NEW ENGLAND BANCSHARES, INC. EMPLOYMENT AGREEMENT
Exhibit
10.2
THIS
AGREEMENT
(the
“Agreement”), made this 28th
day of
December, 2005, by and among NEW
ENGLAND BANCSHARES, INC.,
a
Maryland corporation (the “Company”), and
▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇
(“Executive”). References to the “Association” herein shall mean ENFIELD
FEDERAL SAVINGS AND LOAN ASSOCIATION.
W
I T N E S S E T H
WHEREAS,
Executive serves in a position of substantial responsibility;
WHEREAS,
the
Company wishes to assure the services of Executive for the period provided
in
this Agreement; and
WHEREAS,
Executive is willing to serve in the employ of the Company on a full-time basis
for said period.
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 the President and Chief Executive Officer of the Company.
Executive shall perform all duties and shall have all powers which are commonly
incident to the offices of President and Chief Executive Officer of the Company
or which, consistent with those offices, are delegated to him by the Board
of
Directors of the Company. 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 in such capacity carry out such duties and responsibilities
reasonably appropriate to that office.
2. Location
and Facilities.
The
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, or at
such other site or sites customary for such offices.
3. Term.
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The
period of Executive’s employment under this Agreement shall be deemed to
have commenced as of the date written above and shall continue for
a
period of thirty-six (36) full calendar months. The term of this
Agreement
shall be extended for one day each day so that a constant thirty-six
(36)
calendar month term shall remain in effect, until such time as the
Board
of Directors of the Company (the “Board”) or Executive elects not to
extend the term of the Agreement by giving written notice to the
other
party in accordance with the terms of this
Agreement,
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in
which
case the term of this Agreement shall be fixed and shall end on the third
anniversary of the date of such written notice
4. Base
Compensation.
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a.
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The
Company agrees to pay the Executive during the term of this Agreement
a
base salary at the rate of $220,000
per year, payable in accordance with customary payroll
practices.
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b.
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The
Board shall review annually the rate of the Executive’s base salary based
upon factors they deem relevant, and may maintain or increase his
salary,
provided that no such action shall reduce the rate of 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 Board, the Executive shall continue
to
receive 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 Board under the
provisions of this Section 4.
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5. Bonuses.
The
Executive shall be entitled to participate in discretionary bonuses or other
incentive compensation programs that the Company may award from time to time
to
senior management employees pursuant to bonus plans or otherwise.
6. Benefit
Plans.
The
Executive shall be entitled to participate in such life insurance, 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 Association for the benefit of their employees.
7. Vacation
and Leave.
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a.
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The
Executive shall be entitled to vacation and other leave in accordance
with
policy for senior executives, or otherwise as approved by the
Board.
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b.
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In
addition to paid vacation and other leave, the 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 may in its discretion
determine. Further, the Board may grant to the Executive a leave
or leaves
of absence, with or without pay, at such time or times and upon such
terms
and conditions as the Board in its discretion may
determine.
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8. Expense
Payments and Reimbursements.
The
Executive shall be reimbursed for all reasonable out-of-pocket business expenses
that he shall incur in connection with his
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services
under this Agreement upon substantiation of such expenses in accordance with
applicable policies of the Company.
9. Automobile
Allowance.
During
the term of this Agreement, the Executive shall be entitled to an automobile
allowance on terms no less favorable that those in effect immediately prior
to
the execution of this Agreement. Executive shall comply with reasonable
reporting and expense limitations on the use of such automobile as may be
established by the Company or the Association from time to time, and the Company
or the Association shall annually include on Executive’s Form W-2 any amount of
income attributable to Executive’s personal use of such automobile.
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 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.
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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, 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
Association, 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
Association to which he may be exposed during the course of his
employment. The Executive further agrees that, unless required by
law or
specifically permitted by the Board 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
Association.
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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. |
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 the Executive through
the
last day of the calendar month in which his death
occurred.
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b.
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Retirement.
This Agreement shall be terminated upon Executive’s retirement under the
retirement benefit plan or plans in which he participates pursuant
to
Section 6 of this Agreement or
otherwise.
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c.
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Disability.
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i.
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The
Board or Executive may terminate Executive’s employment after having
determined Executive has a Disability. For purposes of this Agreement,
“Disability” means a physical or mental infirmity that impairs Executive’s
ability to substantially perform his duties under this Agreement
and that
results in Executive becoming eligible for long-term disability benefits
under any long-term disability plans of the Company and the Association
(or, if there are no such plans in effect, that impairs Executive’s
ability to substantially perform his duties under this Agreement
for a
period of one hundred eighty (180) consecutive days). The Board 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 Association or the Company
will
pay Executive, as Disability pay, an amount equal to 100% of Executive’s
bi-weekly rate of base salary in effect as of the date of his termination
of employment due to Disability. Disability payments will be made
on a
monthly basis and will commence on the first day of the month following
the effective date of Executive’s termination of employment for Disability
and end on the earlier of: (A) the date he returns to full-time employment
at the Company in the same capacity as he was employed prior to his
termination for Disability; (B) his death; or (C) upon attainment
of age
65. Such payments shall be reduced by the amount of any short- or
long-term disability benefits payable to the Executive under any
other
disability programs sponsored by the Association or the Company.
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)
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of
the
Association and the Company, in which Executive participated prior to his
Disability on the same terms as if Executive were actively employed by the
Company.
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d.
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Termination
for Cause.
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i.
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The
Board may, by written notice to the Executive in the form and manner
specified in this paragraph, terminate his employment at any time,
for
“Cause”. The Executive shall have no right to receive compensation or
other benefits for any period after termination for Cause. Termination
for
“Cause” shall mean termination because of, in the good faith determination
of the Board, 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;
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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 Association, 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 Association unless there shall have been delivered to
Executive a copy of a resolution duly adopted at a meeting of such
Board
where in the good faith opinion of the Board, Executive was guilty
of the
conduct described above and specifying the particulars
thereof.
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e.
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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, 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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5
| f. |
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(e)
the
Boards, 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 Board,
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(f), Executive shall be entitled to receive his base salary
for
the remaining term of the Agreement paid in one lump sum within ten
(10)
calendar days of such termination. Also, in such event, Executive
shall,
for the remaining term of the Agreement, receive the 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 the
Executive
or accrued on his behalf under such programs during the twelve (12)
months
preceding his termination) and continue to participate in any benefit
plans of the Association or the Company that provide health (including
medical and dental), or life insurance, or similar coverage upon
terms no
less favorable than the most favorable terms provided to senior executives
of the Company during such period. In the event that the Company
or the
Association are unable to provide such coverage by reason of Executive
no
longer being an employee, the Company 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
Association materially breach any of their respective 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
Association;
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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 the Executive to be nominated or re-nominated to the
Board
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(4)
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A
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 reduction in salary or material reduction in benefits
below
the amounts to which he 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
requirement that Executive relocate his principal business office
or his
principal place of residence outside of the area consisting of a
twenty-five (25) mile radius from the current main office and any
branch
of the Association, or the assignment to Executive of duties that
would
reasonably require such a relocation;
or
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| (7) |
liquidation
or dissolution of the Company or the
Association.
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iv.
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Notwithstanding
the foregoing, a reduction or elimination of the Executive’s benefits
under one or more benefit plans maintained by the Company or the
Association as part of a good faith, overall reduction or elimination
of
such plans or plans or benefits thereunder applicably 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 type or to the general extent as those offered
under
such plans prior to such reduction or elimination are not available
to
other officers of the Association or any company that controls the
Association under a plan or plans in or under which Executive is
not
entitled to participate.
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g.
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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 Association or Executive pursuant to Section
11(f):
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i.
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Executive’s
obligations under Section 10(c) 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, the
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, a “Financial Institution”)
which
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Financial
Institution offers products or services competing with those offered by the
Association from any office within fifty (50) miles from the main office or
any
branch of the Association and shall not interfere with the relationship of
the
Company and the Association and any of its employees, agents, or
representatives.
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) |
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) |
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 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) |
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 reorganization
of
the Association from the mutual holding company form or 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 two (2) years after a Change in Control,
(i)
the Company and the Association shall terminate the Executive’s employment
Without Cause, or (ii) Executive voluntarily terminates his employment
With Good Reason, the Company and the Association 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 the 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 of such year. The cash payment made under this Section
12(a)
shall be made in lieu of any payment also required under Section
11(f) of
this Agreement because of a termination in such period. Executive’s rights
under Section 11(f) are not otherwise affected by this Section 12.
Also,
in such event, the Executive shall, for a thirty-six (36) month period
following his termination of employment, receive the benefits he
would
have received over such period under any retirement programs (whether
tax-qualified or nonqualified) in which the Executive participated
prior
to his termination (with the amount of the benefits determined by
reference to the benefits received by the 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 Association that provide health (including medical
and
dental), or life insurance, or similar coverage upon terms no less
favorable than the most favorable terms provided to senior executives
of
the Association during such period. In the event that the Company
and the
Association are unable to provide such coverage by reason of the
Executive
no longer being an employee, the Company and the Association shall
provide
the Executive with comparable coverage on an individual
policy.
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| c. |
The
provisions of Section 12 and Sections 14 through 25, including the
defined
terms used is such sections, shall continue in effect until the later
of
the expiration of this Agreement or two (2) years following a Change
in
Control.
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13.
Indemnification
and Liability Insurance.
Subject
to, and limited by Section 26(f) of this Agreement, the Association shall
provide the following:
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a.
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Indemnification.
The Company and the Association agree to indemnify the 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 Association 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
attorney’s fees and the cost of reasonable settlements, such settlements
to be approved by the Board, if such action is brought against the
Executive in his capacity as an Executive or director of the Company
and
the Association or any of their subsidiaries. Indemnification for
expense
shall not extend to matters for which the Executive has been terminated
for Cause. Nothing contained herein shall be deemed to provide
indemnification prohibited by applicable law or regulation.
Notwithstanding 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 the Executive is required
under this Section, the Company and the Association shall provide
the
Executive (and his heirs, executors, and administrators) with coverage
under a directors’ and Executives’ liability policy at the expense of the
Company and the Association, at least equivalent to such coverage
provided
to directors and senior Executives of the Company and the
Association.
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14. Reimbursement
of Executive’s Expenses to Enforce this Agreement.
The
Association shall reimburse the Executive for all reasonable out-of-pocket
expenses, including, without limitation, reasonable attorney’s fees, incurred by
the Executive in connection with successful enforcement by the Executive of
the
obligations of the Association to the Executive under this Agreement. Successful
enforcement shall mean the grant of an award of money or the requirement that
the Association take some action specified by this Agreement: (i) as a result
of
court order; or (ii) otherwise by the Association following an initial
failure of the Association to pay such money or take such action promptly after
written demand therefor from the Executive stating the reason that such money
or
action was due under this Agreement at or prior to the time of such
demand.
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15.
Adjustment
of Certain Payments and Benefits.
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a.
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Tax
Indemnification.
Anything in this Agreement to the contrary notwithstanding and except
as
set forth below, in the event it shall be determined that any payment,
benefit or distribution made or provided by the Company or the Association
to or for the benefit of the Executive (whether made or provided
pursuant
to the terms of this Agreement or otherwise) (each referred to herein
as a
“Payment”), would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the “Code”) or any interest
or penalties are incurred by the Executive with respect to such excise
tax
(the excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”)
in an amount such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes),
including, without limitation, any income taxes (and any interest
and
penalties imposed with respect thereto) and Excise Tax imposed upon
the
Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment
equal to the Excise Tax imposed upon the
Payments.
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b.
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Determination
of Gross-Up Payment.
Subject to the provisions of Section 15(c), all determinations required
to
be made under this Section 15, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall
be
made by a certified public accounting firm reasonably acceptable
to the
Company and the Association as may be designated by the Executive
(the
“Accounting Firm”) which shall provide detailed supporting calculations to
the Company, the Association and the Executive within fifteen (15)
business days of the receipt of notice from the Executive that there
has
been a Payment, or such earlier time as is requested by the Company
and
the Association. All fees and expenses of the Accounting Firm shall
be
borne solely by the Company and the Association. Any Gross-Up Payment,
as
determined pursuant to this Section 15, shall be paid by the Company
to
the Executive within five business days of the later of (i) the due
date
for the payment of any Excise Tax, and (ii) the receipt of the Accounting
Firm’s determination. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty
in the application of Section 4999 of the Code, at the time of the
initial
determination by the Accounting Firm hereunder, it is possible that
a
Gross-Up Payment will not have been made by the Company and the
Association which should have been made (an “Underpayment”), consistent
with the calculations required to be made hereunder. In the event
that the
Company and the Association exhaust their remedies pursuant to Section
15(c) and the Executive thereafter is required to make a payment
of any
Excise Tax, the Accounting Firm shall determine
the
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11
amount
of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company or the Association to or for the benefit of the
Executive.
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c.
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Treatment
of Claims.
The Executive shall notify the Company and the Association in writing
of
any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment to be made. Such notification shall be
given as
soon as practicable, but no later than ten business days, after the
Executive is informed in writing of such claim and shall apprise
the
Company and the Association of the nature of such claim and the date
on
which such claim is requested to be paid. The Executive shall not
pay such
claim prior to the expiration of the thirty (30) day period following
the
date on which it gives such notice to the Company and the Association
(or
any shorter period ending on the date that payment of taxes with
respect
to such claim is due). If the Company or the Association notifies
the
Executive in writing prior to the expiration of this period that
it
desires to contest such claim, the Executive
shall:
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i.
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give
the Company and the Association any information reasonably requested
by
the Company and the Association relating to such
claim;
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ii.
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take
such action in connection with contesting such claim as the Company
and
the Association shall reasonably request in writing from time to
time,
including, without limitation, accepting legal representation with
respect
to such claim by an attorney reasonably selected by the Company and
the
Association;
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iii.
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cooperate
with the Company and the Association in good faith in order to effectively
contest such claim; and
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iv.
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permit
the Company and the Association to participate in any proceedings
relating
to such claim; provided, however, that the Company and the Association
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest
and
indemnity and hold the Executive harmless, on an after-tax basis,
for any
Excise Tax or related taxes, interest or penalties imposed as a result
of
such representation and payment of costs and expenses. Without limitation
on the foregoing provisions of this Section 15(c), the Company and
the
Association shall control all proceedings taken in connection with
such
contest and, at their option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with
the
taxing authority with respect to such claim and may, at their option,
either direct the Executive to pay the tax claimed and ▇▇▇ for a
refund or
contest the claim in any permissible manner. Further, the Executive
agrees
to prosecute such contest to a determination before any
administrative
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12
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company and the Association shall determine; provided, however,
that if the Company directs the Executive to pay such claim and ▇▇▇ for a
refund, the Company and the Association shall advance the amount of such payment
to the Executive, on an interest-free basis (including interest or penalties
with respect thereto). Furthermore, the Company’s and the Association’s control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to settle
or contest, as the case may be, any other issues raised by the Internal Revenue
Service or any other taxing authority.
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d.
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Adjustments
to the Gross-Up Payment.
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 15(c), the Executive becomes entitled
to
receive any refund with respect to such claim, the Executive shall
(subject to the Company’s compliance with the requirements of Section
15(c)) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after applicable taxes).
If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 15(c), a determination is made that the Executive
shall not be entitled to any refund with respect to such claim and
such
denial of refund occurs prior to the expiration of thirty (30) days
after
such determination, then such advance shall be forgiven and shall
not be
required to be repaid and the amount of such advance shall offset,
to the
extent thereof, the amount of the Gross-Up Payment required to be
paid.
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16.
Injunctive
Relief.
If
there
is a breach or threatened breach of Section 11(g) 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 Association shall be entitled to injunctive relief restraining the 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 the Executive, without limitation, shall be entitled to injunctive relief
to enforce the obligations of the Association under this Agreement.
17.
Successors
and Assigns.
| a. |
This
Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Association 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
Association.
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13
| b. |
Since
the Association is 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 Association.
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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 Association at their principal business offices and to Executive at
his
home address as maintained in the records of the Association.
20. No
Plan Created by this Agreement.
Executive
and the Association 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.
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 herein otherwise
specifically provided.
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 described
in
Sections 5 and 6. Upon
14
execution
of this Agreement, the employment agreement entered into between the parties
on
June 4, 2002, will become null and void.
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.
| a. |
The
Association’s board of directors may terminate Executive’s employment at
any time, but any termination by the Association, 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(d)
hereinabove.
|
| b. |
If
Executive is suspended from office and/or temporarily prohibited
from
participating in the conduct of the Association’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. §1818(e)(3) or (g)(1); the Association’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 Association may in its discretion: (i) pay Executive all or part
of
the compensation withheld while their contract obligations were suspended;
and (ii) reinstate (in whole or in part) any of the obligations which
were
suspended.
|
| c. |
If
Executive is removed and/or permanently prohibited from participating
in
the conduct of the Association’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.
§1818(e)(4) or (g)(1), all obligations of the Association under this
contract shall terminate as of the effective date of the order, but
vested
rights of the contracting parties shall not be
affected.
|
| d. |
If
the Association is in default as defined in Section 3(x)(1) of the
Federal
Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the
Association under this contract shall terminate as of the date of
default,
but this paragraph shall not affect any vested rights of the contracting
parties.
|
| e. |
All
obligations under this contract shall be terminated, except to the
extent
determined that continuation of the contract is necessary for the
continued operation of the Association: (i) by the Director of the
OTS (or
his designee), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act,
12 U.S.C.
§1823(c); or (ii) by the Director of the OTS (or his designee) at
the time
the Director
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15
(or
his
designee) approves a supervisory merger to resolve problems related to the
operations of the Association or when the Association 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.
| f. |
Any
payments made to employees pursuant to this Agreement, or otherwise,
are
subject to and conditioned upon their compliance with 12 U.S.C. §1828(k)
and FDIC regulation 12 C.F.R. Part 359, Golden Parachute and
Indemnification Payments.
|
|
g.
|
Notwithstanding
anything in this Agreement to the contrary, if the Company or the
Association in good faith determines that amounts that, as of the
effective date of the Executive’s termination of employment are or may
become payable to the Executive upon termination of his employment
hereunder are required to be suspended or delayed for six (6) months
in
order to satisfy the requirements of Section 409A of the Internal
Revenue
Code, then the Company or the Association will so advise the Executive,
and any such payments shall be suspended and accrued for six months,
whereupon they shall be paid to the Executive in a lump sum (together
with
interest thereon at the then-prevailing prime
rate).
|
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on the date first set forth
above.
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Attest:
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|||
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/s/
▇▇▇▇▇ ▇▇▇▇▇
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇
|
|
|
Chairman
of the Board of Directors
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|||
|
Witness:
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EXECUTIVE
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||
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
/s/
▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇
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||
|
▇▇▇▇▇
▇. ▇’▇▇▇▇▇▇
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