SEVERANCE AND RELEASE AGREEMENT
THIS SEVERANCE AND RELEASE AGREEMENT (the "Agreement") is made this 9th day
of December 2008 by and between Xxxx X. Xxxx (the "Employee") and Valley Bank
(the "Bank"), a commercial bank organized and existing by virtue of the laws of
the State of Connecticut and a wholly-owned subsidiary of New England
Bancshares, Inc., a Maryland corporation (the "Company"). The Company and the
Bank are sometimes collectively referred to herein as the Employers.
W I T N E S S E T H:
WHEREAS, the Employee currently serves as an officer of the Bank; and
WHEREAS, the Employee currently is a party to a change in control agreement
with the Bank, dated as of November 21, 2006 (the "Change in Control
Agreement"); and
WHEREAS, the Employers and Employee have had discussions with respect to
the termination of Employee's employment and the payments the Employers would
agree to make pursuant to such termination;
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and intending to be legally bound, the parties agree as
follows:
1. Termination of Employment and Change in Control Agreement.
Effective as of December 26, 2008 (the "Date of Termination"),
the Employee shall no longer be an officer or employee of the
Employers and shall be deemed to have resigned as an officer and
employee of the Employers. The Change in Control Agreement, by
mutual agreement of the parties hereto, shall be terminated and
be of no further force and effect as of the Date of Termination
and the Executive shall be entitled to the rights and payments
set forth herein in lieu of any rights and payments under the
Change in Control Agreement and the Employer's severance plan.
2. Payments and Benefits to the Employee.
(a) The Employers agree to pay the Employee an amount equal to
the annual rate of $165,000 in accordance with customary payroll
practices, until the earlier of: (i) the date the Employee
commences full-time employment (full-time shall mean a minimum of
thirty-five (35) hours a week) with a subsequent employer, or
(ii) twelve months following the Date of Termination. The
Employee agrees to notify the Employers in the event he accepts
full-time employment with a new employer.
(b) The Employers agree to maintain and provide continued life
insurance and non-taxable health and dental insurance coverage
which Employee participated in as of the Date of Termination for
a period ending the earlier of (i) twelve (12) months following
the Date of Termination or (ii) the date of the Employee's
full-time employment (full-
time shall mean a minimum of thirty-five (35) hours a week) by
another employer (provided that the Employee is entitled under
the terms of such employment to benefits substantially similar to
those described in Schedule A attached hereto) and such coverage
shall be provided under the same terms and conditions in effect
on the Date of Termination. Schedule A attached hereto provides a
description of the life insurance and non-taxable health and
dental insurance coverage that the Employee participated in as of
the Date of Termination, and the amount of his premium cost
(which may increase to the extent that the premiums increase for
all other employees). The Employee will not be entitled to a
Company car or disability insurance following the Date of
Termination.
(c) The Employers shall have no obligation to make contributions
for service subsequent to the Date of Termination with respect to
its 401(k) Plan or any other retirement or profit sharing plan on
behalf of Employee and Employee shall have no right to
participate in such plans for service after the Date of
Termination. All of Employee's accrued and vested benefits held
under the Employer's 401(k) Plan, or other retirement or benefit
plans as of the Date of Termination shall be available for
distribution which shall be made in the ordinary course of
business in accordance with such plan terms and past practice of
the Employers.
3. Stock Option Plans. It is acknowledged that no additional
arrangements are being provided by the Employers to the Employee
under any of the Employer's stock option plans, and that awards
previously made by the Employers to the Employee which have not
as yet vested under the Option Plans shall not accelerate and are
intended to terminate in accordance with the terms of the Option
Plans.
4. Recognition and Retention Plans. It is acknowledged that no
additional arrangements are being provided by the Employers to
the Employee under any of the Employer's recognition and
retention plans (the "RRPs") and that awards previously made by
the Employers to the Employee which have not as yet vested or
been earned under the RRPs shall not accelerate or be deemed
earned and are intended to be forfeited in accordance with the
terms of the RRPs as of the date hereof.
5. Solicitation of Customers; Use of Customer Lists, etc. The
Employee acknowledges that, except as required by law or in his
own good faith use in any proceeding, he has no right personally
to use or disclose to any person, firm or corporation,
information concerning any customer list, business secrets or
confidential financial information of the Employers that he knew
was intended by the Employers to be confidential and that he did
not have reason to believe had been made public (collectively,
"Confidential Information"). Accordingly, the Employee covenants
and agrees that he shall not use or permit the use of any
Confidential Information, and shall not divulge any Confidential
Information to any person, firm or corporation, except as may be
required by applicable law arising out of his employment with or
participation in the affairs of the Employers.
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Further, Employee agrees that he will not solicit any current
customer of the Employers, for a period of twelve (12) months
from the Date of Termination for the purpose or intent to provide
or sell to such customers any banking, financial or business
services or products on behalf of any person, company or entity
other than the Employers without the express written consent of
the Employers.
6. Confidentiality; Non-Disparagement.
(a) No disclosure of the contents of this Agreement shall be made
by either party to this Agreement without the prior written
consent of the other party; provided that such disclosure
(including disclosures contained in Company press releases and
regulatory filings) may be made as required in accordance with
federal securities law and regulations.
(b) Employee agrees not to make, either directly or indirectly,
or cause to be made, either directly or indirectly, by any other
person or entity, any statement or comment, whether oral,
written, electronic or otherwise, or to take any other action
which disparages or criticizes the Employers, their present or
former directors, officers, employees, management, practices or
services, or which disrupts or impairs or could disrupt or impair
the operations of the Employers, where such statements, comments
or actions are based upon the Employee's employment by the
Employers, either as a director, officer or employee, or
knowledge gained as a result of such employment. The Employers
agree not to make, either directly or indirectly, or cause to be
made, either directly or indirectly, by any other person or
entity, or permit to be made by any director, officer, employee
or representative of the Employers, any statement or comment,
whether oral, written, electronic or otherwise, or to take any
other action which disparages or criticizes the Employee where
such statements, comments or actions are based upon the
Employee's employment by the Employers, either as a director,
officer or employee.
(c) Each of the Employers and the Employee covenants and agrees
that upon any adjudication that such party has violated the terms
of this Section 6, the party asserting such a violation shall be
entitled to seek and be awarded damages together with such
party's costs, reasonable attorneys' fees and expenses in
connection with enforcing the terms hereof.
7. Release of the Employers and Related Parties.
(a) In consideration of the payments and benefits to be provided
to the Employee pursuant to this Agreement, the sufficiency of
which is acknowledged hereby, Employee, with the intention of
binding himself and his heirs, executors, administrators and
assigns, does hereby release, remise, acquit and forever
discharge the Company and its subsidiaries and affiliates (the
"Company Affiliated Group"), their present and
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former officers, directors, executives, agents, attorneys and
employees, and the successors, predecessors and assigns of each
of the foregoing (collectively, the "Company Released Parties"),
of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of
money, accounts, financial obligations, suits, expenses,
attorneys' fees and liabilities of whatever kind or nature in
law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known or unknown,
suspected or unsuspected, which Employee, individually or as a
member of a class, now has, owns or holds, or has at any time
heretofore had, owned or held, against any Company Released Party
in any capacity, including, without limitation, any and all
claims (i) arising out of or in any way connected with Employee's
service to any member of the Company Affiliated Group (or the
predecessors thereof) in any capacity, or the termination of such
service in any such capacity, (ii) for severance or vacation
benefits, unpaid wages, salary or incentive payments, (iii) for
breach of contract, wrongful discharge, impairment of economic
opportunity, defamation, intentional infliction of emotional harm
or other tort, (iv) for any violation of applicable state and
local labor and employment laws (including, without limitation,
all laws concerning unlawful and unfair labor and employment
practices) and (v) for employment discrimination under any
applicable federal, state or local statute, provision, order or
regulation, and including, without limitation, any claim under
Title VII of the Civil Rights Act of 1964 ("Title VII"), the
Civil Rights Act of 1988, the Fair Labor Standards Act, the
Americans with Disabilities Act ("ADA"), the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the Age
Discrimination in Employment Act ("ADEA") and any similar or
analogous state statute, excepting only:
(A) the rights of Employee (i) relating to vested stock
options, if any, (collectively, the "Equity Arrangements") and
(ii) as a stockholder of the Company;
(B) the right of Employee to receive COBRA continuation
coverage in accordance with applicable law;
(C) rights to indemnification Employee may have under (i)
applicable corporate law, (ii) the articles of incorporation,
charter or bylaws of any Company Released Party, (iii) any other
agreement between Employee and a Company Released Party, or (iv)
as an insured under any director's and officer's liability
insurance policy now or previously in force;
(D) claims for benefits under any health, disability,
retirement, life insurance or other similar "employee benefit
plan" (within the meaning of Section 3(3) of ERISA) of the
Company Affiliated Group (the "Company Benefit Plans");
(E) the rights of Employee under this Agreement.
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(b)Employee acknowledges and agrees that the release of claims
set forth in this Section 7 is not to be construed in any way as
an admission of any liability whatsoever by any Company Released
Party, any such liability being expressly denied.
(c) The release of claims set forth in this Section 7 applies to
any relief no matter how called, including, without limitation,
wages, back pay, front pay, compensatory damages, liquidated
damages, punitive damages, damages for pain or suffering, costs,
and attorney's fees and expenses.
(d)Employee specifically acknowledges that his acceptance of the
terms of the release of claims set forth in this Section 7 is,
among other things, a specific waiver of his rights, claims and
causes of action under Title VII, ADEA, ADA and any state or
local law or regulation in respect of discrimination of any kind.
(e) Employee shall have a period of 21 days to consider whether
to execute this Agreement. To the extent Employee has executed
this Agreement within less than twenty-one (21) days after its
delivery to him, the Employee hereby acknowledges that his
decision to execute this Agreement prior to the expiration of
such twenty-one (21) day period was entirely voluntary. If
Employee accepts the terms hereof and executes this Agreement, he
may thereafter, for a period of 7 days following (and not
including) the date of execution, revoke this Agreement. If no
such revocation occurs, this Agreement shall become irrevocable
in its entirety, and binding and enforceable against Employee, on
the day next following the day on which the foregoing seven-day
period has elapsed. Any revocation of this Agreement shall be
deemed for all purposes a revocation of this Agreement in its
entirety.
(f) Employee acknowledges and agrees that he has not, with
respect to any transaction or state of facts existing prior to
the date hereof, filed any complaints, charges or lawsuits
against any Company Released Party with any governmental agency,
court or tribunal.
(g)In addition to any other remedy available to the Employers
hereunder, in the event that, as a result of a challenge brought
by an Employee Released Party (as defined below), the release of
claims set forth in Section 7 becomes null and void or is
otherwise determined not to be enforceable, then the Employers'
obligation to make any additional payments or to provide any
additional benefits this Agreement shall immediately cease to be
of any force and effect, and Employee shall promptly return to
the Employers any payments or benefits the provision of which by
the Employers was conditioned on the enforceability of this
Agreement.
8. Release of Claims by the Employers.
(a) The Employers, with the intention of binding themselves and
their subsidiaries, affiliates, predecessors and successors and
their directors and officers (collectively, the
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"Releasing Entities"), do hereby release, remise, acquit and
forever discharge Employee and his heirs, estate, executors,
administrators and assigns (collectively, the "Employee Released
Parties"), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts,
sums of money, accounts, financial obligations, suits, expenses,
attorneys' fees and liabilities of whatever kind or nature in
law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known or unknown,
suspected or unsuspected, which the Employers and their
subsidiaries, affiliates, predecessors and successors,
individually or as a member of a class, now have, own or hold, or
have at any time heretofore had, owned or held, against any
Employee Released Party, excepting only:
(A) rights of the Releasing Entities under this Agreement,
the Change in Control Agreement, the Equity Arrangements and the
Company Benefit Plans; and
(B) rights of the Releasing Entities arising by reason of
Employee having committed a crime or an act or omission to act
which constitutes fraud, willful misconduct or gross negligence
(except gross negligence shall not include an act or omission to
act which was (i) in compliance with Bank's written policies in
effect as of the time of the act or omission to act, (ii) entered
into in accordance with customary practices of the Bank, or (iii)
made in connection with a purchase by Bank of auction rate
securities from Xxxxxxx Xxxxx & Co., Inc. during the time the
Employee was employed by the Bank).
(b) The Releasing Entities acknowledge and agree that the release
of claims set forth in this Section 8 is not to be construed in
any way as an admission of any liability whatsoever by any
Employee Released Party, any such liability being expressly
denied.
(c) The release of claims set forth in this Section 8 applies to
any relief no matter how called, including, without limitation,
compensatory damages, liquidated damages, punitive damages,
damages for pain or suffering, costs, and attorney's fees and
expenses.
(d) Nothing herein shall be deemed, nor does anything contained
herein purport, to be a waiver of any right or claim or cause of
action which by law the Employers are not permitted to waive.
(e) The Employers acknowledge and agree that they have not, with
respect to any transaction or state of facts existing prior to
the date hereof, filed any complaints, charges or lawsuits
against any Employee Released Party with any governmental agency,
court or tribunal.
9. Non-Competition. During the period the Employee is receiving cash
severance pursuant to Section 2(a) of this Agreement, the
Employee shall not serve as an officer, director, consultant or
employee of any bank holding company, bank, savings bank, savings
and
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loan holding company, or mortgage company (any of which, a
"Financial Institution") which Financial Institution offers
products or services competing with those offered by the
Employers or any of their affiliates, including Enfield Federal
Savings and Loan Association, from any office within ten (10)
miles from the main office or any branch of the Employers or any
of their affiliates, including Enfield Federal Savings and Loan
Association, and shall not interfere with the relationship of the
Employers or any of their affiliates, including Enfield Federal
Savings and Loan Association, and any of its employees, agents,
or representatives.
10. Termination and Board Membership. To the extent Employee is a
member of the board of directors of the Company or the Bank or
any of their affiliates on the Date of Termination, Employee
shall be deemed to have automatically resigned from all of the
boards of directors immediately preceding such termination of
employment with the Company or the Bank or any of their
affiliates.
11. Representation. The Employers and the Employee represent that
they have reviewed this Agreement, and that each of them is fully
aware of the content of this Agreement and of its legal effect,
and acknowledge that this is a legally valid and binding
obligation of the parties.
12. Withholding. The Employers may make such provisions as they deem
appropriate for the withholding pursuant to federal or state
income tax laws of such amounts as the Employers determine they
are required to withhold in connection with the payments to be
made pursuant to this Agreement.
13. Amendment and Waiver. The terms of this Agreement may not be
modified other than in a writing signed by the parties. No term
or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against enforcement of
any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written
waiver shall be deemed a continuing waiver unless specifically
stated therein, and each such waiver shall operate only as to the
specific term or condition for the future or as to any act other
than that specifically waived.
14. Notices. All notices, demands, consents or other communication
required or permitted hereunder shall be in writing and shall be
deemed to have been given when: (i) personally delivered, or (ii)
sent postage prepaid by registered or certified mail, return
receipt requested, such receipt showing delivery to have been
made, or (iii) sent overnight by prepaid receipt courier
addressed as follows:
If to the Employee: Xxxx X. Xxxx
At his last address on file with
the Employer
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If to the Employers: Valley Bank
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. X'Xxxxxx
President and Chief Executive Officer
15. Entire Agreement. This Agreement incorporates the entire
understanding among the parties relating to the subject matter
hereof, recites the sole consideration for the promises exchanged
and supersedes any prior agreements between the Employers and the
Employee with respect to the subject matter hereof. In reaching
this Agreement, no party has relied upon any representation or
promise except those set forth herein.
16. Invalid Provisions: If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall
be fully severable and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Agreement, and the remaining
provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its deletion from this Agreement.
17. Bind and Inure. This Agreement shall be binding upon and inure to
the benefit of the Employee and the Employers and their
respective heirs and/or successors and permitted assigns.
18. Governing Law. This Agreement shall be governed by and construed
the laws of the State of Connecticut, except to the extent
preempted by the laws of the United States of America.
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by
their duly authorized representatives and the Employee has executed this
Agreement, all as of the day and year first written above.
VALLEY BANK
By: /s/ Xxxxx X. Xxxxx
--------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman
EMPLOYEE
By: /s/ Xxxx. X. Xxxx
---------------------------
Xxxx X. Xxxx
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Appendix A
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1) FAMILY MEDICAL INSURANCE COVERAGE -
EMPLOYEE PREMIUM: $383.04 PER MONTH
2) FAMILY DENTAL INSURANCE COVERAGE -
EMPLOYEE PREMIUM: $44.80 PER MONTH
3) LIFE INSURANCE COVERAGE (EXECUTIVE, SPOUSE & CHILDREN) -
EMPLOYEE PREMIUM: $0.00
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