Exhibit 10.5.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") made this ____________day of ___________,
2006, by and between HAMPDEN BANK, a Massachusetts-chartered savings bank, with
its principal administrative office at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000
(the "Bank"), HAMPDEN BANCORP, INC., a corporation organized under the laws of
the State of Delaware, the holding company for the Bank (the "Holding Company"),
and XXXXXX X. XXXXXX (the "Executive").
WHEREAS, Executive serves in a position of substantial responsibility; and
WHEREAS, the Bank wishes to assure Executive's services for the term of
this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank during
the term of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, terms,
provisions, and conditions contained in this Agreement, the parties hereby agree
as follows:
1. EMPLOYMENT.
(a) POSITION. Executive is employed as the President and Chief Executive
Officer of the Bank. Executive will perform all duties and shall have all powers
commonly incident to the offices of President and CEO of the Bank or which,
consistent with those offices, are delegated to him by the Board of Directors of
the Bank (the "Board"). During the term of this Agreement, Executive also agrees
to serve, if elected, as an officer and/or director of any subsidiary or
affiliate of the Bank or the Holding Company and to carry out the duties and
responsibilities reasonably appropriate to those offices.
(b) TERM. The period of Executive's employment under this Agreement shall
be deemed to have commenced as of the date written above and shall continue for
a period of thirty-six (36) full calendar months ("Initial Term"), or until the
employment relationship is terminated pursuant to Sections 3 or 4 hereof. Upon
the expiration of the Initial Term, this Agreement will be renewed automatically
for successive thirty-six-month periods ("Renewal Terms"), unless the Board or
Executive elects not to extend the term of the Agreement by giving written
notice to the other party in accordance with the terms of this Agreement.
Executive's employment shall continue during such Renewal Terms until the
employment relationship is terminated pursuant to Sections 3 or 4 hereof.
(c) DEVOTION TO DUTIES AND LOYALTY. While Executive is employed hereunder,
he will: (i) use his best efforts, skill and abilities to perform faithfully all
duties assigned to him pursuant to this Agreement, (ii) devote his full business
time and energies to the business and the affairs of the Bank; (iii) not render
any similar services for his own account or any other person or entity without
the prior written consent of the Bank; and (iv) not undertake any other
full-time employment from any person or entity without prior written consent of
the Bank. However, from time to time, Executive may, with the permission of the
Board, serve on the boards of directors of, and hold any other offices or
positions in, companies or organizations that will not present any conflict of
interest with the Bank or any of its
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subsidiaries or affiliates, unfavorably affect the performance of the
Executive's duties pursuant to this Agreement, or violate any applicable statute
or regulation.
2. COMPENSATION.
(a) BASE SALARY. The Bank agrees to pay Executive a base salary at the
annual rate of $ per year (less applicable withholding taxes), payable in
accordance with the Bank's customary payroll practices.
(1) The Board shall review annually the rate of the Executive's
base salary based upon factors they deem relevant, and may maintain
or increase his base salary, in its discretion. In addition, the
Board may decrease the base salary in the event that the Board
determines that financial exigencies require such decrease,
provided that the compensation of all executives of the Bank is
also reduced at the same time in a substantially commensurate
manner.
(2) In the absence of action by the Board, the Executive shall
continue to receive a base salary at the annual rate specified on
the Effective Date or, if another rate has been established under
the provisions of this Section 2, the rate last properly
established by action of the Board under the provisions of this
Section 2.
(b) BONUSES. Executive shall be eligible to participate in discretionary
bonuses or other discretionary incentive compensation programs that the Bank may
award from time to time to Executives pursuant to bonus plans or otherwise.
(c) STOCK-BASED COMPENSATION. The Executive will be eligible to
participate in the Bank's Employee Stock Ownership Plan and to be considered by
the Board for grants or awards of stock options or other stock-based
compensation under any stock-based incentive plans that the Bank elects to
implement. All such grants or awards shall be governed by the relevant plan
documents and requirements and shall be evidenced by the Bank's then-standard
form of stock option, restricted stock or other applicable agreement.
(d) BENEFIT PLANS. Executive shall be eligible to participate in such
life insurance, medical, dental, pension, profit sharing, and retirement plans
and other programs and arrangements as may be approved from time to time by the
Bank for the benefit of its employees.
(e) VACATIONS AND LEAVE. The Executive shall be entitled to accrue and
take four (4) weeks of vacation each year at such times as shall be consistent
with the Bank's vacation policies and, in the Bank's judgment, with the Bank's
vacation schedule for senior executives and other employees. Vacation leave
cannot be accumulated from year to year. The Executive also shall be entitled to
other paid sick, personal or other leave in accordance with the Bank's policy
for senior executives, or otherwise as approved by the Board. In addition to
paid vacation and other leave, the Board may grant to the Executive a leave or
leaves of absence, with or without pay, at such time or times and upon such
terms and conditions as the Board in its discretion may determine.
(f) EXPENSE PAYMENTS AND REIMBURSEMENTS. Executive shall be reimbursed for
all reasonable out-of-pocket business expenses that Executive shall incur in
connection with his
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services under this Agreement upon substantiation of such expenses in accordance
with applicable policies of the Bank.
(g) AUTOMOBILE ALLOWANCE. During the term of this Agreement, the Executive
shall be entitled to the use of a Bank-owned automobile. The Bank shall provide
car insurance, maintenance and gas for said automobile. Executive shall comply
with all reasonable reporting and expense limitations on the use of such
automobile as may be established by the Bank from time to time, and the Bank
shall annually include on Executive's Form W-2 any amount of income attributable
to Executive's personal use of such automobile.
3. TERMINATION AND TERMINATION PAY.
Executive's employment under this Agreement may be terminated in the
following circumstances:
(a) DEATH. Executive's employment under this Agreement will terminate upon
Executive's death during the term of this Agreement. Upon any termination for
death, Executive's estate will receive (1) Executive's base salary through the
effective date of termination, (2) payment of any bonuses or incentive
compensation with respect to the fiscal year ended prior to the fiscal year in
which the termination date occurs that was earned and unpaid, and (3)
reimbursement of all expenses for which Executive is entitled to be reimbursed
pursuant to Section 2 hereof, but for which he has not yet been reimbursed
(collectively, the "Accrued Compensation.").
(b) RETIREMENT. This Agreement will terminate upon Executive's retirement
under the retirement benefit plan or plans in which Executive participates
pursuant to Section 2(c) of this Agreement or otherwise. Upon any termination
for retirement, Executive will receive all Accrued Compensation.
(c) DISABILITY. The Board or Executive may terminate Executive's
employment after having determined that Executive has a Disability. For purposes
of this Agreement, "Disability" shall have the same meaning given to such term
under the Bank's Long-Term Disability plan as in effect from time to time, or,
if no such plan is then in effect, the meaning described in Section 22(c)(3) of
the Internal Revenue Code (the "Code").
Upon any termination for disability, Executive will no longer be obligated
to perform services under this Agreement. The Bank further will pay Executive,
as Disability pay, an amount equal to one-hundred percent (100%) of Executive's
bi-weekly rate of base salary in effect as of the date of Executive's
termination of employment due to Disability. The Bank will make Disability
payments on a monthly basis commencing on the first day of the month following
the effective date of Executive's termination of employment due to Disability
and ending on the earlier of: (A) the date Executive returns to full-time
employment in the same capacity as he was employed prior to Executive's
termination for Disability; (B) Executive's death; (C) Executive's attainment of
age 65; or (D) the date this Agreement would have expired had Executive's
employment not terminated by reason of Disability. Such payments shall be
reduced by the amount of any short- or long-term disability benefits payable to
Executive under any other disability programs sponsored by the Bank or its
affiliates. In addition, during any period of Executive's Disability, the Bank
will continue to provide Executive and his dependents, to the greatest extent
possible, with continued coverage under all benefit plans (including, without
limitation, retirement plans and medical, dental and life
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insurance plans) in which Executive and/or his dependents participated prior to
Executive's Disability on the same terms as if he remained actively employed by
the Bank.
(d) TERMINATION FOR CAUSE. The Board may, by written notice to Executive,
immediately terminate his employment at any time for "Cause." Upon termination
for Cause, Executive shall receive all Accrued Compensation. Termination for
Cause shall mean termination because of, in the good faith determination of the
Board, Executive's:
(1) Act of dishonesty, falsification of Bank or Holding Company
documents, or other intentional misrepresentation related to
business matters of the Bank or the Holding Company;
(2) Incompetence;
(3) Willful misconduct or action in bad faith;
(4) Breach of fiduciary duty;
(5) Failure to substantially perform his stated duties and
obligations to the Bank, including, but not limited to, one or more
acts of gross negligence;
(6) Willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) that reflects adversely on
the reputation of the Bank or the Holding Company, any felony
conviction, any violation of law involving moral turpitude, or any
violation of a final cease-and-desist order;
(7) Commission of any tortious act, unlawful act or malfeasance
that causes or reasonably could cause harm to the Bank or the
Holding Company;
(8) Material breach of any provision of this Agreement, or the
written policies of the Bank and/or Holding Company (including, but
not limited to the Hampden Bank Code of Ethics and Conflict of
Interest Policy); and/or
(9) Violation of the Securities Act of 1933 or the Securities
Exchange Act of 1934.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may voluntarily
terminate his employment during the term of this Agreement upon at least sixty
(60) days prior written notice to the Board. In its discretion, the Board may
accelerate Executive's termination date. Upon Executive's voluntary termination,
he will receive all Accrued Compensation as of the date of his termination (as
determined by the Board).
(f) WITHOUT CAUSE OR WITH GOOD REASON. The Board may, by written notice to
Executive, immediately terminate his employment at any time for a reason other
than Cause (a termination "Without Cause") and Executive may, by written notice
to the Board, immediately terminate this Agreement at any time within ninety
(90) days following an event constituting "Good Reason," as defined below (a
termination "With Good Reason").
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In the event of termination under this Section 3(f) (other than a
termination without Cause or for Good Reason within two (2) years of a Change in
Control (defined in Section 4(a)), in which event Section 4(c) shall apply), the
Bank shall pay Executive:
(1) all Accrued Compensation;
(2) a severance payment equal to his base salary for the remaining
term of the Agreement, paid periodically in accordance with the
Bank's customary payroll practices over the remaining term of the
Agreement; and
(3) directly, or by reimbursing the Executive for, the monthly
premium for continuation coverage under the Bank's health and
dental insurance plans, to the same extent that such insurance is
provided to persons currently employed by the Bank, provided that
the Executive makes a timely election for such continuation
coverage under the Consolidate Omnibus Budget Reconciliation Act of
1985 ("COBRA"). The "qualifying event" under COBRA shall be deemed
to have occurred on the termination date. The Bank's obligation
under this paragraph shall end 18 months after the termination date
or at such earlier date as the Executive becomes eligible for
comparable coverage under another employer's group coverage. The
Executive agrees to notify the Bank promptly and in writing of any
new employment and to make full disclosure to the Bank of the
health and dental insurance coverage available to him through such
new employment.
In addition, Executive shall, for the remaining term of the Agreement,
receive the benefits he would have received during the remaining term of the
Agreement under any retirement programs (whether tax-qualified or non-qualified)
in which Executive participated prior to his termination (with the amount of the
benefits determined by reference to the benefits received by Executive or
accrued on Executive's behalf under such programs during the twelve (12) months
preceding his termination) and continue to participate in any benefit plans of
the Bank that provide life insurance, upon terms no less favorable than the most
favorable terms provided to employees of the Bank during such period. In the
event that the Bank is unable to provide such coverage by reason of Executive no
longer being an employee, the Bank shall provide Executive with comparable
coverage on an individual policy basis.
"Good Reason" shall exist if, without Executive's express written
consent, the Bank or the Holding Company materially breaches any of its
obligations under this Agreement. Such a material breach shall be deemed to
occur upon any of the following:
(1) A material reduction in Executive's responsibilities or
authority in connection with his employment with the Bank or the
Holding Company;
(2) Assignment to Executive of duties of a non-executive nature or
duties for which he is not reasonably equipped by his skills and
experience;
(3) Failure of Executive to be nominated or renominated to the
Board to the extent Executive is a Board member prior to the
Effective Date;
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(4) A material reduction in salary or benefits contrary to the
terms of this Agreement, or, following a Change in Control (as
defined in Section 4 of this Agreement), any material reduction in
salary or benefits below the amounts Executive was entitled to
receive before the Change in Control;
(5) A requirement that Executive relocate his principal business
office or his principal place of residence outside of the area
consisting of a thirty-five (35) mile radius from the current main
office of the Bank and any branch of the Bank, or the assignment to
Executive of duties that would reasonably require such a
relocation; or
(6) Liquidation or dissolution of the Bank or the Holding Company.
Notwithstanding the foregoing, a reduction or elimination of Executive's
benefits under one or more benefit plans maintained as part of a good faith,
overall reduction or elimination of such plans or benefits, applicable to all
participants in a manner that does not discriminate against Executive (except as
such discrimination may be necessary to comply with law), will not constitute an
event of Good Reason or a material breach of this Agreement, provided that
benefits of the same type or to the same general extent as those offered under
such plans before the reduction or elimination are not available to other
officers of the Bank or any affiliate under a plan or plans in or under which
Executive is not entitled to participate.
4. PAYMENTS IN CONNECTION WITH A CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" shall mean
any of the following events:
(1) MERGER. The Bank or the Holding Company merges into or
consolidates with another entity, or merges another corporation
into the Bank or Holding Company, and as a result, less than a
majority of the combined voting power of the resulting corporation
immediately after the merger or consolidation is held by persons
who were stockholders of the Bank or the Holding Company
immediately before the merger or consolidation;
(2) ACQUISITION OF SIGNIFICANT SHARE OWNERSHIP. There is filed, or
is required to be filed, a report on Schedule 13D or another form
or schedule (other than Schedule 13G) required under Sections 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended, if the
schedule discloses that the filing person or persons acting in
concert has or have become the beneficial owner of 25% or more of a
class of the Bank or the Holding Company's voting securities, but
this clause (ii) shall not apply to beneficial ownership of Bank or
Holding Company voting shares held in a fiduciary capacity by an
entity of which the Bank or the Holding Company directly or
indirectly beneficially owns 50% or more of its outstanding voting
securities.
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(3) CHANGE IN BOARD COMPOSITION. During any period of two
consecutive years, individuals who constitute the Bank's or the
Holding Company's Board of Directors at the beginning of the
two-year period cease for any reason to constitute at least a
majority of the Bank's or the Holding Company's Board of Directors;
provided, however, that for purposes of this clause (iii), each
director who is first elected by the board (or first nominated by
the board for election by the members) by a vote of at least
two-thirds (2/3) of the directors who were directors at the
beginning of the two-year period shall be deemed to have also been
a director at the beginning of such period; or
(4) SALE OF ASSETS. The Bank or the Holding Company sells to a
third party all or substantially all of its assets.
(5) TENDER OFFER. A tender offer is made for 25% or more of the
voting securities of the Bank or the Holding Company.
(b) In the event that, upon a change in ownership or control within the
meaning of Section 409A(a)(2)(A)(v) of the Code, Executive is offered employment
with the Bank or its successor that is comparable in terms of compensation and
responsibilities, and Executive stays for six (6) months after the change in
ownership or control is completed, Executive shall receive a lump sum payment in
the amount of three (3) months base salary.
(c) TERMINATION. If within the period ending two (2) years after a
Change in Control, (i) the Bank or the Holding Company terminates Executive's
employment Without Cause (defined in Section 3(d) above), or (ii) Executive
voluntarily terminates his employment With Good Reason (defined in Section 3(f)
above), the Bank will, within ten (10) calendar days of the termination of
Executive's employment, pay Executive:
(1) all Accrued Compensation;
(2) one lump-sum cash payment equal to three (3) times Executive's
average "Annual Compensation" over the five (5) most recently
completed calendar years, ending with the year immediately
preceding the effective date of the Change in Control. In
determining Executive's average "Annual Compensation", "Annual
Compensation" will include base salary and any other taxable
income, including, but not limited to, amounts related to the
granting, vesting or exercise of restricted stock or stock option
awards, commissions, bonuses, retirement benefits, director or
committee fees and fringe benefits paid or accrued for Executive's
benefit. Annual compensation will also include profit sharing,
Employee stock ownership plan and other retirement contributions or
benefits, including to any tax-qualified plan or arrangement
(whether or not taxable) made or accrued on behalf of Executive for
such year; and
(3) directly, or by reimbursing the Executive for, the monthly
premium for continuation coverage under the Bank's health and
dental insurance plans, to the same extent that such insurance is
provided to persons currently
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employed by the Bank, provided that the Executive makes a timely
election for such continuation coverage under the Consolidate
Omnibus Budget Reconciliation Act of 1985 ("COBRA"). The
"qualifying event" under COBRA shall be deemed to have occurred on
the termination date. The Bank's obligation under this paragraph
shall end 18 months after the termination date or at such earlier
date as the Executive becomes eligible for comparable coverage
under another employer's group coverage. The Executive agrees to
notify the Bank promptly and in writing of any new employment and
to make full disclosure to the Bank of the health and dental
insurance coverage available to him through such new employment.
In addition, in such event, the Executive shall, for a thirty-six (36) month
period following his termination of employment, receive the benefits he would
have received over such period under any retirement programs (whether
tax-qualified or nonqualified) in which the Executive participated prior to his
termination (with the amount of the benefits determined by reference to the
benefits received by the Executive or accrued on his behalf under such programs
during the twelve (12) months preceding the Change in Control) and continue to
participate in any benefit plans of the Bank that provide life insurance upon
terms no less favorable than the most favorable terms provided to Executives of
the Bank during such period. In the event that the Bank is unable to provide
such coverage by reason of the Executive no longer being an Executive, the Bank
shall provide the Executive with comparable coverage on an individual policy.
(d) The cash payments made under Section 4(c) shall be made in lieu of
any payments also required under Section 3(f) of this Agreement because of
Executive's termination of employment.
5. CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION.
(a) CONFIDENTIALITY.
(1) "Confidential Information" is information however delivered,
disclosed, or discovered during the term of Executive's employment,
which Executive has, or in the exercise of ordinary prudence should
have, reason to believe is confidential or which the Bank
designates as confidential including, but not limited to:
(i) BANK INFORMATION: Bank or Holding Company proprietary
information, technical data, trade secrets or know-how,
including, but not limited to: research, processes, pricing
strategies, communication strategies, sales strategies, sales
literature, sales contracts, product plans, products,
inventions, methods, services, computer codes or instructions,
software and software documentation, equipment, costs, customer
lists, business studies, business procedures, finances and
other business information disclosed to Executive by the Bank
or the Holding Company, either directly or indirectly in
writing, orally or by drawings or observation of parts or
equipment and such other
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documentation and information as is necessary in the conduct of
the business of the Bank or the Holding Company; and
(ii) THIRD PARTY INFORMATION: confidential or proprietary
information received by the Bank or the Holding Company from
third parties.
(2) The Bank's failure to xxxx any of the Confidential Information
as confidential or proprietary will not affect its status as
Confidential Information.
(3) Executive also agrees that the terms, conditions and subject
matter of this Agreement are considered Confidential Information.
(4) Confidential Information does not include information that has
ceased to be confidential by reason of any of the following: (i)
was in Executive's possession prior to the date of his initial
employment with the Bank, provided that such information is not
known by Executive to be subject to another confidentiality
agreement with, or other obligation of secrecy to, the Bank, the
Holding Company, or another party; (ii) is generally available to
the public and became generally available to the public other than
as a result of a disclosure in violation of this Agreement; (iii)
became available to Executive on a non-confidential basis from a
third party, provided that such third party is not known by
Executive to be bound by a confidentiality agreement with, or other
obligation of secrecy to, the Bank, the Holding Company, or another
party or is otherwise prohibited from providing such information to
Executive by a contractual, legal or fiduciary obligation; or (iv)
Executive is required to disclose pursuant to applicable law or
regulation (as to which information, Executive will provide the
Bank with prior notice of such requirement and, if practicable, an
opportunity to obtain an appropriate protective order).
(5) Executive shall not, either during or after the termination of
his or her employment with the Bank, communicate or disclose to any
third party the substance or content of any Confidential
Information (defined above), or use such Confidential Information
for any purpose other than the performance of Executive's
obligations hereunder. Executive acknowledges and agrees that any
Confidential Information obtained by Executive during the
performance of his or her employment concerning the business or
affairs of the Bank, or any subsidiary, affiliate or joint venture
of the Bank is the property of the Bank, or such subsidiary,
affiliate or joint venture of the Bank, as the case may be.
(6) Executive agrees to return all Confidential Information,
including all copies and versions of such Confidential Information
(including, but not limited to, information maintained on paper,
disk, CD-ROM, network server, or any other retention device
whatsoever) and other property of the Bank, to
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the Bank within two (2) business days of his separation from the
Bank (regardless of the reason for the separation).
(7) RECOGNITION OF GOOD WILL. Executive further recognizes and
acknowledges that in the course of employment he is and will be
introduced to customers and others with important relationships to
the Bank. Executive acknowledges and agrees that any and all
"goodwill" associated with any existing or prospective customer,
account or business partner belongs exclusively to the Bank
including, but not limited to, any goodwill created as a result of
direct or indirect contacts or relationships between Executive and
any existing or prospective customers, accounts, business partners
and other key relationships of the Bank.
(b) NON-COMPETITION. In view of the covenants above, and as a material
inducement to the Bank to enter into this Agreement and to pay to Executive the
compensation stated in Section 2, Executive agrees that during his employment
and for a period of one (1) year thereafter (the "Non-Competition Period"), he
shall not, for himself or on behalf of any other person or entity, directly or
indirectly own, manage, control, participate in, consult with, render services
for or in any manner engage in or have a financial interest in any business that
competes with the depository, lending, or other business activities of the Bank
in any city, town or county in which Executive's normal business office is
located, or the Bank has an office or has filed an application for regulatory
approval to establish an office, determined as of the effective date of such
termination, except as agreed to pursuant to a resolution duly adopted by the
Bank.
Executive further agrees that during the Non-Competition Period, he will
not serve as an officer, director or employee of any bank holding company, bank,
savings association, savings and loan holding company, mortgage company or other
financial institution that offers products or services competing with those
offered by the Bank or its subsidiaries or affiliates from any office within
thirty-five (35) miles from the main office of the Bank or any branch of the
Bank.
The foregoing shall not prohibit Executive from being a passive owner of
not more than 5% of the outstanding stock of a corporation which is publicly
traded, so long as Executive has no active participation in the business of the
corporation.
(c) NON-SOLICITATION. During the Non-Competition Period Executive shall
not, either individually or on behalf of or through any third party, directly or
indirectly, engage in the following activities:
(1) CUSTOMER, CLIENT AND VENDOR NON-SOLICITATION. Solicit, divert,
appropriate or take away, or attempt to solicit, divert,
appropriate or take away, the business or patronage of any of the
clients, customers or vendors of the Bank that were clients,
customers or vendors of the Bank while Executive was employed by
the Bank and that were serviced by Executive, or prospective
clients, customers or vendors with which Executive had written or
oral communications while Executive was employed by the Bank.
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(2) EMPLOYEE NON-SOLICITATION. Hire, retain, recruit, entice,
induce, solicit or encourage any employee or consultant to
terminate their employment with, or otherwise cease their
relationship with, the Bank or its parent, subsidiaries or
affiliates. This section 5(c)(2) shall prohibit the aforesaid
actions by Executive with respect to any person both while such
person is a current employee or consultant of the Bank or such
related entities, and for the ninety (90) day period after such
person's employment or consultancy with the Bank terminates.
The terms of this Section 5 of the Agreement are in addition to, and not
in lieu of, any other contractual, statutory or common law obligations that
Executive may have relating to the protection of the Bank's Confidential
Information or its property. The terms of this section shall survive
indefinitely Executive's employment with the Bank, provided that the
Confidential Information of the Bank remains confidential and is not a matter of
public knowledge.
6. RETURN OF PROPERTY. Within two (2) business days of the termination of
Executive's employment hereunder for any reason or for no reason and at any time
requested by the Bank, Executive will deliver to the Bank any property of the
Bank that may be in his possession, including, but not limited to, memoranda,
notes, records, reports or other documents or photocopies of the same.
7. POST-TERMINATION OBLIGATIONS. Any and all payments, benefits and vested
rights due to Executive under this Agreement are subject to his compliance with
Sections 1(c), 5 and 6 of this Agreement. Upon a good faith finding by the Board
that Executive breached Sections 1(c), 5 or 6 of this Agreement, the Bank shall
be excused from making any and all payments under this Agreement and Executive
shall return to the Bank all previous payments made to him under this Agreement.
8. INDEMNIFICATION AND LIABILITY INSURANCE. Subject to and limited by
Section 22 of this Agreement, the Bank shall provide the following:
(a) INDEMNIFICATION. The Bank agrees to indemnify Executive (and his
heirs, executors, and administrators), and to advance expenses related to this
indemnification, to the fullest extent permitted under applicable law and
regulations against any and all expenses and liabilities that Executive
reasonably incurs in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his service as a director or
Executive of the Bank or any of its subsidiaries or affiliates (whether or not
he continues to be a director or Executive at the time of incurring any such
expenses or liabilities). Covered expenses and liabilities include, but are not
limited to, judgments, court costs, and attorneys' fees and the costs of
reasonable settlements, subject to Board approval, if the action is brought
against Executive in his capacity as an Executive or director of the Bank or any
of its subsidiaries or affiliates. Indemnification for expenses will not extend
to matters related to Executive's termination for Cause. Notwithstanding
anything in this Section 8(a) to the contrary, the Bank will not be required to
provide indemnification prohibited by applicable law or regulation including,
but not limited to, Section 409A of the Code. The obligations of this Section 8
shall survive the term of this Agreement by a period of six (6) years.
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(b) INSURANCE. During the period for which the Bank must indemnify
Executive under this Section, the Bank will provide Executive (and his heirs,
executors, and administrators) with coverage under a directors' and officers'
liability policy, at the Bank's expense, that is at least equivalent to the
coverage provided to directors and senior executives of the Bank and its
subsidiaries.
9. LIMITATION ON PAYMENTS. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Executive
(i) constitute "parachute payments" within the meaning of Section 280G of the
Code and (ii) but for this Section 9, would be subject to the excise tax imposed
by Section 4999 of the Code, then the Executive's severance benefits shall be
either:
(a) delivered in full, or
(b) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by the Executive on an after-tax basis, of the greatest amount of
severance benefits, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code. Unless the Bank and the
Executive otherwise agree in writing, any determination required under this
Section 9 shall be made in writing by the Bank's independent public accountants
immediately prior to Change in Control (the "Accountants"), whose determination
shall be conclusive and binding upon the Executive and the Bank for all
purposes. For purposes of making the calculations required by this Section 1,
the accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Bank and
the Executive shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section. The Bank shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 9.
10. DISCLOSURE TO FUTURE AND PROSPECTIVE EMPLOYERS. Executive agrees that
the Bank may notify any of his future or prospective employers or other third
parties of this Agreement and may provide a copy of this Agreement to such
parties without Executive's further consent.
11. INJUNCTIVE RELIEF. The parties hereto, recognizing that irreparable
injury will result to the Bank, its business and property in the event of
Executive's breach or threatened breach of Sections 1(c), 5, and 6 of this
Agreement, agree that in the event of any such breach, the Bank, will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain Executive's violation as well as any violations of his
partners, agents, servants, Executives and all persons acting for or under
Executive's direction. Nothing herein will be construed as prohibiting the Bank
from pursuing any other remedies available to the Bank for such breach or
threatened breach, including the recovery of damages from Executive.
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12. SUCCESSORS AND ASSIGNS.
(a) SUCCESSOR TO BANK. The Bank shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation or otherwise, to
all or substantially all of the business or assets of the Bank or the Holding
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.
(b) SUCCESSOR TO THE EXECUTIVE. Since the Bank is contracting for the
unique and personal skills of the Executive, neither this Agreement nor any
right or interest hereunder will be assignable or transferable by the Executive,
his beneficiaries or legal representatives, except by will or by the laws of
descent and distribution. This Agreement will inure to the benefit of and be
enforceable by the Executive's legal personal representative.
13. NO MITIGATION. Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment.
14. NOTICES. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed to the Bank at its principal business offices and to
Executive at his home address as maintained in the records of the Bank.
15. NO PLAN CREATED BY THIS AGREEMENT. Executive and the Bank expressly
declare and agree that this Agreement was negotiated among them and that no
provision or provisions of this Agreement are intended to, or shall be deemed
to, create any plan for purposes of the Executive Retirement Income Security Act
of 1974 ("ERISA") or any other law or regulation, and each party expressly
waives any right to assert the contrary. Any assertion in any judicial or
administrative filing, hearing, or process that an ERISA plan was created by
this Agreement shall be deemed a material breach of this Agreement by the party
making the assertion.
16. AMENDMENTS AND WAIVER. No amendments or additions to this Agreement
shall be binding unless made in writing and signed by all of the parties, except
as herein otherwise specifically provided. No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time. Further, the
Bank's waiver of its right to enforce similar conditions or provisions in
another employee's agreement (employment or other) shall not operate as a waiver
of its right to enforce any of the conditions or provisions in this Agreement.
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17. CHOICE OF LAW; ENFORCEABILITY; WAIVER OF JURY TRIAL
(a) THE LAW OF MASSACHUSETTS APPLIES TO THIS AGREEMENT. This Agreement and
all transactions contemplated by this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Massachusetts, without regard to principles of conflicts of law.
(b) ANY DISPUTE REGARDING THIS AGREEMENT WILL TAKE PLACE IN MASSACHUSETTS.
The Parties agree that this Agreement shall be enforced by the Business
Litigation Session of the Massachusetts Superior Court located in Suffolk
County, which retains exclusive jurisdiction and venue for any actions or
proceedings, demand, claim or counterclaim relating to, or arising under, the
terms and provisions of this Agreement, or to its breach. The Parties further
acknowledge that material witnesses and documents would be located in
Massachusetts.
18. SEVERABILITY. If a court of competent jurisdiction determines that any
portion of this Agreement is illegal, invalid or unenforceable, then that
portion shall be considered to be removed from the Agreement and it shall not
affect the legality, validity or enforceability of the remainder of the
Agreement and the remainder of the Agreement shall continue in full force and
effect. Similarly, if the scope of any restriction or covenant contained herein
should be or become too broad or extensive to permit enforcement thereof to its
full extent, then the court is specifically authorized by the parties to enforce
any such restriction or covenant to the maximum extent permitted by law, and
Executive hereby consents and agrees that the scope of any such restriction or
covenant may be modified accordingly in any judicial proceeding brought to
enforce such restriction or covenant.
19. HEADINGS. Headings contained in this Agreement are for convenience of
reference only.
20. ENTIRE AGREEMENT. This Agreement, together with any modifications
subsequently agreed to in writing by the parties, along with the plans and any
written agreements entered into by the parties pursuant to Sections 2(c) and
(d), shall constitute the entire agreement between the parties, and shall
supersede all prior agreements, understandings and arrangements, oral or
written, between the parties.
21. SOURCE OF PAYMENTS. All payments provided in this Agreement shall be
paid in from the general funds of the Bank. In the event, however, that the Bank
is unable to make such payments to the Executive, such amounts and benefits
shall be paid or provided by the Holding Company.
22. MISCELLANEOUS. Any payment made pursuant to this Agreement, or
otherwise, is subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden Parachute and
Indemnification Payments.
23. REPRESENTATIONS. Executive hereby represents and warrants to the Bank
that he understands this Agreement, that he enters into this Agreement
voluntarily and that his employment under this Agreement will not conflict with
any legal duty owed by him to any other party, or with any agreement to which
Executive is a party or by which he is bound,
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including, without limitation, any non-competition or non-solicitation provision
contained in any such agreement. Executive will indemnify and hold harmless the
Bank and its officers, directors, security holders, partners, members,
Executives, agents and representatives against loss, damage, liability or
expense arising from any claim based upon circumstances alleged to be
inconsistent with such representation and warranty.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
___________, 2006.
ATTEST: HAMPDEN BANK
By:
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Corporate Secretary For the Entire Board of Directors
ATTEST: HAMPDEN BANCORP, INC.
By:
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Corporate Secretary For the Entire Board of Directors
WITNESS: EXECUTIVE:
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Corporate Secretary Xxxxxx X. Xxxxxx
