AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.7.7
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
September 25, 2007 by and between NewAlliance Bank, a Connecticut savings bank
(the “Bank”), and J. Xxxxxx Xxxxxxx (the “Executive”).
W
I T N E
S S E T H :
WHEREAS,
the
Executive is currently employed as the Executive Vice President, Wealth
Management of the Bank pursuant to an employment agreement between the Bank
and
the Executive originally entered into as of April 1, 2004 and amended and
restated effective January 3, 2006 (the “Employment Agreement”);
WHEREAS,
the Bank
desires to amend and restate the Employment Agreement in order to make changes
to comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), as well as certain other changes;
WHEREAS,
NewAlliance
Bancshares, Inc., a business corporation organized under the laws of the State
of Delaware and the holding company of the Bank (the “Company”), and the Bank
desire to ensure that the Company and the Bank are assured of the continued
availability of the Executive’s services as provided in this Agreement, with the
Bank also referred to herein as the “Employer”; and
WHEREAS,
the
Executive is willing to serve the Bank on the terms and conditions hereinafter
set forth;
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants and conditions
hereinafter set forth, the Employer and the Executive hereby agree as
follows:
SECTION
1. EFFECTIVE
DATE; EMPLOYMENT.
This
Agreement shall
be effective on the date first written above (the “Effective Date”), provided
that all changes intended to comply with Section 409A of the Code, including
without limitation changes to Sections 9, 10 and 11 of the Agreement, shall
be
retroactively effective to January 1, 2005; and provided further that no
retroactive change shall affect the compensation or benefits previously paid
to
the Executive. The Bank agrees to employ the Executive, and the
Executive hereby agrees to such employment, during the period and upon the
terms
and conditions set forth in this Agreement.
SECTION
2. EMPLOYMENT
PERIOD.
(a)
The terms and
conditions of this Agreement shall be and remain in effect during the
period of two years beginning on April 1, 2007 (the “Commencement Date”) and
ending on the second anniversary of the Commencement Date (the
“Initial Term”), plus such extensions, if any, as are provided pursuant to
Section 2(b) hereof (the “Employment Period”).
(c)
Nothing in this
Agreement shall be deemed to prohibit the Employer at any time from terminating
the Executive’s employment during the Employment Period with or without notice
for any reason, provided, however, that the relative rights and
obligations of the Employer and the Executive in the event of any such
termination, including any requirements with respect to prior notice of such
termination, shall be determined under this Agreement.
SECTION
3. DUTIES.
Throughout
the
Employment Period, the Executive shall serve as Executive Vice President, Wealth
Management of the Bank, having such power, authority and responsibility and
performing such duties as are prescribed by or under the Bylaws of the Bank
and
as are customarily associated with such position or, irrespective of the office,
title or other designation, if any, a position with responsibilities and powers
substantially identical to such position with the Bank. During the
Initial Term (and thereafter in the discretion of the Chief Executive Officer),
the Executive shall report directly to the Chief Executive Officer of the Bank.
The Executive shall devote his full business time, attention, skills
and efforts (other than during weekends, holidays, vacation periods, and periods
of illness or leaves of absence and other than as permitted or contemplated
by
Section 7 hereof) to the business and affairs of the Employer and shall
use his best efforts to advance the interests of the
Employer.
2
SECTION
4. CASH
AND OTHER COMPENSATION.
(a)
In consideration
for the services to be rendered by the Executive hereunder, the Employer shall
pay to him a salary of one hundred fifty thousand dollars ($150,000) annually
(“Base Salary”) as of the date of restatement of this Agreement. The
Executive’s Base Salary shall be payable in approximately equal installments in
accordance with the Bank’s customary payroll practices for senior
officers. Base Salary shall include any amounts of compensation
deferred by the Executive under any tax-qualified retirement or welfare benefit
plan or any other deferred compensation arrangement. The Compensation
Committee of the Board of Directors of the Bank (the “Bank Board”) shall review
the Executive’s annual rate of salary at such times during the Employment Period
as it deems appropriate, but not less frequently than once every twelve months,
and may, in its discretion, approve an increase therein. Such review
of Executive’s Base Salary shall take into account not only the Executive’s
performance as well as the Employer’s performance since the date of the last
review conducted pursuant to this Section 4(a) but also shall take into
consideration the salaries of similar situated officers at comparably situated
financial institutions as determined by the Compensation Committee thereof
as
well as any recommendation of the Chief Executive Officer. In
addition to salary, the Executive may receive other cash compensation from
the
Employer for services hereunder at such times, in such amounts and on such
terms
and conditions as the Bank Board may determine from time to time. Any increase
in the Executive’s annual salary shall become the Base Salary of the Executive
for purposes hereof. The Executive’s Base Salary as in effect from
time to time cannot be decreased by the Employer without the Executive’s express
prior written consent.
(b)
Except as
otherwise provided herein, the Executive shall be entitled to participate in
an
equitable manner with all other executive officers of the Employer in
discretionary bonuses to executive officers as authorized by the Bank
Board. No other compensation provided for in this Agreement shall be
deemed a substitute for the Executive’s right to participate in such bonuses
when and as declared by the Bank Board. In connection with the
foregoing, the Executive shall not be entitled to participate in the Bank’s
Executive Short Term Incentive Plan (the “ESTIP”) under the terms
thereof. However, the Employer shall pay the Executive short-term
incentive compensation (the “STIC”) based on the revenue generated and overall
profitability of the Trust, Investment and Insurance Department of the Bank
(the
“Department”). The formula and minimums and maximums for the STIC will be
reviewed on an annual basis by the Compensation Committee of the Bank Board,
and
may be modified by the Compensation Committee, after consultation with the
Executive, to reflect changing conditions or circumstances at the Bank and/or
in
its markets. The Compensation Committee will notify the Executive by
the end of January of each year during the term of this Agreement if any changes
in the formula set forth below will be implemented by the
Employer. The formula for the year ended December 31, 2004 shall be
calculated as follows:
(i) One
percent (1%) of the Department’s gross revenues;
(ii) Five
percent (5%) of the Department’s profit with at least a twenty percent (20%) but
less than twenty-five percent (25%) profit margin; and
(iii) Six
percent of the Department’s profit with at least a thirty percent (30%) profit
margin.
3
The
Department’s
“gross revenues,” “profit” and “profit margins” will be determined based on the
Bank’s profit center accounting practices and principles, as in effect from time
to time for the purpose of this Agreement and other Bank uses.
SECTION
5. EMPLOYEE
BENEFIT PLANS AND PROGRAMS.
(a)
During the Employment Period, the
Executive shall be treated as an employee of the Bank and shall be entitled
to
participate in and receive benefits under any and all qualified or non-qualified
retirement, pension, savings or profit-sharing plans covering employees of
the
Bank (including but not limited to the Company’s Employee Stock Ownership Plan
(the “ESOP”), the Bank’s defined benefit Pension Plan, the Bank’s
401(k) Profit Sharing Plan, the Bank’s Supplemental Executive Retirement Plan
and the Bank’s 2004 Supplemental Executive Retirement Plan and any other similar
plans that may be adopted in the future), any and all group life, health
(including hospitalization, medical and major medical), dental, accident and
long-term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, the STIC, and any incentive
compensation plans or program or any stock benefit plans,) as may from time
to
time be maintained by, or cover employees of, the Bank, in accordance with
the
terms and conditions of such employee benefit plans and programs and
compensation plans and programs and consistent with the Bank’s customary
practices. Nothing paid to the Executive under any such plan or
program will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.
(b) During
the Employment Period, the Bank shall provide the Executive with an expense
allowance (“Expense Allowance”) payable monthly equal to $500 per month to pay
for the costs of an automobile. Such Expense Allowance shall take
into account the federal and state income tax effect on the Executive of receipt
of such allowance. In the event that with respect to a given
calendar year occurring during the term of this Agreement, the Executive
believes that he drove during such year Business Miles (as hereinafter defined)
in excess of the Covered Business Miles (as hereinafter defined) in connection
with the business of the Bank and wishes to seek reimbursement as provided
herein for such excess, within 40 days after the end of such calendar year,
the
Executive shall provide information to the Bank (as well as any additional
information as the Bank may reasonably request in order to review the
Executive’s claim) with respect to the number of miles driven in the such
calendar year in connection with the business of the Bank (“Business
Miles”). In the event the number of Business Miles driven during such
calendar year is determined by the Bank to be more than 3,600 (“Covered Business
Miles”), the Bank will provide the Executive an additional reimbursement for the
Business Miles in excess of the Covered Business Miles at a rate equal to the
standard mileage rate as published by the Internal Revenue Service for the
period in which the excess Business Miles were incurred (“Reimbursement Rate”),
with such reimbursement to be provided no later than March 15 of the year
immediately following the year in which the excess Business Miles were
incurred. The Expense Allowance, the Covered Business Miles and the
Reimbursement Rate shall be reviewed annually by the Compensation Committee
of
the Bank Board and, if increased, shall be reflected in an addendum
hereto. Notwithstanding the foregoing, nothing herein shall be deemed
to impose upon the Bank or obviate the Executive’s obligation, legal or
otherwise, to maintain liability insurance with respect to the Executive’s
personal use of an automobile.
4
(c)
The Bank shall
provide and pay for a parking space for Executive in the Bank’s main office
parking garage or, if such space shall become unavailable due to tenant
commitments or otherwise, in an alternative convenient closed parking
garage.
(d)
The Executive
shall be entitled to paid holidays and paid vacations consistent with the Bank’s
policy for executive officers.
(e)
The Bank shall
provide during the term of this Agreement, subject to the limitations set forth
herein, for the Executive to receive, at the Employer’s expense, the services of
a tax professional and a personal financial planning professional (which may
be
the same person or entity for both services) (the “Tax Service Professional”)
selected by the Employer and reasonably satisfactory to the
Executive. Subject to the limitations set forth herein, if the
Employer does not specify a Tax Services Professional reasonably acceptable
to
the Executive, the Executive will be entitled to use the services of a Tax
Services Professional of his choosing and seek reimbursement by the Employer
for
the reasonable cost of such Tax Service Professional actually incurred by the
Executive. The services to be provided shall include (i) the
preparation of all required federal, state and local personal income tax
returns, (ii) advice with respect to federal, state and local income tax
treatment of cash and other forms of compensation paid to the Executive by
the
Employer and (iii) investment and retirement counseling and estate
planning. Notwithstanding the foregoing, the annual cost to the
Employer of providing the services to the Executive of such Tax Service
Professional, whether such Tax Service Professional is selected by the Employer
or the Executive, shall not exceed $2,000 (the “Annual Cost”), prior to any
adjustment for income tax effects of reimbursement for such
expense. Reimbursement of the Executive for the Annual Cost shall
take into account the federal and state income tax effect on the Executive
of
receipt of such Annual Cost, and such reimbursement shall be paid promptly
by
the Employer and in any event no later than March 15 of the year immediately
following the year in which the Annual Cost was incurred. The Annual
Cost shall be reviewed annually by the Compensation Committee of the Bank Board
and, if increased, shall be reflected in an addendum hereto.
SECTION
6. INDEMNIFICATION
AND INSURANCE.
(a)
During the
Employment Period and for a period of six years thereafter, the Employer shall
cause the Executive to be covered by and named as an insured under any policy
or
contract of insurance obtained by it to insure its directors and officers
against personal liability for acts or omissions in connection with service
as
an officer or director of the Employer or service in other capacities at the
request of the Employer. The coverage provided to the Executive
pursuant to this Section 6 shall be of the same scope and on the same terms
and
conditions as the coverage (if any) provided to other officers or directors
of
the Employer or any successors.
(b)
To the maximum
extent permitted under applicable law, the Employer shall indemnify the
Executive against and hold the Executive harmless from any costs, liabilities,
losses and exposures that may be incurred by the Executive in his
capacity as a director or officer of the Employer or any subsidiary or
affiliate.
5
SECTION
7. OUTSIDE
ACTIVITIES.
The
Executive may (a)
serve as a member of the boards of directors of such business, community and
charitable organizations as the Executive may disclose to and as may be approved
by the Employer (which approval shall not be unreasonably withheld), and (b)
perform duties as a trustee or personal representative or in any other fiduciary
capacity, provided that in each case such service shall not materially
interfere with the performance of the Executive’s duties under this Agreement or
present any conflict of interest. The Executive may also engage in
personal business and investment activities which do not materially interfere
with the performance of the Executive’s duties hereunder, provided that
such activities are not prohibited under any code of conduct or investment
or
securities trading policy established by the Employer and generally applicable
to all similarly situated executives. If the Executive is discharged or
suspended, or is subject to any regulatory prohibition or restriction with
respect to participation in the affairs of the Bank, the Executive shall not
directly or indirectly provide services to or participate in the affairs of
the
Bank in a manner inconsistent with the terms of such discharge or suspension
or
any applicable regulatory order.
SECTION
8. WORKING
FACILITIES AND EXPENSES.
It
is understood by
the parties that the Executive’s principal place of employment shall be at the
Bank’s principal executive office located in New Haven, Connecticut, or at such
other Bank Board approved location within 50 miles of the address of such
principal executive office, or at such other location as the Employer and the
Executive may mutually agree upon. The Employer shall provide the
Executive at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to
his
position with the Employer and necessary or appropriate in connection with
the
performance of his assigned duties under this Agreement. The Employer
shall reimburse the Executive for his ordinary and necessary business expenses
attributable to the Employer’s business, including, without limitation, the
Executive’s travel and entertainment expenses incurred in connection with the
performance of his duties for the Employer under this Agreement, in each case
upon presentation to the Employer of an itemized account of such expenses in
such form as the Employer may reasonably require, and such reimbursement shall
be paid promptly by the Employer and in any event no later than March 15 of
the
year immediately following the year in which the expenses were
incurred.
SECTION
9. TERMINATION
OF EMPLOYMENT WITH BENEFITS.
(a)
Subject to
Sections 9(b) and 9(c), the Executive shall be entitled to the benefits
described in Section 9(b) in the event that:
(i)
his
employment with the Bank terminates during the Employment Period as a result
of
the Executive’s termination for Good Reason (as defined in Section 9(a)(i)(A)
and (B) of this Agreement), which shall mean a termination based on the
following:
(A)
any material
breach of this Agreement by the Employer, including without limitation any
of
the following: (1) a material diminution in the Executive’s base compensation,
(2) a material diminution in the Executive’s authority, duties or
responsibilities as prescribed in Section 3, or (3) a material diminution in
the
authority, duties or responsibilities of the officer to whom the Executive
is
required to report, or
6
(B)
any material
change in the geographic location at which the Executive must perform his
services under this Agreement;
provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide written notice to the Employer within ninety (90)
days of the initial existence of the condition, describing the existence of
such
condition, and the Employer shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employer received the written
notice from the Executive. If the Employer remedies the condition
within such thirty (30) day cure period, then no Good Reason shall be deemed
to
exist with respect to such condition. If the Employer does not remedy
the condition within such thirty (30) day cure period, then the Executive may
deliver a notice of termination for Good Reason at any time within sixty (60)
days following the expiration of such cure period; or
(ii)
the
Executive’s employment with the Employer is terminated by the Bank during the
Employment Period for any reason other than for “cause,” death or ADisability,”
as provided in Section 10(a).
(b)
Subject to
Section 9(c), and provided that no Change in Control (as defined in Section
11(a) hereof) has occurred, the Employer shall pay and provide to the Executive
(or, in the event of his subsequent death, to his estate) the following
severance benefits for the period beginning on the date that his employment
terminates and ending on either (i) the last day of the Employment Period or
(ii) 24 months subsequent to the date of termination, whichever period is
greater (the “Severance Benefits Period”):
(i)
his
earned but unpaid Base Salary (including, without limitation, all items which
constitute wages under applicable law and the payment of which is not otherwise
provided for in this Section 9(b)) as of the date of the termination of his
employment, with such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages but in no event later
than
30 days after termination of employment;
(ii)
the
benefits, if any, to which he is entitled under the employee benefit plans
and
programs and compensation plans and programs maintained for the benefit of
the
Bank’s officers and employees (such benefits not to include the expense
allowance provided by Section 5(b)) through the date of the termination of
his
employment;
(iii)
continued group life, health, dental and accident insurance benefits, in
addition to that provided pursuant to Section 9(b)(ii), and after taking into
account the coverage provided by any subsequent employer, if and to the extent
necessary to provide for the Executive, for the Severance Benefits Period,
coverage equivalent to the coverage to which he would have been entitled under
such plans if he had continued to be employed during such
period; provided that any insurance premiums payable by the Employer
or any successors pursuant to this Section 9(b)(iii) shall be payable at such
times and in such amounts as if the Executive was still an employee of the
Employer, subject to any increases in such amounts imposed by the insurance
company or COBRA, and the amount of insurance premiums required to be paid
by
the Employer in any taxable year shall not affect the amount of insurance
premiums required to be paid by the Employer in any other taxable
year;
7
(iv)
a lump
sum cash amount equal to the projected cost to the Employer of providing group
long-term disability insurance benefits to the Executive for the Severance
Benefits Period, with the projected cost to the Employer to be based on the
costs incurred as of the date of termination as determined on an annualized
basis;
(v)
a lump
sum cash amount, provided within 30 days following termination of employment,
equal to (A) the Executive’s Annual Compensation (as hereinafter defined)
multiplied by (B) a fraction which is either (1) the number of days left in
the
Employment Period if the Executive had not been terminated or (2) 730, whichever
is greater, divided by 365;
(vi)
a lump
sum cash amount equal to the pro rata portion of any target bonus awarded to
the
Executive under the Bank’s Executive Incentive Plan (the “EIP”) or
the STIC (or such other short-term incentive compensation plan(s) that the
Employer may adopt subsequent to the date hereof as a replacement therefor
in
which the Executive participates) which relates to the calendar year in which
such termination occurs; provided that such pro rata portion will be
calculated by multiplying the amount of the target bonus by a fraction the
numerator of which is the number of days elapsed in the calendar year as of
the
date of termination and the denominator is 365; provided, further, that
such pro rated target bonus shall be paid within 30 days following termination
of employment;
(vii)
a lump
sum cash amount, payable within 30 days following termination of employment,
equal to the present value, determined by using a discount rate equal to the
short-term applicable federal rate (determined under Section 1274(d) of the
Code) as published by the IRS for the month in which the termination of
employment occurs, of the excess, if any, of:
(A)
the value of the
aggregate benefits to which he would be entitled under any and all qualified
defined benefit pension plans and non-qualified plans related thereto maintained
by, or covering employees of, the Bank if he were 100% vested thereunder and
had
continued to be employed during the Severance Benefits Period at the highest
annual rate of Base Salary achieved during the Employment Period;
over
(B)
the value of the
benefits to which he is actually entitled under such defined benefit pension
plans as of the date on which his employment terminates; such present values
to
be determined using the mortality tables prescribed under Section
415(b)(2)(E)(v) of the Code; and
8
(viii)
a lump
sum cash amount, payable within 30 days following termination of employment,
equal to the present value, determined by using a discount rate equal to the
short-term applicable federal rate (determined under Section 1274(d) of the
Code) as published by the IRS for the month in which the termination of
employment occurs, of the additional employer contributions to which he would
have been entitled under any and all qualified defined contribution plans and
non-qualified plans related thereto maintained by, or covering employees of,
the
Bank as if he were 100% vested thereunder and had continued to be employed
during the Severance Benefits Period at the highest annual rate of Base Salary
achieved during the Employment Period and making the maximum amount of employee
contributions, if any, required or permitted under such plan or plans, provided
that no payments shall be made pursuant to this subsection (viii) with respect
to the Company’s ESOP if the ESOP is terminated effective as of a
date within one year of the date of the termination of the Executive’s
employment, with the Executive to reimburse the Employer for any such payments
previously made within 30 days of the Executive’s receipt of a request for
reimbursement from the Employer.
The
Executive’s
“Annual Compensation” for purposes of this Agreement shall be deemed to mean the
sum of (i) the Executive’s Base Salary in effect as of the date of termination
of his employment and (ii) the greater of (A) the average of the cash incentive
compensation earned by the Executive from the Employer or any subsidiary thereof
during the three calendar years immediately preceding the calendar year in
which
the date of termination occurs or (B) the amount of the Executive’s target bonus
under the EIP (or such other short-term incentive compensation plan(s) that
the
Employer may adopt subsequent to the date hereof as a replacement therefor)
for
the calendar year in which the termination occurs; provided, however,
for purposes of clause (ii) bonuses earned under the Bank’s Performance Unit
Plan will not be included in cash incentive compensation for purposes of
determining average cash incentive compensation (or with respect to Section
11(b), the highest level of cash incentive compensation).
The
Employer and the
Executive further agree that the Employer may condition the payments and
benefits (if any) due under Sections 9(b)(iii), (iv), (v), (vi), (vii) and
(viii) on the receipt of the Executive’s resignation from any and all positions
which he holds as an officer, director or committee member with respect to
the
Employer or any of its subsidiaries or affiliates and to the execution of a
general release by the Executive.
(c)
The Executive
shall not be required to mitigate the amount of any benefits provided pursuant
to the provisions of Section 9(b) by seeking other employment or otherwise.
However, if the Executive becomes or is employed by another employer subsequent
to the first year following termination, any compensation received by the
Executive subsequent to the first year following termination through the end
of
the Severance Benefits Period shall be offset dollar for dollar against the
Employer’s obligations set forth in Section 9(b) except with respect to
Section 9(b)(iii), with the Executive to reimburse the Employer the amount
of the offset with respect to amounts previously paid by the Employer within
30
days of the Executive’s receipt of a request for reimbursement from the
Employer. In addition, if the Executive becomes employed by another
entity subsequent to termination hereunder, and under the terms of such
employment is entitled to benefits substantially similar to those provided
in
Section 9(b)(iii), the Employer will not be required to continue provision
of
the benefits set forth in said Section 9(b)(iii) for the remainder of the
Severance Benefits Period.
9
SECTION
10. TERMINATION
WITHOUT ADDITIONAL EMPLOYER LIABILITY.
(a) In
the event that the Executive’s employment with the Employer shall terminate
during the Employment Period on account of:
(i)
the discharge of the Executive for “cause,” which, for purposes of this
Agreement, shall mean a discharge because the Bank Board determines that the
Executive has: (A) willfully failed to perform his assigned duties under this
Agreement, other than any failure resulting from the Executive’s incapacity due
to physical or mental injury or illness; (B) committed an act involving moral
turpitude in the course of his employment with the Employer and its subsidiaries
or affiliates; (C) engaged in willful misconduct; (D) breached his fiduciary
duties for personal profit; (E) willfully violated, in any material respect,
any
law, rule or regulation (other than traffic violations or similar offenses),
written agreement or final cease-and-desist order with respect to his
performance of services for the Bank, as determined by the Bank Board; or
(F) materially breached the terms of this Agreement and failed to cure such
material breach during a 15-day period following the date on which the Bank
Board gives written notice to the Executive of the material breach;
(ii) the
Executive’s voluntary resignation from employment (including voluntary
retirement) with the Bank for reasons other than Good Reason as specified in
Section 9(a)(i); or
(iii)
the death of the Executive while employed by the Employer, or the termination
of
the Executive’s employment because of “Disability” as defined in Section 10(c)
below;
then
in
any of the foregoing events, the Employer shall have no further obligations
under this Agreement, other than (A) the payment to the Executive of his earned
but unpaid compensation as of the date of the termination of his employment,
(B)
the payment to the Executive of the benefits to which he is entitled under
all
applicable employee benefit plans and programs and compensation plans and
programs as of the date of termination of his employment, and (C) the provision
of such other benefits, if any, to which he is entitled as a former employee
under the Bank’s and/or the Company’s employee benefit plans and programs and
compensation plans and programs.
(b) For
purposes of this Section 10, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the
Employer. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Bank Board or based upon the
written advice of counsel for the Employer shall be conclusively presumed to
be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Employer. The cessation of employment of the
Executive shall not be deemed to be for “cause” within the meaning of Section
10(a)(i) unless and until there shall have been delivered to the Executive
a
copy of a resolution duly adopted by the affirmative vote of three-fourths
of
the members of the Bank Board at a meeting of such Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
such Board), finding that, in the good faith opinion of such Board, the
Executive is guilty of the conduct described in Section 10(a)(i) above, and
specifying the particulars thereof in detail.
10
(c) “Disability”
shall be deemed to have occurred if the Executive: (i) is unable to engage
in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be
expected to last for a continuous period of not less than 12 months, or (ii)
is,
by reason of any medically determinable physical or mental impairment which
can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for
a
period of not less than three months under an accident and health plan covering
employees of the Bank.
(d) During
any period in which the Executive is absent due to physical or mental
impairment, the Employer may, without breaching this Agreement, appoint another
person or persons to act as interim Executive Vice President pending the
Executive’s return to his duties on a full-time basis hereunder or his
termination as a result of such Disability. Prior to the Executive’s
employment being terminated due to Disability under Section 10(e) hereof, the
Executive shall continue to receive his full Base Salary, bonuses and other
benefits to which he is entitled under this Agreement, including continued
participation in all employee benefit plans and programs.
(e) The
Employer may provide notice to the Executive in writing that it intends to
terminate the Executive’s employment under this Agreement, with the termination
date to be on or after the date that the Executive is deemed to have a
Disability. At the time his employment hereunder is terminated due to
Disability, (i) the Executive shall not be entitled to any payments or benefits
pursuant to Sections 4 and 5 hereof for periods subsequent to such date of
termination, and (ii) the Executive shall become entitled to receive the
Disability payments that may be available under any applicable long-term
disability plan or other benefit plan.
SECTION
11. PAYMENTS
UPON A CHANGE IN CONTROL.
(a)
The term “Change
in Control” shall mean a change in the ownership of the Company or the Bank, a
change in the effective control of the Company or the Bank or a change in the
ownership of a substantial portion of the assets of the Company or the Bank,
in
each case as provided under Section 409A of the Code and regulations
thereunder. In no event, however, shall a Change in Control be deemed
to have occurred as a result of any acquisition of securities or assets of
the
Company, the Bank, or a subsidiary of either of them, by the Company, the Bank,
or any subsidiary of either of them, or by any employee benefit plan maintained
by any of them.
(b)
If the
Executive’s employment by the Employer shall be terminated subsequent to a
Change in Control and during the term of this Agreement by (i) the Employer
for
other than Cause, Disability, Retirement or the Executive’s death or (ii) the
Executive for Good Reason as defined in Section 9(a)(i) hereof, then the
Employer shall pay to the Executive a severance benefit in a lump sum payment,
within five (5) days after the effective time of such termination of employment,
equal to the sum of (i) three times his Base Salary as of the date of
termination of his employment, (ii) three times the highest level of cash
incentive compensation earned by the Executive from the Employer or any
subsidiary thereof in any one of the
11
three
calendar years immediately preceding the year in which the termination occurs
and (iii) the amounts specified in Sections 9(b)(i), (ii), (iv), (vi), (vii)
and
(viii) (notwithstanding any contrary language contained therein with respect
to
payment being over a longer time period) except in calculating the amount of
such benefits, to the extent applicable, the Severance Benefits Period will
be
for a period of three years commencing on the date of the termination of the
Executive’s employment. In addition, for purposes of calculating the amount due
pursuant to clause (ii) above, bonuses earned under the Bank’s Performance Unit
Plan will not be included in calculating the highest level of cash incentive
compensation. In addition, the Employer shall provide the Executive with the
benefits provided for in Section 9(b)(iii) for the Severance Benefits Period,
as
adjusted above to be for a period of three years subsequent to termination
of
employment, subject to compliance with the last proviso clause contained in
such
subsection. In the event that the Employer is unable to provide the
benefits set forth in said Section 9(b)(iii) due to the change in the
Executive’s status to that of a non-employee, the Employer shall include in the
lump sum payment due pursuant to the terms of this Section 11(b) the value
of
the benefits required to be provided by said Section 9(b)(iii) for the Severance
Benefits Period as amended by this Section 11(b). The severance and
other benefits payable pursuant to this Section 11(b) shall not be subject
to
reduction pursuant to the provisions of Section 9(c).
SECTION
12. LIMITATION
ON CHANGE IN CONTROL PAYMENT.
In
the event
that:
|
(i)
|
the
aggregate payments or benefits to be made or afforded to the Executive
pursuant to this Agreement, together with other payments and benefits
which the Executive has a right to receive from the Employer, which
are
deemed to be parachute payments as defined in Section 280G of the
Code, or
any successor thereof (the “Termination Benefits”), would be deemed to
include an “excess parachute payment” under Section 280G of the Code;
and
|
|
(ii)
|
if
such Termination Benefits were reduced to an amount (the “Non-Triggering
Amount”), the value of which is one dollar ($1.00) less than an amount
equal to three (3) times the Executive’s “base amount,” as determined in
accordance with said Section 280G and the Non-Triggering Amount less
the
product of the marginal rate of any applicable state, local and federal
income tax and the Non-Triggering Amount would be greater than the
aggregate value of the Termination Benefits (without such reduction)
minus
(i) the amount of tax required to be paid by the Executive thereon
by
Section 4999 of the Code and further minus (ii) the product of the
Termination Benefits and the marginal rate of any applicable state,
local
and federal income tax,
|
then
the
Termination Benefits shall be reduced to the Non-Triggering
Amount. If the Termination Benefits are required to be reduced, the
cash severance shall be reduced first, followed by a reduction in the fringe
benefits to be provided in kind.
12
SECTION
13. SOURCE
OF PAYMENTS.
All
payments provided
in this Agreement shall be timely paid in cash or check from the general funds
of the Bank.
SECTION
14. COVENANT
NOT TO COMPETE.
In
the event the
Executive’s employment with the Employer is terminated for any reason prior to
the expiration of the Employment Period (except as set forth below), the
Executive hereby covenants and agrees that for a period of two years following
the date of his termination of employment with the Employer (or, if less, for
the Severance Benefits Period), he shall not, without the written consent of
the
Employer, become an officer, employee, consultant, director or trustee of any
savings bank, savings and loan association, savings and loan holding company,
bank or bank holding company, or any direct or indirect subsidiary or affiliate
of any such entity, that entails working within any county in which the Company
or the Bank maintains an office as of the date of termination of the Executive’s
employment. In addition, in the event of a breach by the Executive of any of
the
provisions of this Section 14, the Employer may avail itself of such remedies
that may be available to it as a result of such breach by the Executive, with
such remedies to be cumulative and not mutually exclusive. This section shall
not be applicable if the Executive is terminated upon or within one year
subsequent to a Change in Control, provided that such termination is for reasons
other than Cause as defined in Section 10(a)(i) hereof.
SECTION
15. CONFIDENTIALITY.
Unless
he obtains the
prior written consent of the Employer, the Executive shall at all times keep
confidential and shall refrain from using for the benefit of himself, or any
person or entity other than the Employer or its subsidiaries or affiliates,
any
material document or information obtained from the Employer or its subsidiaries
or affiliates, in the course of his employment with any of them concerning
their
properties, operations or business (unless such document or information is
readily ascertainable from public or published information or trade sources
or
has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this Section 15 shall prevent the
Executive, with or without the Employer’s consent, from participating in or
disclosing documents or information in connection with any judicial or
administrative investigation, inquiry or proceeding or the Company’s public
reporting requirements to the extent that such participation or disclosure
is
required under applicable law.
SECTION
16. SOLICITATION.
The
Executive hereby
covenants and agrees that, for a period of two years following his termination
of employment with the Employer for any reason, he shall not, without the
written consent of the Employer, either directly or indirectly:
13
(a)
solicit, offer
employment to, or take any other action intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing any
officer or employee of the Employer or any of its subsidiaries or affiliates
to
terminate his employment and accept employment or become affiliated with, or
provide services for compensation in any capacity whatsoever to, any savings
bank, savings and loan association, bank, bank holding company, savings and
loan
holding company, or other institution engaged in the business of accepting
deposits, making loans or doing business within the counties specified in
Section 14;
(b)
provide any
information, advice or recommendation with respect to any such officer or
employee to any savings bank, savings and loan association, bank, bank holding
company, savings and loan holding company, or other institution engaged in
the
business of accepting deposits, making loans or doing business within the
counties specified in Section 14, that is intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing any
officer or employee of the Employer or any of its subsidiaries or affiliates
to
terminate his employment and accept employment or become affiliated with, or
provide services for compensation in any capacity whatsoever to, any savings
bank, savings and loan association, bank, bank holding company, savings and
loan
holding company, or other institution engaged in the business of accepting
deposits, making loans or doing business within the counties specified in
Section 14; or
(c)
solicit, provide
any information, advice or recommendation or take any other action intended,
or
that a reasonable person acting in like circumstances would expect, to have
the
effect of causing any customer of the Company or the Bank to terminate an
existing business or commercial relationship with the Company or the
Bank.
SECTION
17. NO
EFFECT ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.
The
termination of
the Executive’s employment during the Employment Period or thereafter, whether
by the Employer or by the Executive, shall have no effect on the vested rights
of the Executive under the Company’s or the Bank’s qualified or non-qualified
retirement, pension, savings, thrift, profit-sharing or stock bonus plans,
group
life, health (including hospitalization, medical and major medical), dental,
accident and long term disability insurance plans, or other employee benefit
plans or programs, or compensation plans or programs in which the Executive
was
a participant.
SECTION
18. SUCCESSORS
AND ASSIGNS.
(a)
This Agreement is personal to each of the parties hereto, and no party may
assign or delegate any of its rights or obligations hereunder without first
obtaining the written consent of the other parties; provided, however,
that the Employer will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Employer, by an
assumption agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Employer would be required to perform
it
if no such succession or assignment had taken place. Failure of the
Employer to obtain such an assumption agreement prior to the effectiveness
of
any such succession or assignment shall be a breach of this Agreement and shall
entitle the Executive to compensation from the Employer in the same amount
and
on the same terms as the compensation pursuant to Sections 9 or 11
hereof. For purposes of implementing the provisions of this Section
18(a), the date which any such succession without an assumption agreement
becomes effective shall be deemed the date of termination of the Executive’s
employment.
14
(b) This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive’s personal and legal representatives,
executors, administrators, successors, heirs, distributees, devises and
legatees.
SECTION
19. NOTICES.
Any
communication
required or permitted to be given under this Agreement, including any notice,
direction, designation, consent, instruction, objection or waiver, shall be
in
writing and shall be deemed to have been given at such time as it is delivered
personally, or five days after mailing if mailed, postage prepaid, by registered
or certified mail, return receipt requested, addressed to such party at the
address listed below or at such other address as one such party may by written
notice specify to the other party:
If
to the
Executive:
J.
Xxxxxx
Xxxxxxx
At
the
address last appearing
on
the
personnel records of
the
Employer
If
to the
Employer:
NewAlliance
Bank
000
Xxxxxx Xxxxxx
Xxx
Xxxxx, XX 00000
(or
the
address of the Bank’s principal executive office, if different)
Attention:
Chairman of the Board
with
a
copy, in the case of a notice to the Employer, to:
Elias,
Matz, Xxxxxxx & Xxxxxxx L.L.P.
000
00xx Xxxxxx,
X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx
X.
Xxxxx, Esq.
15
SECTION
20. INDEMNIFICATION
FOR ATTORNEYS’ FEES.
(a)
The Employer
shall indemnify, hold harmless and defend the Executive against reasonable
costs, including legal fees and expenses, incurred by him in connection with
or
arising out of any action, suit or proceeding in which he may be involved,
as a
result of his efforts, in good faith, to defend or enforce the terms of this
Agreement. For purposes of this Agreement, any settlement agreement
which provides for payment of any amounts in settlement of the Employer’s
obligations hereunder shall be conclusive evidence of the Executive’s
entitlement to indemnification hereunder, and any such indemnification payments
shall be in addition to amounts payable pursuant to such settlement agreement,
unless such settlement agreement expressly provides otherwise.
(b)
The Employer’s
obligation to make the payments provided for in this Agreement and otherwise
to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Employer may have against the Executive or others. Unless it is
determined that a claim made by the Executive was either frivolous or made
in
bad faith, the Employer agrees to pay as incurred (and in any event no later
than March 15 of the year immediately following the year in which incurred),
to
the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of or in connection with his
consultation with legal counsel or arising out of any action, suit, proceeding
or contest (regardless of the outcome thereof) by the Employer, the Executive
or
others regarding the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. This Section 20(b) shall apply whether such consultation,
action, suit, proceeding or contest arises before, on, after or as a result
of a
Change in Control.
SECTION
21. SEVERABILITY.
A
determination that
any provision of this Agreement is invalid or unenforceable shall not affect
the
validity or enforceability of any other provision hereof.
SECTION
22. WAIVER.
Failure
to insist
upon strict compliance with any of the terms, covenants or conditions hereof
shall not be deemed a waiver of such term, covenant or condition. A
waiver of any provision of this Agreement must be made in writing, designated
as
a waiver, and signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right or power hereunder
at any one or more times shall not be deemed a waiver or relinquishment of
such
right or power at any other time or times.
SECTION
23. COUNTERPARTS.
This
Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and all of which shall constitute one and the same Agreement.
16
SECTION
24. GOVERNING
LAW.
This
Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Connecticut applicable to contracts entered into and to be performed
entirely within the State of Connecticut, except to the extent that federal
law
controls.
SECTION
25. HEADINGS
AND CONSTRUCTION.
The
headings of
sections in this Agreement are for convenience of reference only and are not
intended to qualify the meaning of any section. Any reference to a
section number shall refer to a section of this Agreement, unless otherwise
stated.
SECTION
26. ENTIRE
AGREEMENT; MODIFICATIONS.
This
instrument
contains the entire agreement of the parties relating to the subject matter
hereof, and supersedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof,
including that certain employment agreement dated as of April 1, 2004 between
the Employer and the Executive and the amended and restated employment agreement
effective as of January 3, 2006 between the Employer and the
Executive. No modifications of this Agreement shall be valid unless
made in writing and signed by the parties hereto; provided, however, that if
the
Employer determines, after a review of the final regulations issued under
Section 409A of the Code and all applicable Internal Revenue Service guidance,
that this Agreement should be further amended to avoid triggering the tax and
interest penalties imposed by Section 409A of the Code, the Employer may amend
this Agreement to the extent necessary to avoid triggering the tax and interest
penalties imposed by Section 409A of the Code.
SECTION
27. REQUIRED
REGULATORY PROVISIONS.
Notwithstanding
anything herein contained to the contrary, any payments to the Executive by
the
Employer, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.
SECTION
28. DISPUTE RESOLUTION.
(a) In
the event of any dispute, claim, question or disagreement arising out of or
relating to this Agreement or the breach hereof, the parties hereto shall use
their best efforts to settle such dispute, claim, question or
disagreement. To this effect, they shall consult and negotiate with
each other, in good faith, and, recognizing their mutual interests, attempt
to
reach a just and equitable solution satisfactory to both parties.
(b) If
they do not reach such a solution within a period of thirty (30) days, then
the
parties agree first to endeavor in good faith to amicably settle their dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association (the “AAA”), before resorting to arbitration.
17
(c) Thereafter,
any unresolved controversy or claim arising out of or relating to this Agreement
or the breach thereof, upon notice by any party to the other, shall be submitted
to and finally settled by arbitration in accordance with the Commercial
Arbitration Rules (the “Rules”) of the AAA in effect at the time demand for
arbitration is made by any such party. The parties shall mutually
agree upon a single arbitrator within thirty (30) days of such
demand. In the event that the parties are unable to so agree within
such thirty (30) day period, then within the following thirty (30) day period,
one arbitrator shall be named by each party. A third arbitrator shall
be named by the two arbitrators so chosen within ten (10) days after the
appointment of the first two arbitrators. In the event that the third
arbitrator is not agreed upon, he shall be named by the
AAA. Arbitration shall occur in New Haven, Connecticut or such other
location as may be mutually agreed to by the parties.
(d) The
award made by all or a majority of the panel of arbitrators shall be final
and
binding, and judgment may be entered based upon such award in any court of
law
having competent jurisdiction. The award is subject to confirmation,
modification, correction or vacation only as explicitly provided in Title 9
of
the United States Code. The prevailing party shall be entitled to
receive any award of pre- and post-award interest as well as attorney’s fees
incurred in connection with the arbitration and any judicial proceedings related
thereto. The parties acknowledge that this Agreement evidences a
transaction involving interstate commerce. The United States
Arbitration Act and the Rules shall govern the interpretation, enforcement,
and
proceedings pursuant to this Section. Any provisional remedy which
would be available from a court of law shall be available from the arbitrators
to the parties to this Agreement pending arbitration. Either party
may make an application to the arbitrators seeking injunctive relief to maintain
the status quo, or may seek from a court of competent jurisdiction any interim
or provisional relief that may be necessary to protect the rights and property
of that party, until such times as the arbitration award is rendered or the
controversy otherwise resolved.
18
IN
WITNESS WHEREOF,
the Bank has caused this Agreement to be executed by its duly authorized
officers and the Executive has hereunto set his hand, all as of the date of
the
restatement of this Agreement.
THIS
AGREEMENT
CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
|
______________________________________
|
|
|
J.
Xxxxxx Xxxxxxx, Executive
|
|
|
ATTEST:
|
NEWALLIANCE
BANK
|
|
By:_____________________________
|
By:____________________________________
|
|
Name:__________________________
|
Name:_________________________________
|
|
Title:___________________________
|
Title:__________________________________
|
|
[Seal]
|
19
