SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AND
AGREEMENT
THIS AGREEMENT, made this 16th day of December, 1996, by and between
Tolland Bank, a state-chartered savings bank ("Bank"), and Xxxxxx X. Xxxxx, an
individual ("Employee").
In consideration of the mutual agreements herein contained, the parties
hereto, intending to be legally bound, agree as follows:
1. Need for Agreement
(a) Because of the prospects of sweeping changes in the industry
(e.g., interstate banking, mergers, the continuing transition
from traditional savings bank powers to full commercial bank
powers, etc.), and
(b) because of the need for the Employee to perform his job
without undue fear of the loss of pension benefits this
Agreement sets forth the following:
2. Term of Agreement
(a) This Agreement shall commence on October 1, 1996, and shall
continue in effect until the time Employee is fully vested in
the Bank's Defined Benefit Plan and 401k Savings Plan.
3. Qualifying Termination of Employment
Benefits shall be payable under this Agreement only if the Employee's
employment is terminated prior to the expiration of this Agreement
under one of the following circumstances:
(a) Employee shall have been involuntarily terminated from
employment without cause.
(i) Cause shall include personal dishonesty; willful
misconduct; breach of fiduciary duty involving personal
profit; intentional failure to perform stated duties
(other than such failure resulting from the Employee's
incapacity due to physical or mental illness or any such
actual or anticipated failure resulting from the
Employee's termination for "Good Reason" as defined in
Subsection (b) of this Section below); willful
violation of any law, rule, regulation (other than traffic
violations or similar offenses), or final cease and desist
order of the Federal Deposit Insurance Corporation.
(ii) For purposes of this Subsection, no act, or failure to
act, on the Employee's part shall be considered "willful"
unless done, or omitted to be done, by the Employee not in
good faith and without reasonable belief that the
Employee's action or omission was in the best interest of
the Bank.
(iii) Notwithstanding the foregoing, the Employee shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to the Employee a copy of
a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for that
purpose (after reasonable notice to the Employee and an
opportunity for the Employee, to be heard before the
Board), finding that in the good faith opinion of the
Board the Employee was guilty of conduct set forth above
and specifying the particulars thereof in detail.
(b) Employee terminates his employment with Good Reason.
(i) The Employee shall be entitled to terminate his employment
for Good Reason. "Good Reason" shall mean:
(1) the assignment to the Employee of any duties
inconsistent with the Employee's status as a senior
executive officer of the Bank or any significant
change in the Employee's responsibilities or duties
that negatively alters the nature and status of his
position.
(2) a reduction by the Bank in the Employee's annual
salary as in effect on the date hereof or as the
same may be increased from time to time; or a
reduction in fringe benefits, unless such reduction
is made equitably or is applicable to other Bank
employees on a non-discriminatory basis; or
(3) unless otherwise mutually agreed upon, the
relocation of the Bank's principal executive
offices to a location outside the greater Hartford
area or the Bank's requiring the Employee to be
based anywhere other than the Bank's principal
executive offices.
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(ii) The Employee's right to terminate his employment pursuant
to this Subsection shall not be affected by his incapacity
due to physical or mental illness.
(c) If the Employee becomes, in the business judgment of the Board
of Directors, physically, mentally, or otherwise disabled such
that he is unable to perform his duties for such a period of
time that his employment is terminated or he is replaced
without right of returning to his former position upon
becoming able to perform such duties.
(i) Such determination by the Board of Directors shall be
based on the unanimous opinion of two physicians, one
selected by the Employee and one by the Bank.
(ii) If such physicians are not in agreement, the Employee
and the Bank shall select a third physician whose
decision shall be used by the Board of Directors for
their determination.
4. Benefits Payable Following Qualifying Termination of Employment
In the event that the Employee's employment is terminated under one of
the circumstances described in this paragraph 3 above, the Bank shall
pay the Employee the amount described in paragraph 4 reduced by
applicable withholding taxes:
(a) In the event that the employee is not 100% vested in his
accrued benefits under the Defined Benefit Plan at the time of
termination, the Bank shall pay him a lump sum amount equal to
the excess, if any, of:
(i) the lump sum value of his vested and unvested accrued
benefit under the pension plan at the time of his
termination reduced by;
(ii) the lump sum value of his vested accrued benefit under the
Plan.
For purposes of this Agreement, the amount to be determined under this
Clause (a) will be calculated by applying the provisions of the pension
plan then in effect.
(b) In the event that the Employee is not 100% vested in his
account benefit under the 401k Savings Plan at the time of his
termination, the Bank shall make the lump sum payment to him
in an amount equal to the excess, if any, of:
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(i) the vested and unvested account balance determined as of
the most recent valuation date immediately preceding the
date of his termination of employment reduced by;
(ii) his vested account balance under the plan as of the most
recent valuation date immediately preceding the date of
his termination of employment.
(c) A lump sum in the amount of 18% of the sum of (a) and
(b) above.
5. Notice of Termination
(a) Any purported termination by the Bank or by the Employee
communicated by written Notice of Termination to the other
party hereto in accordance with Subsection (b) of this Section
6 shall mean a 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 the Employee's
employment under the provision so indicated.
(b) A notice, request, demand or other communication required or
permitted to be given under this Agreement shall be sufficient
if in writing and if delivered personally, or sent by
certified or registered mail to the address below or to other
such addressee or address as shall be set forth in a notice
given in the same manner:
If to the Employee: Xxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
If to the Bank (mail): Tolland Bank
Olde Tolland Common
P. O. Xxx 000
Xxxxxxx, XX 00000
If to the Bank (deliver): Tolland Bank
000 Xxxxxxxx Xxxx.
Xxxxxx, XX 00000
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6. Successors; Binding Agreement
(a) The Bank will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Bank to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Bank would
be required to perform it if no such succession had taken
place. Failure of the Bank to obtain such assumption and
agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the
Employee to terms as the Employee would be entitled under this
Agreement if the Employee terminated his employment for Good
Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in
this Agreement, "Bank" shall mean the Bank as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should
die while any amount would still be payable to the Employee
under this Agreement if the Employee had continued to live,
all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this agreement to the
Employee's devisee, legatee or other designee or if there is
no designee, to the Employee's estate.
7. Validity
If for any reason any provision hereof shall be determined to be
invalid or unenforceable, the validity and effect to the other
provisions hereof shall not be affected thereby.
8. Waiver of Breach
The waiver by the Bank or by the Employee of a breach of any provision
of the Agreement by the other party shall not operate, or be construed,
as a waiver of any other breach of such other party.
9. Modification of Agreement
This Agreement shall not be modified or amended except by written
agreement of the parties hereto.
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10. Arbitration and Attorney Fees
Claims, disputes or other matters in question between the parties to
this Agreement arising out of or relating to this Agreement or breach
thereof, shall be subject to and decided by arbitration in accordance
with the appropriate rules of the American Arbitration Association
currently in effect, unless the parties mutually agree otherwise.
The Employee seeking to enforce the terms of this Agreement who
prevails is entitled to reasonable attorney fees.
11. Applicable Law
The parties hereto agree that this Agreement shall be construed and
enforced pursuant to the laws of the State of Connecticut except to the
extent that such law may be preempted by applicable Federal Law,
including regulation, or orders duly issued by the FDIC ("Federal
Law"), in which event this Agreement shall be governed and be
interpreted by Federal Law.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
day and year first above written.
EMPLOYEE: FOR THE BANK:
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxx, Xx.
Xxxxxx Xxxxx Xxxxxxx Xxxxx, Xx.
President & CEO Chairman of Personnel Committee,
Board of Directors
/s/ Xxxxxxx X. Xxxxxxxxx
Witness
/s/ Xxxxxxx X. Xxxxxx CORPORATE SEAL:
Witness
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