EXHIBIT 10.8
SENIOR MANAGEMENT
CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL AGREEMENT (the "AGREEMENT") is made and entered
into as of May 1, 2001, by and between XXXXXX x XXXXX of Xxxxxx, Connecticut
("EXECUTIVE") and PATRIOT NATIONAL BANK, a national banking association with
headquarters located in Stamford, Connecticut ("BANK").
WITNESSETH
WHEREAS, it is contemplated that from time to time one or more entities
may consider the possibility of acquiring Patriot (as hereinafter defined) or
that a Change in Control (as hereinafter defined) may otherwise occur, with or
without the approval of the Board of Directors of Bancorp (as hereinafter
defined) or the Board of Directors of Bank (as hereinafter defined); and
WHEREAS, the Board of Directors of Bank has determined that it is in the
best interests of Bank and its security holders to provide incentive to
Executive to remain employed as an executive officer of Bank during any period
prior to or during a possible Change of Control of Patriot and for a period of
up to 90 days following a Change of Control of Patriot, with the continued
dedication and objectivity of Executive, notwithstanding the possibility, threat
or occurrence of a Change of Control; and
WHEREAS, the Parties (as hereinafter defined) desire to enter into this
Agreement to reflect the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter described and for other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Parties hereto hereby amend
and restate the Original Change of Control Agreement in its entirety and agree
as follows:
1. DEFINED TERMS. The terms defined below shall have the following
meanings for purposes of this Agreement:
(a) "AGREEMENT" means this Amended and Restated Senior
Management Change of Control Agreement, as amended, restated,
supplemented or modified from time to time and together with any
exhibits or attachments hereto.
(b) "BANCORP" means Patriot National Bancorp, Inc., a
Connecticut corporation.
(c) "BANK" means Patriot National Bank, a national banking
association, and wholly-owned subsidiary of Bancorp.
(d) "BOARD OF DIRECTORS OF BANCORP" shall mean the board of
directors of Bancorp.
(e) "BOARD OF DIRECTORS OF BANK" shall mean the board of
directors of Bank.
(f) "Change of Control" means:
(i) a change in control of the direction and
administration of Patriot's business of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or any successor rule or regulation)
promulgated under the Exchange Act, whether or not Bank or
Bancorp is then subject to such reporting requirements;
(ii) any person (as such term is used in Sections 14
(d) and 14(d)(2) of the Exchange Act but excluding any employee
benefit plan of Patriot), other than (x) Xxxxxx Xx Xxxx and his
family members or family trusts, (y) Xxxx XxXxxx and his family
members or family trusts, or (z) any trustee or other fiduciary
holding securities under an employee benefit plan of Patriot, by
merger or otherwise, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Bancorp representing 35% or more of
the combined voting power of Bancorp's outstanding securities
then entitled ordinarily (and apart from rights accruing under
special circumstances) to vote for the election of directors;
(iii) the Board of Directors of Bancorp shall approve
a sale of all or substantially all of the assets of Bancorp;
(iv) the Board of Directors of Bank shall approve a
sale of all or substantially all of the assets of Bank;
(v) the Board of Directors of Bancorp shall approve
any merger, consolidation or like business combination or
reorganization of Bancorp, the consummation of which would
result in the occurrence of any event described in clause (ii)
above;
(vi) the Board of Directors of Bank shall approve any
merger, consolidation or like business combination or
reorganization of Bank, the consummation of which would result
in the occurrence of any event described in clause (ii) above;
(vii) the Board of Directors of Bancorp determines
that any person (as such term is used in Sections 14(d) and
14(d)(2) of the Exchange Act but excluding any employee benefit
plan of Bancorp), other than (i) Xxxxxx Xx Xxxx and his family
members of family trusts or (ii) Xxxx XxXxxx and his family
members or family trusts, directly or indirectly exercises a
controlling influence over the management or policies of
Bancorp; or
(viii) the Board of Directors of Bank determines that
any person (as such term is used in Sections 14(d) and 14(d)(2)
of the Exchange Act but excluding any employee benefit plan of
Bank), other than (i) Xxxxxx Xx Xxxx and his family members or
family trusts or (ii) Xxxx XxXxxx and his family members or
family
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trusts, directly or indirectly exercises a controlling influence
over the management or policies of Bank;
PROVIDED, HOWEVER, that (i) the filing of a Form F-11A by any
person or (ii) any event mandated or directed by a regulatory body
having jurisdiction over Bancorp's or Bank's operations, shall not be
deemed a Change of Control.
(g) "CHANGE OF CONTROL PAYMENTS" has the meaning set forth
in Section 2 of this Agreement.
(h) "CAUSE" shall mean (i) the continued failure by
Executive substantially to perform his duties as an executive officer of
Bank (other than any such failure resulting from his incapacity due to
physical or mental illness) or (ii) the engaging by Executive in conduct
which is materially injurious to Bank, monetarily or otherwise, in
either case as determined by the Board of Directors of Bank.
(i) "DISABILITY" means any physical or mental condition that
(i) would qualify Executive for a disability benefit under any long-term
disability plan maintained by Bank and applicable to such Executive or
(ii) renders Executive unable to perform substantially his obligations
as an executive officer of Bank for the reasonably foreseeable future
(not less than ninety (90) days), as determined by the Board of
Directors of Bank after considering competent medical evidence.
(j) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
(k) "INTERNAL REVENUE CODE" means the Internal Revenue Code
of 1986, as amended.
(l) "Party" or "Parties" means, individually or
collectively, Executive and Bank.
(m) "PATRIOT" means, collectively, Bancorp and Bank.
2. CHANGE OF CONTROL PAYMENT.
(a) If there is a Change of Control, (i) during any time
Executive is a full-time executive officer of Bank, or (ii) within six
(6) months following Executive's termination of employment by Bank,
other than for Cause or by reason of Executive's death or Disability,
then Executive shall be entitled to receive a payment (the "CHANGE OF
CONTROL PAYMENT") in consideration of services previously rendered to
Bank. The Change of Control Payment shall be made as a lump sum cash
payment equal to one times (1x) Executive's annual base salary
(calculated as of the date of the Change of Control or, in the case of
Section 2(a)(ii), calculated as of the date of prior termination). The
Change of Control Payment shall be paid in full within 15 days following
the date of the Change of Control; provided, however, that such payment
may be-deferred for such period (not to exceed 90 days) following the
date of the Change of Control as the Bank requests that Executive
continue to provide services to it. If Executive voluntarily terminates
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employment with Bank prior to the date (not more than 90 days following
the date of the Change of Control) specified by Bank, Executive shall
forfeit his right to receive the Change of Control Payment. The Change
of Control Payment shall not be reduced by any compensation which
Executive may receive from Bank or from other employment with another
employer should Executive's employment with Bank terminate.
(b) All payments made pursuant to this Agreement will be
subject to withholding of applicable income and employment taxes
(c) If, after a Change of Control Executive prevails in any
action to enforce this Agreement, then Bank shall be obligated to
reimburse Executive far all reasonable fees and expenses, including
reasonable attorneys' fees of counsel chosen by Executive in his sole
discretion.
(d) Notwithstanding any other provision of this Agreement or
of any other agreement, understanding or compensation plan, Bank shall
not be obligated to pay any amounts which violate restrictions imposed,
or which may in the future be imposed, on such payments by Bank pursuant
to Section 18(k)(l) of the Federal Deposit Insurance Act, or any
regulations or orders which are or may be promulgated thereunder; nor
shall any payments be made which would constitute an "unsafe or unsound
banking practice" pursuant to 12 U.C.C. Section 18(b).
(e) Notwithstanding any other provision hereof, in
the event that any payment or benefit received or to be received by
Executive in connection with a Change of Control would not be deductible
(in whole or part) as a result of Section 280G of the Internal Revenue
Code, by Bank, an affiliate or other person making such payment or
providing such benefit, the Change of Control Payment shall reduced
until no portion is not deductible, or the Change of Control Payment is
reduced to zero. For purposes of this limitation, (i) no portion of the
Change of Control Payment the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the date of payment of
the Change of Control Payment shall be taken into account; (ii) no
portion of the Change of Control Payment shall be taken into account
which in the opinion of tax counsel selected by Bank's independent
auditors and acceptable to Executive does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code; (iii) the Change of Control Payment shall be reduced only
to the extent necessary so that such payment shall constitute reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Internal Revenue Code or are otherwise not
subject to disallowance as deductions, in the opinion of the tax counsel
referred to in clause (ii); and (iv) the value of any non cash benefit
or any deferred payment or benefit included in the Change of Control
Payment shall be determined by Bank's independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Internal
Revenue Code.
3. TERM. This Agreement shall terminate on the earliest of: (i)
immediately, upon Executive's termination of employment with Bank for Cause,
death or Disability, (ii) six months
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following Executive's termination of employment with Bank, other than for Cause,
death or Disability, or (iii) six months following receipt by Executive of the
Change of Control Payment.
4. ASSIGNMENT. This Agreement will be binding on and will inure to
the benefit of the Parties hereto and their respective successors, permitted
assigns and legal representatives. Without otherwise limiting the foregoing,
"Bank" as used herein shall refer to any successor institution whether by
merger, consolidation, acquisition or otherwise.
5. NON-COMPETITION AGREEMENT. If Executive receives the Change of
Control Payment, Executive absolutely and unconditionally agrees with Bank that,
for a period of six (6) months from the date of receipt of the Change of Control
Payment, Executive will not, anywhere in the Restricted Area (as defined below),
either directly or indirectly, solely or jointly with any person or persons (a
"COMPETITOR"), as an employee, consultant or advisor (whether or not engaged in
business for profit), or as an individual proprietor, partner, shareholder
(provided that ownership of less than 5% of the voting power shall be
permitted), director, officer, joint venturer, investor (provided that such
investment will not be a violation if it is limited to less than 5% of the
ownership of such entity), lender or in any other capacity, compete with the
business of the Bank as conducted or proposed to be conducted as of the date of
the Change of Control. As used herein, "RESTRICTED AREA" shall be the cities of
Stamford and Norwalk, Connecticut, the Town of Greenwich, Connecticut, and any
town or branch in which the Bank has an office as of the time of the Change of
Control.
6. ENTIRE AGREEMENT; NO WAIVER. This Agreement contains the entire
agreement between the Parties with respect to the subject matter herein and may
not be modified or amended except by a written instrument signed by the Parties.
Neither the failure to insist upon strict performance of any of the terms,
covenants or conditions of this Agreement, nor the acceptance of monies due
hereunder with knowledge of a breach of this Agreement, shall be deemed a waiver
of any rights or remedies that either Party may have or a waiver of any
subsequent breach or default in any of such agreements, terms, covenants and
conditions.
7. FURTHER INSTRUMENTS. Each of the Parties agrees to execute all
further instruments and documents and to take all further action as the other
Party may reasonably request in order to effectuate the terms and purposes of
this Agreement.
8. MODIFICATION AND SEVERABILITY. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be deemed
modified to the extent necessary to make it enforceable under applicable law. If
any such provision is not enforceable as set forth in the preceding sentence,
the unenforceability of such provision shall not affect the other provisions of
this Agreement, but this Agreement shall be construed as if such unenforceable
provision had never been contained herein.
9. GOVERNING LAW. It is the intention of the Parties that the
internal substantive laws, and not the laws of conflicts, of the State of
Connecticut should govern the enforceability and validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
Parties.
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10. JURY WAIVER. The Parties, and any principals for whom they are
agents, waive the right to a trial by jury in any action arising between the
Parties or their principals under this Agreement, whether such actions are
claims in contract, tort, statute, or otherwise, or made by claim, counterclaim,
third-party claim or otherwise.
11. NOTICES. All notices, requests, consents, instructions,
approvals and other communications required or permitted hereunder shall be
validly given, if in writing and delivered personally, or sent by registered or
certified mail or nationally recognized air courier service, postage prepaid at
the address listed above or at such other address as such Party may specify by
written notice to each other Party. Each such notice, request, consent,
instruction, approval and other communication shall for all purposes of this
Agreement be treated as being effective or having been given when delivered, if
delivered personally, or, if sent by mail, at the earlier of its actual receipt
or three (3) days after the same has been deposited in a regularly maintained
receptacle for the deposit of United States mail, addressed and postage prepaid
as aforesaid, and if by air courier, one (1) day after the same has been
deposited with such air courier.
12. HEADINGS. The titles and headings of the various sections and
paragraphs in this Agreement are intended solely for convenience of reference
and are not intended for any other purpose whatsoever, or to explain, modify or
place any construction upon or on any of the provisions of this Agreement.
13. INTERPRETATION. This Agreement shall be construed as a whole
according to its fair meaning. It shall not be construed strictly for or against
either Party. Unless the context indicates otherwise, the term "or" shall be
deemed to include the term "and" and the singular or plural number shall be
deemed to include the other.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but which collectively
will constitute one and the same instrument.
[Signature page follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first above written.
PATRIOT NATIONAL BANK
By: /s/ Xxxxxx Xx Xxxx
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Chairman of the Board of Directors
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
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