Exhibit 10.2
BROOKLINE BANK
CHANGE IN CONTROL AGREEMENT
This Agreement is made effective as of the 1st day of January 2008, by
and between. ("Executive") and Brookline Bank, a federally chartered stock
savings bank (the "Bank").
WHEREAS, Executive is serving in the position of _________________ for
the Bank, a position of substantial responsibility.
WHEREAS, the Bank recognizes the significant contribution Executive has
made to the Bank and desires to protect Executive's position in the event of a
"Change in Control," as defined in this Agreement.
NOW, THEREFORE, in consideration of the services of Executive agreeing
to serve in the position set forth above, and upon the other terms and
conditions hereinafter provided, the parties hereto agree as follows:
1. TERM OF AGREEMENT
The initial term of this Agreement shall be for a period of twelve (12)
months from the date set forth above (the "Effective Date"). Commencing on the
anniversary date of this Agreement and continuing on each anniversary date
thereafter, this Agreement will extend for an additional twelve (12) months
unless the Bank provides written notice of non-renewal to Executive at least
thirty (30) days and not more than sixty (60) days prior to such anniversary
date, in which case this Agreement will become fixed and will terminate at the
end of the then current term. Notwithstanding any other provision of this
Section 1, this Agreement shall remain in effect upon the public announcement of
an event that, if consummated, would result in a "Change in Control," as defined
in Section 2(b) hereof, and for a period of twelve (12) months after the closing
or completion of the Change in Control.
2. PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL
(a) Upon the occurrence of a "Change in Control" (as herein defined) of
the Bank or Brookline Bancorp, Inc. (the "Company") followed at any time during
the term of this Agreement by (i) the involuntary termination of Executive's
employment, other than for "Cause," as defined in Section 2(c) hereof, or (ii)
the voluntary termination of Executive's employment during the term of this
Agreement following any demotion, loss of office or significant authority,
reduction in annual compensation or benefits, or relocation of Executive's
principal place of employment by more than 30 miles from its location
immediately prior to the Change in Control, then the provisions of Section 3
shall apply. Upon the occurrence of any events mentioned in clause (ii) of this
Section 2(a), Executive shall have the right to elect to terminate his
employment under this Agreement by resignation within thirty (30) days prior
written notice given with a reasonable time not to exceed ninety (90) days after
the initial event giving rise to the right to elect to voluntary terminate
employment. The Bank shall have at least thirty (30) days to remedy any
condition set forth in clause (ii) of this Section 2(a), provided, however, that
the Bank shall be entitled to waive such period and make an immediate payment
hereunder.
(b) A "Change in Control" of the Bank or the Company shall mean a
change in control of a nature that: (i) would be required to be reported in
response to Item 5.01 of the current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank or
the Company within the meaning of the Home Owners' Loan Act, as amended, and
applicable rules and regulations promulgated thereunder (collectively the
"HOLA"), as in effect at the time of the Change in Control; or (iii) without
limitation such a Change in Control shall be deemed to have occurred at such
time as (a) any "person" (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of Company's outstanding
securities except for any securities purchased by the Bank's employee stock
ownership plan or trust; or (b) individuals who constitute the Board on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board, or whose nomination for election
by the Company's stockholders was approved by the same Nominating Committee
serving under an Incumbent Board, shall be, for purposes of this clause (b),
considered as though he were a member of the Incumbent Board; or (c) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or the Company or similar transaction in which the Bank or
Company is not the surviving institution occurs; or (d) a proxy statement
soliciting proxies from stockholders of the Company, by someone other than the
current management of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or similar transaction
with one or more corporations as a result of which the outstanding shares of the
class of securities then subject to the plan are to be exchanged for or
converted into cash or property or securities not issued by the Company; or (e)
a tender offer is made for 25% or more of the voting securities of the Company
and the shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted
by the tender offeror.
(c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 hereof upon Termination for Cause. The term termination
for "Cause" shall mean termination because of Executive's intentional failure to
perform stated duties, personal dishonesty, incompetence, willful misconduct,
any breach of fiduciary duty involving personal profit, willful violation of any
law, rule, regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach of any material provision
of this Agreement. A voluntary resignation pursuant to Section 2(a)(ii) shall
not constitute, nor be grounds for termination for Cause. In determining
incompetence, the acts or omissions shall be measured against standards
generally prevailing in the savings institution industry.
3. TERMINATION
(a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by the involuntary termination of Executive's
employment other than a termination for Cause, or the voluntary termination of
Executive's employment by Executive after the occurrence of an event set forth
in Section 2(a) hereof, the Bank shall be obligated to pay Executive, or in the
event of Executive's subsequent death, Executive's beneficiary or beneficiaries,
or Executive's estate, as the case may be, as severance pay, a sum equal to the
Executive's current annual base salary and the cash incentive paid to the
Executive, attributable to the prior year.
(b) Upon the occurrence of a Change in Control of the Bank followed at
any time during the term of this Agreement by Executive's involuntary
termination of employment (other than for termination for Cause) or the
voluntary termination of Executive's employment as set forth in Section 2(a)
hereof, the Bank shall cause to be continued, at the Bank's expense (or the
expense of its successors), life insurance and nontaxable medical and dental
coverage substantially identical to the coverage maintained by the Bank for
Executive prior to Executive's severance. Such coverage and payments shall cease
upon expiration of twelve (12) months.
2
(c) Notwithstanding paragraphs (a) and (b) of this Section 3, in no
event shall the aggregate payments or benefits to be made or afforded to
Executive under said paragraphs (the "Termination Benefits") constitute an
"excess parachute payment" under Section 280G of the Code or any successor
thereto, and in order to avoid such a result Termination Benefits will be
reduced, if necessary, 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
Executive's "base amount," as determined in accordance with said Section 280G.
The allocation of the reduction required hereby among Termination Benefits
provided by the preceding paragraphs of this Section 3 shall be determined by
Executive, provided however that if it is determined that such election by
Executive shall be in violation of Code Section 409A, the allocation of the
required reduction shall be pro-rata.
(d) Any cash severance payments shall be made in a lump sum within
thirty (30) days after Executive's termination of employment. Such payments
shall not be reduced or eliminated in the event Executive obtains other
employment following termination of employment with the Bank. Not withstanding
the foregoing, in the event Executive is a "Specified Employee" (within the
meaning of Treasury Regulations ss.1.409A-1(i)), and if the following is
required to avoid a violation of Code Section 409A, no payment shall be made to
Executive under this Section prior to the first day of the seventh month
following Executive's termination of employment in excess of the "permitted
amount" under Code Section 409A. For these purposes, the "permitted amount"
shall be an amount that does not exceed two times the lesser of: (i) the sum of
Executive's annualized compensation based upon the annual rate of pay for
services provided to the Bank for the calendar year preceding the year in which
Executive terminates employment pursuant to this Section, or (ii) the maximum
amount that may be taken into account under a tax-qualified plan pursuant to
Code Section 401(a)(17) for the calendar year in which occurs Executive's
termination of employment. Payment of the "permitted amount" shall be made
within thirty (30) days following Executive's termination of employment, and any
payment in excess of the permitted amount shall be paid to Executive on the
first day of the seventh month following Executive's termination of employment.
(e) For purposes of this Section 3, "termination of employment" as used
herein shall be construed to require a "Separation from Service" as defined in
Code Section 409A and the Treasury Regulations promulgated thereunder, provided,
however, that the Bank and Executive reasonably anticipate that the level of
bona fide services Executive would perform after termination would permanently
decrease to a level that is less than 50% of the average level of bona fide
services performed (whether as an employee or an independent contractor) over
the immediately preceding 36-month period.
4. NOTICE OF TERMINATION
(a) Any termination by the Bank or by Executive shall be communicated
by Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated and shall be communicated to the other party no later than thirty (30)
days after the occurrence of the event(s) or circumstance(s) that provides the
basis for termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination (which, in the case of a termination for Cause, shall be
immediate). In no event shall the Date of Termination exceed thirty (30) days
from the date Notice of Termination is given.
3
5. POST-TERMINATION OBLIGATIONS
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 5 during the term of this
Agreement and for one (1) full year after the expiration or termination hereof.
Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party.
6. SOURCE OF PAYMENTS
All payments provided in this Agreement shall be paid by check from the
general funds of the Bank.
7. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Bank and Executive, except
that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided. No provision of
this Agreement shall be interpreted to mean that Executive is subject to
receiving fewer benefits than those available to Executive without reference to
this Agreement.
8. NO CONTRACT OF EMPLOYMENT
This Agreement shall not create a contract of employment between
Executive and the Bank or the Company, and any payments to Executive under this
Agreement shall occur only pursuant to Section 3(a) hereof following a Change in
Control.
9. NO ATTACHMENT
Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
10. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the 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 waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
11. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
4
12. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
13. GOVERNING LAW
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, but only to the extent not superseded by federal law.
14. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted by a single
arbitrator (who shall be selected by mutual agreement of the Bank and
Executive), sitting in a location selected by the Bank within fifty (50) miles
from the main office of the Bank, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
15. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in Executive's favor, and that
such reimbursement shall occur no later than two and one-half months after the
dispute is settled or resolved in Executive's favor.
16. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon, and inure to the benefit of the
Bank and its successors and assigns. The Bank shall require any successor or
assignee, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all the business or assets of the Bank or the
Company, expressly and unconditionally to assume and agree to perform the Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Bank would be required to perform if no such succession or assignment had
taken place.
17. REQUIRED PROVISIONS
(a) The Bank may terminate Executive's employment at any time.
Executive shall not have the right to receive compensation or other benefits for
any period after termination for "Cause" as defined in Section 2(c) herein
above.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 U.S.C. ss.1818(e)(3)) or 8(g) (12 U.S.C. ss.1818(g)) of the
Federal Deposit Insurance Act, as amended, the Bank's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while its contract obligations were suspended, and (ii) reinstate (in whole or
in part) any of the obligations which were suspended.
5
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 U.S.C. ss.1818(e)) or 8(g) (12 U.S.C. ss.1818(g)) of the
Federal Deposit Insurance Act, as amended, all obligations of the Bank under
this Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x) (12 U.S.C.
ss.1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all obligations
of the Bank under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank under this Agreement shall be
terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Bank, (i) by the Federal Deposit
Insurance Corporation ("FDIC"), at the time the FDIC enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) (12 U.S.C. ss.1823(c)) of the Federal Deposit Insurance Act, as
amended, or (ii) when the Bank is determined by the FDIC to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.
(f) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Bank, 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. ss. 1828(k), and the
regulations promulgated thereunder in 12 C.F.R. Part 359.
6
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
and its seal to be affixed hereunto by its duly authorized officer, and
Executive has signed this Agreement, effective as of the date first above
written.
ATTEST: BROOKLINE BANK
By:
------------------------- --------------------------------------
Xxxxxxx X. Xxxxxxx, Xx., Chairman
WITNESS: EXECUTIVE:
By:
------------------------- --------------------------------------
7
