the foregoing, a reduction or elimination of Executive’s benefits under
one or more benefit plans maintained by the Company or the Bank as part of
a good faith, overall reduction or elimination of such plans or benefits
thereunder applicable to all participants in a manner that does not
discriminate against Executive (except as such discrimination may be
necessary to comply with law) shall not constitute an event of Good Reason
or a material breach of this Agreement, provided that benefits of the same
type or to the same general extent as those offered under such plans are
not available to other officers of the Company and the Bank, or any
company that controls either of them, under a plan or plans in or under
which Executive is not entitled to participate subsequent to such
reduction or elimination of benefits.
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v.
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Upon
the occurrence of any event described in clauses (iii) (1) through (6),
above, Executive shall have the right to elect to terminate his employment
under this Agreement by resignation upon sixty (60) days prior written
notice given within a reasonable period of time not to exceed ninety (90)
days after
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the
initial event giving rise to said right to elect; provided, however that the
Bank and the Company shall have at least thirty (30) days to cure such condition
and provided that Executive actually terminates employment within two years
after the initial occurrence of such event. Notwithstanding the
preceding sentence, in the event of a continuing breach of this Agreement by the
Bank or the Company, Executive, after giving due notice within the prescribed
time frame of an initial event specified above, shall not waive any of his
rights solely under this Agreement and this Section 4 by virtue of the fact that
Executive has submitted his resignation but has remained in the employment of
the Bank or the Company and is engaged in good faith discussions to resolve any
occurrence of an event described in clauses (1) through (7) above.
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vi.
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The
parties to this Agreement intend for the payments to satisfy the
short-term deferral exception under Section 409A of the Code or, in the
case of health and welfare benefits, not constitute deferred compensation
(since such amounts are not taxable to Executive). However,
notwithstanding anything to the contrary in this Agreement, to the extent
payments do not meet the short-term deferral exception of Section 409A of
the Code and, in the event Executive is a “Specified Employee” (as defined
herein) no payment shall be made to Executive under this Agreement prior
to the first day of the seventh month following the Event of Termination
in excess of the “permitted amount” under Section 409A of the
Code. For these purposes the “permitted amount” shall be an
amount that does not exceed two times the lesser of: (A) the sum of
Executive’s annualized compensation based upon the annual rate of pay for
services provided to the Company for the calendar year preceding the year
in which Executive has an Event of Termination, or (B) the maximum amount
that may be taken into account under a tax-qualified plan pursuant to
Section 401(a)(17) of the Code for the calendar year in which occurs the
Event of Termination. The payment of the “permitted amount”
shall be made within sixty (60) days of the occurrence of the Event of
Termination. Any payment in excess of the permitted amount
shall be made to Executive on the first day of the seventh month following
the Event of Termination. “Specified Employee” shall be
interpreted to comply with Section 409A of the Code and shall mean a key
employee within the meaning of Section 416(i) of the Code (without regard
to paragraph 5 thereof), but an individual shall be a “Specified Employee”
only if the Company is a publicly-traded institution or the subsidiary of
a publicly-traded holding company.
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f.
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Continuing Covenant
Not to Compete or Interfere with
Relationships. Regardless of anything herein to the
contrary, following a termination by the Company and the Bank or Executive
pursuant to Section 11(e):
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i.
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Executive’s
obligations under Section 10(b) of this Agreement will continue in effect;
and
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ii.
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During
the period ending on the first anniversary of such termination, Executive
shall not serve as an officer, director or employee of any bank holding
company, bank, savings bank, savings and loan holding company, or mortgage
company (any of which is referred to herein as a “Financial Institution”)
which Financial Institution offers products or services competing with
those offered by the Bank from any office within fifty (50) miles from the
main office or any branch of the Bank and shall not interfere with the
relationship of the Company and the Bank and any of its employees, agents,
or representatives; provided, however, that this clause ii shall not apply
or otherwise restrict Executive if the Company and the Bank have not
renewed the term of the Agreement pursuant to Section 3(b) and Executive
terminates employment at a time when the remaining term of Agreement is
one year or less.
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12.
Termination in
Connection with a Change in Control.
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a.
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For
purposes of this Agreement, a “Change in Control” means any of the
following events:
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i.
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Merger: The
Company merges into or consolidates with another corporation, or merges
another corporation into the Company, and as a result less than a majority
of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by persons who were stockholders
of the Company immediately before the merger or consolidation.
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ii.
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Acquisition of
Significant Share Ownership: There is filed, or required
to be filed, a report on Schedule 13D or another form or schedule (other
than Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the filing
person or persons acting in concert has or have become the beneficial
owner of 25% or more of a class of the Company’s voting securities, but
this clause (b) shall not apply to beneficial ownership of Company voting
shares held in a fiduciary capacity by an entity of which the Company
directly or indirectly beneficially owns 50% or more of its outstanding
voting securities.
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iii.
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Change in Board
Composition: During any period of two consecutive years,
individuals who constitute the Company’s Board of Directors at the
beginning of the two-year period cease for any reason to constitute at
least a majority of the Company’s Board of Directors; provided, however,
that for purposes of this clause (iii), each director who is first elected
by the board (or first nominated by the board for election by the
stockholders) by a vote of at least two-thirds (2/3) of the directors who
were directors at the beginning of
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the
two-year period shall be deemed to have also been a director at the beginning of
such period; or
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iv.
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Sale of
Assets: The Company sells to a third party all or
substantially all of its assets.
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Notwithstanding
anything in this Agreement to the contrary, in no event shall the reorganization
of the Bank from the mutual holding company form of organization to the full
stock holding company form of organization (including the elimination of the
mutual holding company) constitute a “Change in Control” for purposes of this
Agreement.
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b.
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Termination. If
within the period ending three (3) years after a Change in Control, (i)
the Company and the Bank shall terminate Executive’s employment
Without Cause, or (ii) Executive voluntarily terminates his
employment With Good Reason, the Company and the Bank shall, within ten
calendar days of the termination of Executive’s employment, make a
lump-sum cash payment to him equal to three (3) times Executive’s average
Annual Compensation over the five (5) most recently completed calendar
years ending with the year immediately preceding the effective date of the
Change in Control. In determining Executive’s average Annual
Compensation, “Annual Compensation” shall include base salary and any
other taxable income, including, but not limited to, amounts related to
the granting, vesting or exercise of restricted stock or stock option
awards, commissions, bonuses (whether paid or accrued for the applicable
period), as well as, retirement benefits, director or committee fees and
fringe benefits paid or to be paid to Executive or paid for Executive’s
benefit during any such year, profit sharing, employee stock ownership
plan and other retirement contributions or benefits, including to any
tax-qualified plan or arrangement (whether or not taxable) made or accrued
on behalf of Executive for such year. The cash payment
made under this Section 12(b) shall be made in lieu of any payment also
required under Section 11(e) of this Agreement because of a termination in
such period. Executive’s rights under Section 11(e) are not
otherwise affected by this Section 12. Also, in such event,
Executive shall, for a thirty-six (36) month period following his
termination of employment, receive the benefits he would have received
over such thirty-six (36) month period under any retirement programs
(whether tax-qualified or nonqualified) in which Executive participated
prior to his termination (with the amount of the benefits determined by
reference to the benefits received by Executive or accrued on his behalf
under such programs during the twelve (12) months preceding the Change in
Control) and continue to participate in any benefit plans of the Company
and the Bank that provide health (including medical and dental), life or
disability insurance, or similar coverage upon terms no less favorable
than the most favorable terms provided to senior executives of the Bank
during such period. In the event that the Company and the Bank
are unable to provide such coverage because Executive is no longer an
employee, the Company and the Bank shall provide Executive with comparable
coverage under an individual policy. The parties to this
Agreement intend for the
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payments
to satisfy the short-term deferral exception under Section 409A of the Code or,
in the case of health and welfare benefits, not constitute deferred compensation
(since such amounts are not taxable to Executive). However,
notwithstanding anything to the contrary in this Agreement, to the extent
payments do not meet the short-term deferral exception of Section 409A of the
Code and, in the event Executive is a “Specified Employee” (as defined herein)
no payment shall be made to Executive under this Agreement prior to the first
day of the seventh month following the Event of Termination in excess of the
“permitted amount” under Section 409A of the Code. For these purposes
the “permitted amount” shall be an amount that does not exceed two times the
lesser of: (A) the sum of Executive’s annualized compensation based upon the
annual rate of pay for services provided to the Company for the calendar year
preceding the year in which Executive has an Event of Termination, or (B) the
maximum amount that may be taken into account under a tax-qualified plan
pursuant to Section 401(a)(17) of the Code for the calendar year in which occurs
the Event of Termination. The payment of the “permitted amount” shall
be made within sixty (60) days of the occurrence of the Event of
Termination. Any payment in excess of the permitted amount shall be
made to Executive on the first day of the seventh month following the Event of
Termination. “Specified Employee” shall be interpreted to comply with
Section 409A of the Code and shall mean a key employee within the meaning of
Section 416(i) of the Code (without regard to paragraph 5 thereof), but an
individual shall be a “Specified Employee” only if the Company is a
publicly-traded institution or the subsidiary of a publicly-traded holding
company.
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c.
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The
provisions of Section 12 and Sections 14 through 25, including the defined
terms used in such sections, shall continue in effect until the later of
the expiration of this Agreement or three (3) years following a Change in
Control.
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13.
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Indemnification and
Liability Insurance.
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a.
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Indemnification. The
Company and the Bank agree to indemnify Executive (and his heirs,
executors, and administrators), and to advance expenses related thereto,
to the fullest extent permitted under applicable law and regulations
against any and all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which
he may be involved by reason of his having been a director or executive of
the Company, the Bank or any of their subsidiaries (whether or not he
continues to be a director or executive at the time of incurring any such
expenses or liabilities) such expenses and liabilities to include, but not
be limited to, judgments, court costs, and attorneys’ fees and the costs
of reasonable settlements, such settlements to be approved by the Board of
Directors of the Bank, if such action is brought against Executive in his
capacity as an executive or director of the Company and the Bank or any of
their subsidiaries. Indemnification for expenses shall not
extend to matters for which Executive has been terminated for
Cause. Nothing contained herein shall be deemed to provide
indemnification prohibited by applicable law or
regulation. Notwithstanding
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anything
herein to the contrary, the obligations of this Section 13 shall survive the
term of this Agreement by a period of six (6) years.
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b.
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Insurance. During
the period in which indemnification of Executive is required under this
Section 13, the Company and the Bank shall provide Executive (and his
heirs, executors, and administrators) with coverage under a directors’ and
officers’ liability policy at the expense of the Company and the Bank, at
least equivalent to such coverage provided to directors and senior
executives of the Company and the Bank.
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14.
Reimbursement
of Executive’s Expenses to Enforce this Agreement. The Company and
the Bank shall reimburse Executive for all out-of-pocket expenses, including,
without limitation, reasonable attorneys’ fees, incurred by Executive in
connection with successful enforcement by Executive of the obligations of the
Company and the Bank to Executive under this Agreement. Successful
enforcement shall mean the grant of an award of money or the requirement that
the Company and the Bank take some action specified by this Agreement: (i) as a
result of court order; or (ii) otherwise by the Company and the Bank following
an initial failure of the Company and the Bank to pay such money or take such
action promptly after written demand therefor from Executive stating the reason
that such money or action was due under this Agreement at or prior to the time
of such demand.
15.
Limitation
of Benefits Under Certain Circumstances. If the payments
and benefits pursuant to Section 12 of this Agreement, either alone or together
with other payments and benefits which Executive has the right to receive from
the Company and the Bank, would constitute a “parachute payment” under Section
280G of the Code, the payments and benefits pursuant to Section 12 shall be
reduced or revised, in the manner determined by Executive, by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits under Section 12 being non-deductible to the Company and the Bank
pursuant to Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code. The determination of any reduction in the
payments and benefits to be made pursuant to Section 12 shall be based upon the
opinion of the Company and the Bank’s independent public accountants and paid
for by the Company and the Bank. In the event that the Company, the
Bank and/or Executive do not agree with the opinion of such counsel, (i) the
Company and the Bank shall pay to Executive the maximum amount of payments and
benefits pursuant to Section 12, as selected by Executive, which such opinion
indicates there is a high probability do not result in any of such payments and
benefits being non-deductible to the Company and the Bank and subject to the
imposition of the excise tax imposed under Section 4999 of the Code and (ii) the
Company and the Bank may request, and Executive shall have the right to demand
that they request, a ruling from the IRS as to whether the disputed payments and
benefits pursuant to Section 12 have such consequences. Any such
request for a ruling from the IRS shall be promptly prepared and filed by the
Company and the Bank, but in no event later than thirty (30) days from the date
of the opinion of counsel referred to above, and shall be subject to Executive’s
approval prior to filing, which shall not be unreasonably
withheld. The Company, the Bank and Executive agree to be bound by
any ruling received from the IRS and to make appropriate payments to each other
to reflect any such rulings, together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code. Nothing
contained herein shall result in a reduction of any
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payments
or benefits to which Executive may be entitled upon termination of employment
other than pursuant to Section 12 hereof, or a reduction in the payments and
benefits specified in Section 12 below zero.
16.
Injunctive
Relief. If there is a
breach or threatened breach of Section 11(f) of this Agreement or the
prohibitions upon disclosure contained in Section 10(c) of this Agreement, the
parties agree that there is no adequate remedy at law for such breach, and that
the Company and the Bank shall be entitled to injunctive relief restraining
Executive from such breach or threatened breach, but such relief shall not be
the exclusive remedy hereunder for such breach. The parties hereto
likewise agree that Executive, without limitation, shall be entitled to
injunctive relief to enforce the obligations of the Company and the Bank under
this Agreement.
17.
Successors and
Assigns.
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a.
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This
Agreement shall inure to the benefit of and be binding upon any corporate
or other successor to the Company and the Bank which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise,
all or substantially all of the assets or stock of the Company and the
Bank.
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b.
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Since
the Company and the Bank are contracting for the unique and personal
skills of Executive, Executive shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the
written consent of the Company and the Bank.
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18.
No
Mitigation. Executive shall
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to
Executive in any subsequent employment.
19.
Notices. All notices,
requests, demands and other communications in connection with this Agreement
shall be made in writing and shall be deemed to have been given when delivered
by hand or 48 hours after mailing at any general or branch United States Post
Office, by registered or certified mail, postage prepaid, addressed to the
Company and/or the Bank at their principal business offices and to Executive at
his home address as maintained in the records of the Company and the
Bank.
20.
No
Plan Created by this Agreement. Executive, the
Company and the Bank expressly declare and agree that this Agreement was
negotiated among them and that no provision or provisions of this Agreement are
intended to, or shall be deemed to, create any plan for purposes of the Employee
Retirement Income Security Act or any other law or regulation, and each party
expressly waives any right to assert the contrary. Any assertion in
any judicial or administrative filing, hearing, or process that such a plan was
so created by this Agreement shall be deemed a material breach of this Agreement
by the party making such an assertion.
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21.
Amendments. No amendments or
additions to this Agreement shall be binding unless made in writing and signed
by all of the parties, except as otherwise specifically provided in this
Agreement.
22.
Applicable
Law. Except to the
extent preempted by federal law, the laws of the State of Connecticut shall
govern this Agreement in all respects, whether as to its validity, construction,
capacity, performance or otherwise.
23.
Severability. The provisions of
this Agreement shall be deemed severable and the invalidity or unenforceability
of any provision shall not affect the validity or enforceability of the other
provisions hereof.
24.
Headings. Headings
contained herein are for convenience of reference only.
25.
Entire
Agreement. This Agreement,
together with any understanding or modifications thereof as agreed to in writing
by the parties, shall constitute the entire agreement among the parties hereto
with respect to the subject matter hereof, other than written agreements with
respect to specific plans, programs or arrangements as described in Sections 5
and 6.
26.
Required
Provisions.
In the event any of the foregoing provisions of this Section 26 are
in conflict with the terms of this Agreement, this Section 26 shall
prevail.
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a.
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The
Bank may terminate Executive’s employment at any time, but any termination
by the Bank, other than termination for Cause, shall not prejudice
Executive’s right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive
compensation or other benefits for any period after termination for Cause
as defined in Section 11(c) above.
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b.
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If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served
under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. Section 1818(e)(3) or (g)(1); the Bank’s obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are
dismissed, the Bank may, in its discretion: (i) pay Executive
all or part of the compensation withheld while its contract obligations
were suspended; and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
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c.
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If
Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Section 8(e)(4)
or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section
1818(e)(4) or (g)(1), all obligations of the Bank under this contract
shall terminate as of the effective date of the order, but vested rights
of the contracting parties shall not be affected.
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d.
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If
the Bank is in default as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations of
the Bank under this
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14
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contract
shall terminate as of the date of default, but this paragraph shall not
affect any vested rights of the contracting parties.
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e.
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All
obligations of the Bank under this contract shall be terminated, except to
the extent it is determined that continuation of the contract is necessary
for the continued operation of the institution: (i) by the Director of the
OTS (or his designee), the FDIC or the Resolution Trust Corporation, at
the time the FDIC enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1823(c); or (ii) by the
Director of the OTS (or his designee) at the time the Director (or his
designee) approves a supervisory merger to resolve problems related to the
operations of the Bank or when the Bank is determined by the Director to
be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
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f.
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Any
payments made to Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k)
and 12 C.F.R. Section 545.121 and any rules and regulations promulgated
thereunder.
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15
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement, as amended and restated, on the
date first set forth above.
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ATTEST:
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NAUGATUCK
VALLEY FINANCIAL
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CORPORATION
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/s/
▇▇▇▇▇▇▇▇▇▇ ▇. Mole
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Corporate
Secretary
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For
the Entire Board of Directors
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||
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ATTEST:
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NAUGATUCK
VALLEY SAVINGS AND LOAN
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||
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/s/
▇▇▇▇▇▇▇▇▇▇ ▇. Mole
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Corporate
Secretary
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For
the Entire Board of Directors
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WITNESS:
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EXECUTIVE
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/s/
▇▇▇▇▇▇▇▇▇▇ ▇. Mole
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By:
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/s/
▇▇▇▇ ▇. ▇▇▇▇▇
|
|
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Corporate
Secretary
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▇▇▇▇
▇. ▇▇▇▇▇
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||
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