Exhibit 10.18
FIRST AMENDMENT TO
TWO YEAR CHANGE IN CONTROL AGREEMENT
First Amendment, dated as of December 22, 2008 (the "Amendment"), to the
Two Year Change in Control Agreement, dated as of November 21, 2006 (as amended,
the "Agreement"), by and among Valley Bank (the "Bank") and Xxxxxxx X. Xxxxxxxx
(the "Executive"). Capitalized terms which are not defined herein shall have the
same meaning as set forth in the Agreement.
W I T N E S S E T H:
WHEREAS, the parties desires to amend the Agreement to comply with the
final regulations issued in April 2007 by the Internal Revenue Service under
Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, pursuant to Section 8(a) of the Agreement, the parties to the
Agreement desire to amend the Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein set forth and such other consideration the sufficiency of which is hereby
acknowledged, the Bank and the Executive hereby amends the Agreement as follows:
Section 1. References to Valley Bank. All references to Valley Bank in the
Agreement shall include any successor to the Bank.
Section 2. Amendment to Section 2(a) of the Agreement. Section 2(a) of the
Agreement is hereby amended to add the following immediately after Section
2(a)(v):
"provided, however, that prior to any termination of employment for
Good Reason, the Executive must first provide written notice to the
Bank (or its successor in interest) within ninety (90) days
following the initial existence of the condition, describing the
existence of such condition, and the Bank shall thereafter have the
right to remedy the condition within thirty (30) days of the date
the Bank received the written notice from the Executive. If the Bank
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 Bank 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."
Section 3. New Section 2(d) of the Agreement. Section 2 of the Agreement
is hereby amended to add a new Section 2(d) to read in its entirety as follows:
"(d) For purposes of this Agreement, any termination of Executive's
employment shall be construed to require a "Separation from Service"
in accordance with Code Section 409A and the regulations promulgated
thereunder, such that the Bank and Executive reasonably anticipate
that the level of bona fide services Executive
would perform after termination of employment 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 thirty-six
(36)-month period."
Section 4. Amendment to Section 3(a)(ii) of the Agreement. Section
3(a)(ii) of the Agreement is hereby amended and a new Section 3(a)(iii) is added
to read in its entirety as follows:
"(ii) Continued life insurance and non-taxable health and dental
insurance coverage which Executive participated in as of the
date of the Change in Control (collectively, the "Employee
Benefit Plans") for a period ending upon the earlier of (A)
one year after the date of termination of Executive's
employment, or (B) the date the Executive receives full time
employment by another employer (provided that the Executive is
entitled under the terms of such employment to benefits
substantially similar to those Executive received prior to his
termination of employment in connection with the Change in
Control and at a cost no greater than it would have been had
Executive continued as an employee of the Bank). Said coverage
shall be provided under the same terms and conditions in
effect on the date of Executive's termination of employment.
To the extent that benefits required under this Section
3(a)(ii) cannot be provided under the terms of any Bank health
and welfare plans, the Bank shall pay the Executive the value
of such benefits in a single cash lump distribution within
five (5) calendar days following the Executive's termination
of employment; and
(iii) Notwithstanding the foregoing, in the event the Executive is a
Specified Employee (as defined herein), then, solely to the
extent required to avoid penalties under Code Section 409A,
the Executive's payments shall be delayed until the first day
of the seventh month following the Executive's Separation from
Service. A "Specified Employee" shall be interpreted to comply
with Code Section 409A and shall mean a key employee within
the meaning of Code Section 416(i) (without regard to
paragraph 5 thereof)."
Section 5. Amendment to Section 3(b) of the Agreement. Section 3(b) of the
Agreement is hereby amended to amend and restate the last sentence of Section
3(b) to read in its entirety as follows:
"The allocation of the reduction required hereby among the
Termination Benefits provided by this Section 3 shall be determined
by the Executive, provided however that if it is determined that
such election by the Executive shall be in violation of Code Section
409A, the cash severance payable pursuant to Section 3 hereof shall
be reduced by the minimum amount necessary to result in no portion
of payments and benefits payable to the Bank under Section 3 being
non-deductible to the Bank pursuant to Section 280G of the Code and
subject to excise tax imposed under Section 4999 of the Code."
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Section 6. Amendment to Section 13 of the Agreement. Section 13 of the
Agreement is hereby amended to add the following
sentence immediately at the end thereof:
"Such payment or reimbursement shall be made to Executive as soon as
practicable but not later than March 15 of the calendar year immediately
following the year in which such expenses were incurred by Executive."
Section 7. Effectiveness. This Amendment shall be deemed effective as of
the date first above written, as if executed on such date. Except as expressly
set forth herein, this Amendment shall not by implication or otherwise alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Agreement, all of which are ratified
and affirmed in all respects and shall continue in full force and effect and
shall be otherwise unaffected.
Section 8. Governing Law. This Amendment and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of the
State of Connecticut, except to the extent preempted by the laws of the United
States of America.
Section 9. Compliance with Section 409A. This Agreement shall be
interpreted and administered consistent with Section 409A of the Code.
IN WITNESS WHEREOF, the Bank has duly executed this Amendment as of the
day and year first written above.
VALLEY BANK
By: /s/ Xxxxx X. X'Xxxxxx
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Name: Xxxxx X. X'Xxxxxx
Title: Director
EXECUTIVE
/s/ Xxxxxxx X. Mattiolli
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Xxxxxxx X. Xxxxxxxx
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