NEWMIL BANK AMENDED DIRECTOR DEFERRED COMPENSATION AGREEMENT
Exhibit
10.14
NEWMIL
BANK
This
Amended Director Deferred Compensation Agreement
(this
“Amended Agreement”) is made as of this 20th
day of
December, 2005, by and between NewMil Bank, a Connecticut-chartered savings
bank
(the “Bank”), and ▇▇▇▇▇ ▇. ▇▇▇▇▇, a director of the Bank (the
“Director”).
Whereas,
to
encourage the Director to remain a member of the Bank’s board of directors, the
Bank wishes to continue providing a deferred compensation opportunity to the
Director,
Whereas,
the
Bank will pay the Director’s benefits from the Bank’s general
assets,
Whereas,
the
Director and the Bank are parties to a January 23, 2002 Director Deferred
Compensation Agreement,
Whereas,
the Bank
and the Director intend that this Amended Agreement supersede and replace in
its
entirety the January 23, 2002 Director Deferred Compensation Agreement, which
agreement shall become void and of no further force or effect on the date this
Amended Agreement becomes effective, and
Whereas,
the
deferral account balance under the January 23, 2002 Director Deferred
Compensation Agreement that exists as of the date this Amended Agreement becomes
effective shall become the initial deferral account balance under this Amended
Agreement.
Now
Therefore,
in
consideration of these premises and other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the Director and
the
Bank hereby agree as follows.
ARTICLE
1
DEFINITIONS
Whenever
used in this Agreement, the following words and phrases shall have the meanings
specified.
1.1 “Beneficiary”
means
each designated person, or the estate of the deceased Director, entitled to
benefits, if any, upon the death of the Director, determined according to
Article 6.
1.2 “Beneficiary
Designation Form”
means
the form established from time to time by the Plan Administrator that the
Director completes, signs, and returns to the Plan Administrator to designate
one or more Beneficiaries.
1.3 “Change
in Control”
shall
mean any one of the following events occurs, provided the event constitutes
a
change in control within the meaning of Internal Revenue Code section 409A
and
rules, regulations, and guidance of general application thereunder issued by
the
Department of the Treasury, and provided the occurrence of the event is
objectively determinable and does not require the exercise of judgment or
discretion on the part of the Plan Administrator or any other person
-
(a) Change
in Ownership:
a
change in ownership of NewMil Bancorp, Inc., a Delaware corporation of which
the
Bank is a wholly owned subsidiary, occurs on the date any one person or group
accumulates ownership of NewMil Bancorp, Inc.’s stock constituting more than 50%
of the total fair market value or total voting power of NewMil Bancorp, Inc.’s
stock,
(b) Change
in Effective Control:
(1) any
one person, or more than one person acting as a group, acquires within a
12-month period ownership of stock of NewMil Bancorp, Inc. possessing 35% or
more of the total voting power of NewMil Bancorp, Inc.’s stock, or (2) a
majority of NewMil Bancorp, Inc.’s board of directors is replaced during any
12-month period by directors whose appointment or election is not endorsed
in
advance by a majority of NewMil Bancorp, Inc.’s board of directors,
or
(c) Change
in Ownership of a Substantial Portion of Assets:
a
change in the ownership of a substantial portion of NewMil Bancorp, Inc.’s
assets occurs on the date any one person, or more than one person acting as
a
group, acquires assets from NewMil Bancorp, Inc. having a total gross fair
market value equal to or exceeding 40% of the total gross fair market value
of
all of the assets of NewMil Bancorp, Inc. immediately before the acquisition
or
acquisitions. For this purpose, gross fair market value means the value of
NewMil Bancorp, Inc.’s assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the
assets.
For
purposes of paragraphs (a) through (c) of this Section 1.3, persons shall be
considered to be acting as a group if they would be considered to be acting
as a
group under Internal Revenue Code section 409A and rules, regulations, and
guidance of general application issued thereunder by the Department of the
Treasury. References in this Agreement to Internal Revenue Code section 409A
include rules, regulations, and guidance of general application issued by the
Department of the Treasury under section 409A.
1.4 “Code”
means
the Internal Revenue Code of 1986, as amended.
1.5 “Compensation”
means
the total directors’ fees payable to the Director during a Plan
Year.
1.6 “Deferral
Account”
means
the Bank’s accounting of the Director’s accumulated Deferrals, plus accrued
interest.
1.7 “Deferrals”
means
the amount of the Director’s Compensation that the Director elects to defer
according to this Amended Agreement, and includes all amounts deferred by the
Director under the terms of the January 23, 2002 Director Deferred Compensation
Agreement.
2
1.8 “Disability”
means
the Director’s inability to perform substantially all normal duties of a
director, as determined by the Bank’s Board of Directors in its sole discretion.
As a condition to any benefits, the Bank may require the Director to submit
to
such physical or mental evaluations and tests as the Board of Directors deems
appropriate.
1.9 “Effective
Date”
means
December 20, 2005.
1.10 “Election
Form”
means
the Form attached as Exhibit 1.
1.11 “Normal
Retirement Age”
means
the Director’s 65th
birthday.
1.12 “Normal
Retirement Date”
means
the later of the Normal Retirement Age or Separation from Service.
11.3 “Plan
Administrator”
means
the plan administrator described in Article 8.
1.14 “Plan
Year”
means
the calendar year.
1.15 “Separation
from Service”
means
the Director’s service as a director, executive, or independent contractor to
the Bank and any member of a controlled group, as defined in Code section 414,
terminates for any reason, other than because of a leave of absence approved
by
the Bank or the Director’s death. For purposes of this Amended Agreement, if
there is a dispute about the Director’s status or the date of the Director’s
Separation from Service, the Bank shall have the sole and absolute right to
decide the dispute unless a Change in Control shall have occurred.
1.16 “Termination
for Cause”
means
the Bank’s board of directors or a duly authorized committee of the board of
directors determines at any time that the Director will not be nominated by
the
board or committee for reelection as a director of NewMil Bancorp, Inc. after
the expiration of his current term, or if the Director is removed as a director
of the Bank, in either case because of the Director’s -
(a) Gross
negligence or gross neglect of duties,
(b) Commission
of a felony or commission of a misdemeanor involving moral
turpitude,
(c) Fraud,
disloyalty, or willful violation of any law or significant Bank policy,
or
(d) Removal
from service or permanent prohibition from participation in the Bank’s affairs
by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act [ 12 U.S.C. 1818(e)(4) or (g)(1)].
1.17 “Unforeseeable
Emergency”
means
a
severe financial hardship to the Director resulting from illness or accident
of
the Director, the Director’s spouse, or a dependent of the Director, loss of the
Director’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the Director’s
control.
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ARTICLE
2
DEFERRAL
ELECTION
2.1 Initial
Election.
The
Director’s election under the January 23, 2002 Director Deferred Compensation
Agreement in effect on the Effective Date of this Amended Agreement shall remain
in full force and effect under this Amended Agreement until changed in
accordance with this Amended Agreement.
2.2 Election
Changes.
With
the Bank’s approval, the Director may modify the amount of Compensation to be
deferred by filing a new Election Form with the Bank before the beginning of
the
Plan Year in which the Compensation is to be deferred. The modified deferral
election shall not be effective until the calendar year after the year in which
the new Election Form is received and approved by the Bank. A change in the
Director’s election to receive benefits either in a lump-sum form or in
installments shall not be effective unless (a) it is submitted at least one
year
before benefits would otherwise commence or be paid, (b) it does not take effect
until at least 12 months elapse, and (c) the first benefit payment is delayed
for at least an additional five years beyond the date the payment otherwise
would have been made.
ARTICLE
3
DEFERRAL
ACCOUNT
3.1 Establishing
and Crediting.
The
Bank shall establish a Deferral Account on its books for the Director and shall
credit to the Deferral Account the following amounts:
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3.1.1
|
Account
Balance under the January 23, 2002 Director Deferred Compensation
Agreement.
The Deferral Account balance that exists under the January 23, 2002
Director Deferred Compensation
Agreement.
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3.1.2
|
Deferrals.
The portion of the Compensation deferred by the Director as of the
time
the Compensation would have otherwise been paid to the
Director.
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3.1.3
|
Interest.
Interest shall be credited on the account balance at a rate of interest,
compounded monthly, equal to the monthly average yield on United
States
Treasury securities adjusted to a constant maturity of five years
as
published by the Board of Governors of the Federal Reserve System
in
statistical release H.15 (the “Index”). Until commencement of benefit
payments under this Amended Agreement, interest shall be credited
on the
account balance for a Plan Year at the end of the Plan Year, based
upon
the Index during the month of December for the Plan
Year.
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3.2 Statement
of Accounts.
Within
120 days after the end of each Plan Year, the Bank shall provide to the Director
a statement setting forth the Deferral Account balance.
3.3 Accounting
Device Only.
The
Deferral Account is solely a device for measuring amounts to be paid under
this
Amended Agreement. The Deferral Account is not a trust fund of any kind. The
Director is a general unsecured creditor of the Bank for the payment of
benefits. The benefits represent the mere promise by the Bank to pay such
benefits. The Director’s rights are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by the Director’s creditors.
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ARTICLE
4
BENEFITS
DURING LIFETIME
4.1 Normal
Retirement Benefit.
Upon
the Normal Retirement Date, the Bank shall pay to the Director the benefit
described in this Section 4.1 instead of any other benefit under this Amended
Agreement.
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4.1.1
|
Amount
of Benefit.
The benefit under this Section 4.1 is the Deferral Account balance
at the
Director’s Normal Retirement Date.
|
|
4.1.2
|
Payment
of Benefit.
The Bank shall pay the benefit to the Director in the form elected
by the
Director in the Election Form, beginning with the month after the
Director’s Normal Retirement Date. If the Director elects payment of the
benefit as other than a lump sum, the Bank will continue to credit
interest according to the formula of Section 3.1.3, compounded monthly,
on
the remaining account balance during any applicable installment
period.
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4.2 Early
Termination Benefit.
Upon
Separation from Service before the Normal Retirement Age for reasons other
than
death, Change in Control, or Disability, the Bank shall pay to the Director
the
benefit described in this Section 4.2 instead of any other benefit under this
Amended Agreement.
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4.2.1
|
Amount
of Benefit.
The benefit under this Section 4.2 is the Deferral Account balance
at the
Director’s Separation from Service.
|
|
4.2.2
|
Payment
of Benefit.
The Bank shall pay the benefit to the Director in the form elected
by the
Director in the Election Form, beginning with the month after the
Director’s Normal Retirement Age. If the Director elects payment of the
benefit as other than a lump sum, the Bank will continue to credit
interest according to the formula of Section 3.1.3, compounded monthly,
on
the remaining account balance during any applicable installment
period.
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4.3 Disability
Benefit.
If the
Director terminates service because of Disability before the Normal Retirement
Age, the Bank shall pay to the Director the benefit described in this Section
4.3 instead of any other benefit under this Amended Agreement.
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4.3.1
|
Amount
of Benefit.
The benefit under this Section 4.3 is the Deferral Account balance
at the
Director’s Separation from Service.
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4.3.2
|
Payment
of Benefit.
The Bank shall pay the benefit to the Director in the form elected
by the
Director in the Election Form, beginning with the month after the
Director’s Separation from Service. If the Director elects payment of the
benefit as other than a lump sum, the Bank will continue to credit
interest according to the formula of Section 3.1.3, compounded monthly,
on
the remaining account balance during any applicable installment
period.
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4.4 Change
in Control Benefit.
If a
Change in Control occurs after the date of this Amended Agreement, the Bank
shall pay to the Director the benefit described in this Section 4.4 instead
of
any other benefit under this Amended Agreement and the Bank shall exercise
its
discretion to terminate this Amended Agreement.
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4.4.1
|
Amount
of Benefit.
The benefit under this Section 4.4 is the Deferral Account balance
on the
date of the Change in Control.
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4.4.2
|
Payment
of Benefit.
The Bank shall pay the benefit to the Director in a single lump sum
within
three days after the Change in Control. Payment of the Change-in-Control
benefit shall fully discharge the Bank from all obligations under
this
Agreement, except the legal fee reimbursement obligation under Section
9.11.
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4.5 Payout
of Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit
after a Change in Control.
If a
Change in Control occurs when the Director is receiving benefits provided by
Sections 4.1, 4.2, or 4.3 of this Amended Agreement, the Bank shall pay the
remaining benefits to the Director in a single lump sum within three days after
the Change in Control. The lump-sum payment shall be an amount equal to the
Director’s Deferral Account balance remaining unpaid.
4.6 Hardship
Distribution.
If the
Director suffers an Unforeseeable Emergency and petitions for a hardship
distribution, the Bank shall distribute to the Director all or a portion of
the
Deferral Account balance as necessary solely to satisfy the emergency (plus
additional amounts necessary to pay taxes anticipated as a result of the
emergency), but only to the extent the emergency is not relieved through
reimbursement or compensated for by insurance or liquidation of the Director’s
assets.
4.7 One
Benefit Only.
Notwithstanding anything to the contrary contained in this Amended Agreement,
the Director and his Beneficiary are entitled to one benefit only under this
Amended Agreement, which shall be determined by the first event to occur that
is
dealt with by this Amended Agreement. Except as provided in Section 4.5,
subsequent occurrence of events dealt with by this Amended Agreement shall
not
entitle the Director or his Beneficiary to other or additional benefits under
this Agreement.
4.8 No
Distribution Sooner Than Is Allowed Under Section 409A. A
Director’s Deferral Account shall be distributed as provided in this Article 4.
Anything in this Amended Agreement or in an Election Form to the contrary
notwithstanding, however, no portion of the Director’s Deferral Account shall be
distributed sooner than is allowed under Code section 409A, including rules,
regulations, and guidance of general applicability issued under section 409A
by
the Treasury Department or the Internal Revenue Service.
4.9 Termination
for Cause.
Notwithstanding any provision of this Amended Agreement to the contrary, the
Bank shall not pay any benefit under this Amended Agreement that exceeds the
Director’s Deferrals (i.e.,
the
deferred compensation account balance under Section 3.1.1 and the amount
deferred under Section 3.1.2, and specifically excluding interest earned on
the
Deferral Account) if Separation from Service is due to the Director’s actions
resulting in Termination for Cause. The Director’s Deferrals shall be paid to
the Director in a manner to be determined by the Bank. No interest shall be
credited to the Deferrals during any applicable installment period.
6
ARTICLE
5
DEATH
BENEFITS
5.1 Death
During Active Service.
If the
Director dies while in the service of the Bank, the Bank shall pay to the
Director’s beneficiary the early termination benefit described in Section 4.2
instead of any other benefit under this Amended Agreement.
5.2 Death
During Payment of a Benefit.
If the
Director dies after any benefit payments have commenced under this Amended
Agreement but before receiving all such payments, the Bank shall pay the
remaining benefits to the Director’s beneficiary in a lump-sum distribution. The
lump-sum distribution shall equal the Director’s Deferral Account as of the time
of death.
5.3 Death
After Separation from Service But Before Benefit Payments
Commence.
If the
Director is entitled to benefit payments under this Amended Agreement but dies
before benefit payments commence, the Bank shall pay to the Director’s
beneficiary the benefits to which the Director was entitled, except that the
benefit payments shall be paid in a lump-sum distribution equal to the
Director’s Deferral Account balance on the first day of the month after the date
of the Director’s death.
ARTICLE
6
BENEFICIARIES
6.1 Beneficiary
Designations.
The
Director shall have the right to designate at any time a Beneficiary to receive
any benefits payable under this Amended Agreement upon the Director’s death. The
Beneficiary designated under this Amended Agreement may be the same as or
different from the beneficiary designation under any other benefit plan of
the
Bank in which the Director participates. The Director shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form and
delivering it to the Plan Administrator or its designated agent. The Director’s
Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Director or if the Director names a spouse as Beneficiary and
the marriage is subsequently dissolved.
6.2 Beneficiary
Designation Change.
The
Director shall have the right to change a Beneficiary by completing, signing,
and otherwise complying with the terms of the Beneficiary Designation Form
and
the Plan Administrator’s rules and procedures, as in effect from time to time.
Upon the acceptance by the Plan Administrator of a new Beneficiary Designation
Form, all Beneficiary designations previously filed shall be cancelled. The
Plan
Administrator shall be entitled to rely on the last Beneficiary Designation
Form
filed by the Director and accepted by the Plan Administrator before the
Director’s death.
6.3 Acknowledgment.
No
designation or change in designation of a Beneficiary shall be effective until
received, accepted, and acknowledged in writing by the Plan Administrator or
its
designated agent.
6.4 No
Beneficiary Designation.
If the
Director dies without a valid beneficiary designation, or if all designated
Beneficiaries predecease the Director, then the Director’s spouse shall be the
designated Beneficiary. If the Director has no surviving spouse, the benefits
shall be made to the personal representative of the Director’s
estate.
7
6.5 Facility
of Payment.
If a
benefit is payable to a minor, to a person declared incapacitated, or to a
person incapable of handling the disposition of his or her property, the Bank
may pay such benefit to the guardian, legal representative, or person having
the
care or custody of the minor, incapacitated person, or incapable person. The
Bank may require proof of incapacity, minority, or guardianship as it may deem
appropriate before distribution of the benefit. Distribution shall completely
discharge the Bank from all liability for the benefit.
ARTICLE
7
CLAIMS
AND REVIEW PRICEDURES
7.1 Claims
Procedure.
Within
90 days, the Bank shall notify in writing any person or entity that makes a
written claim for benefits under this Amended Agreement (the “Claimant”) of the
Claimant’s eligibility or noneligibility for benefits. If the Bank determines
that the Claimant is not eligible for benefits or full benefits, the notice
shall state (a) the specific reasons for such denial, (b) a specific reference
to the provisions of this Amended Agreement on which the denial is based, (c)
a
description of any additional information or material necessary for the Claimant
to perfect his or her claim, and a description of why it is needed, and (d)
an
explanation of this Amended Agreement’s claims review procedure and other
appropriate information concerning the steps to be taken if the Claimant wishes
to have the claim reviewed. If the Bank determines that there are special
circumstances requiring additional time to make a decision, the Bank shall
notify the Claimant of the special circumstances and the date by which a
decision is expected to be made, and may extend the time for up to an additional
90 days.
7.2 Review
Procedure.
If the
Claimant is determined by the Bank not to be eligible for benefits, or if the
Claimant believes that he or she is entitled to greater or different benefits,
the Claimant shall have the opportunity to have the claim reviewed by the Bank
by filing a petition for review with the Bank within 60 days after receipt
of
the Bank’s notice. The petition shall state the specific reasons the Claimant
believes entitle him or her to benefits or to greater or different benefits.
Within 60 days after the Bank’s receipt of the petition, the Bank shall give the
Claimant (and counsel, if any) an opportunity to present his or her position
to
the Bank verbally or in writing, and the Claimant (or counsel) shall have the
right to review the pertinent documents. The Bank shall notify the Claimant
of
the Bank’s decision in writing within the 60-day period, stating specifically
the basis of its decision, written in a manner to be understood by the Claimant,
and the specific provisions of this Amended Agreement on which the decision
is
based. If, because of the need for a hearing, the 60-day period is not
sufficient, the decision may be deferred for up to another 60 days at the
election of the Bank, but notice of this deferral shall be given to the
Claimant.
ARTICLE
8
PLAN
ADMINISTRATION
8.1 Plan
Administrator Duties.
This
Amended Agreement shall be administered by a Plan Administrator consisting
of
the board or such committee or persons as the board shall appoint. The Director
may be a member of the Plan Administrator. The Plan Administrator shall also
have the discretion and authority to (a) make, amend, interpret, and enforce
all
appropriate rules and regulations for the administration of this Amended
Agreement and (b) decide or resolve any and all questions, including
interpretations of this Amended Agreement, as may arise in connection with
the
Amended Agreement.
8
8.2 Agents.
In the
administration of this Amended Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as it sees fit (including
acting through a duly appointed representative) and may from time to time
consult with counsel, who may be counsel to the Bank.
8.3 Binding
Effect of Decisions.
The
decision or action of the Plan Administrator with respect to any question
arising out of or in connection with the administration, interpretation, and
application of the Amended Agreement and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all persons having
any
interest in the Amended Agreement. No Director or Beneficiary shall be deemed
to
have any right, vested or unvested, regarding the continuing effect of any
decision or action of the Plan Administrator.
8.4 Indemnity
of Plan Administrator.
The
Bank shall indemnify and hold harmless the members of the Plan Administrator
against any and all claims, losses, damages, expenses, or liabilities arising
from any action or failure to act with respect to this Amended Agreement, except
in the case of willful misconduct by the Plan Administrator or any of its
members.
8.5 Bank
Information.
To
enable the Plan Administrator to perform its functions, the Bank shall supply
full and timely information to the Plan Administrator on all matters relating
to
the date and circumstances of the retirement, Disability, death, or Separation
from Service of the Director, and such other pertinent information as the Plan
Administrator may reasonably require.
8.6 Conformance
with Section 409A.
At all
times during each Plan Year, this Amended Agreement shall be operated in
accordance with the requirements of Code section 409A, including rules,
regulations, and guidance of general applicability issued under section 409A
by
the Treasury Department or the Internal Revenue Service. Any action that may
be
taken (and, to the extent possible, any action actually taken) by the Plan
Administrator shall not be taken (or shall be void and without effect), if
such
action violates the requirements of section 409A. Any provision in this Amended
Agreement that is determined to violate the requirements of section 409A shall
be void and without effect. In addition, any provision that is required to
appear in this Amended Agreement that is not expressly set forth shall be deemed
to be set forth herein, and the Amended Agreement shall be administered in
all
respects as if such provision were expressly set forth.
ARTICLE
9
MISCELLANEOUS
9.1 Amendment
and Termination.
This
Amended Agreement may be amended or terminated solely by a written agreement
signed by the Bank and by the Director. No amendment shall reduce the amount
credited to the Director’s Deferral Account as of the date the amendment is
adopted. However, the Bank may amend or terminate this Amended Agreement at
any
time if, because of legislative, judicial or regulatory action, continuation
of
the Amended Agreement would (a) cause benefits to be taxable to the Director
before actual receipt, or (b) in the Bank’s judgment, result in significant
financial penalties or other significantly detrimental consequences for the
Bank
(other than the financial impact of paying benefits). The Bank specifically
reserves the right to amend this Amended Agreement as necessary to comply with
Code section 409A, including rules, regulations, and guidance of general
applicability issued under section 409A by the Treasury Department or the
Internal Revenue Service. Except for the case of Termination for Cause, this
Amended Agreement shall not be terminated unless the Deferral Account balance
attributable to the Director’s Deferrals and interest credited on Deferrals is
first paid to the Director or the Director’s Beneficiary.
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9.2 Binding
Effect.
This
Amended Agreement shall bind the Director and the Bank and their beneficiaries,
survivors, executors, administrators, and transferees.
9.3 No
Guarantee of Employment.
This
Amended Agreement is not a contract for services. It does not give the Director
the right to remain a director of the Bank, nor does it interfere with
shareholders’ right to replace the Director. It also does not require the
Director to remain an director nor interfere with the Director’s right to
terminate services at any time.
9.4 Non-Transferability.
Benefits under this Amended Agreement cannot be sold, transferred, assigned,
pledged, attached, or encumbered in any manner.
9.5 Tax
Withholding.
The
Bank shall withhold any taxes that are required to be withheld from the benefits
provided under this Amended Agreement.
9.6 Applicable
Law.
This
Amended Agreement and all rights hereunder shall be governed by the laws of
Connecticut, except to the extent the laws of the United States of America
otherwise require.
9.7 Unfunded
Arrangement.
The
Director and the Beneficiary are general unsecured creditors of the Bank for
the
payment of benefits under this Amended Agreement. The benefits represent the
mere promise by the Bank to pay benefits. The rights to benefits are not subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors. Any insurance on the
Director’s life is a general asset of the Bank to which the Director and the
Beneficiary have no preferred or secured claim.
9.8 Reorganization.
The
Bank shall not merge or consolidate into or with another Bank, or reorganize,
or
sell substantially all of its assets to another Bank, firm, or person unless
such succeeding or continuing Bank, firm, or person agrees to assume and
discharge the obligations of the Bank under this Amended Agreement. Upon the
occurrence of such event, the term “Bank” as used in this Amended Agreement
shall be deemed to refer to the successor or survivor Bank.
9.9 Entire
Agreement.
This
Amended Agreement constitutes the entire agreement between the Bank and the
Director concerning the subject matter hereof. No rights are granted to the
Director under this Amended Agreement other than those specifically set forth.
This Amended Agreement supersedes and replaces in its entirety the Director
Deferred Compensation Agreement dated as of January 23, 2002 between the
Director and the Bank, and from and after the date of this Amended Agreement
the
January 23, 2002 Director Deferred Compensation Agreement shall be of no further
force or effect.
9.10 Tax
Consequences.
The
Bank does not insure or guarantee the tax consequences of payments provided
hereunder for matters beyond its control, and the Director certifies that his
decision to reduce and defer receipt of his compensation is not due to any
reliance upon financial, tax or legal advice given by the Bank, and of its
employees, agents, accountants or legal advisors.
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9.11 Payment
of Legal Fees.
The
Bank is aware that after a Change in Control management of the Bank could cause
or attempt to cause the Bank to refuse to comply with its obligations under
this
Amended Agreement, or could institute or cause or attempt to cause the Bank
to
institute litigation seeking to have this Amended Agreement declared
unenforceable, or could take or attempt to take other action to deny Director
the benefits intended under this Amended Agreement. In these circumstances,
the
purpose of this Amended Agreement would be frustrated. It is the intention
of
the Bank that the Director not be required to incur the expenses associated
with
the enforcement of his rights under this Amended Agreement, whether by
litigation or other legal action, because the cost and expense thereof would
substantially detract from the benefits intended to be granted to the Director
hereunder. It is the intention of the Bank that the Director not be forced
to
negotiate settlement of his rights under this Amended Agreement under threat
of
incurring expenses. Accordingly, if after a Change in Control occurs it appears
to the Director that (a) the Bank has failed to comply with any of its
obligations under this Amended Agreement, or (b) the Bank or any other person
has taken any action to declare this Amended Agreement void or unenforceable,
or
instituted any litigation or other legal action designed to deny, diminish,
or
to recover from the Director the benefits intended to be provided to the
Director hereunder, the Bank irrevocably authorizes the Director from time
to
time to retain counsel of his choice, at the expense of the Bank as provided
in
this Section 9.11, to represent the Director in connection with the initiation
or defense of any litigation or other legal action, whether by or against the
Bank or any director, officer, stockholder, or other person affiliated with
the
Bank, in any jurisdiction. Notwithstanding any existing or previous
attorney-client relationship between the Bank and any counsel chosen by the
Director under this Section 9.11, the Bank irrevocably consents to the Director
entering into an attorney-client relationship with that counsel, and the Bank
and the Director agree that a confidential relationship shall exist between
the
Director and that counsel. The fees and expenses of counsel selected from time
to time by the Director as provided in this section shall be paid or reimbursed
to the Director by the Bank on a regular, periodic basis upon presentation
by
the Director of a statement or statements prepared by such counsel in accordance
with such counsel’s customary practices, up to a maximum aggregate amount of
$100,000, whether suit be brought or not, and whether or not incurred in trial,
bankruptcy, or appellate proceedings. The Bank’s obligation to pay the
Director’s legal fees provided by this Section 9.11 operates separately from and
in addition to any legal fee reimbursement obligation the Bank may have with
the
Director under any separate employment, severance, or other agreement between
the Director and the Bank.
9.12 Severability.
If any
provision of this Amended Agreement is held invalid, such invalidity shall
not
affect any other provision of this Amended Agreement not held invalid, and
each
such other provision shall continue in full force and effect to the full extent
consistent with law. If any provision of this Amended Agreement is held invalid
in part, such invalidity shall not affect the remainder of the provision not
held invalid, and the remainder of such provision together with all other
provisions of this Amended Agreement shall continue in full force and effect
to
the full extent consistent with law.
9.13 Waiver.
A
waiver by either party of any of the terms or conditions of this Amended
Agreement in any one instance shall not be considered a waiver of such terms
or
conditions for the future, or of any subsequent breach thereof. All remedies,
rights, undertakings, obligations, and agreements contained in this Amended
Agreement shall be cumulative, and none of them shall be in limitation of any
other remedy, right, undertaking, obligation or agreement of either
party.
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9.14 Headings.
The
heading in this Amended Agreement are for convenience only and shall not affect
the interpretation or construction of the Amended Agreement or any of its
provisions.
9.15 Notice.
All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid. Unless otherwise changed by notice, notice shall be properly addressed
to the Director if addressed to the address of the Director on the books and
records of the Bank at the time of the delivery of such notice, and properly
addressed to the Bank if addressed to the Board of Directors, NewMil Bank,
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▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
In
Witness Whereof,
the
Director and a duly authorized Bank officer have executed this Amended Director
Deferred Compensation Agreement as of the date first written above.
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DIRECTOR:
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NEWMIL
BANK:
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By:
/s/
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Its:
Chairman, President & CEO
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