Exhibit 10.16
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made effective as of the 10th day of November,
2000, by and between Xxxxxxx X. Xxxxxxxx (hereinafter "Starbuck")
currently residing in Ridgefield, Connecticut, and NewMil Bank
(hereinafter "NewMil" or "Bank"), a Connecticut banking corporation
with its headquarters and principal offices in New Milford, Connecticut
is intended to set forth and govern the terms of employment by the
Bank. This Agreement supersedes any prior agreements or understandings
written or oral between the parties and shall be the sole source of
either party's rights and obligations.
SUPERCEDING AGREEMENT. This Agreement takes place in the context
of an acquisition/merger by and among NewMil Bancorp, Inc., parent
company to the Bank ("Holding Company"), the Bank and Nutmeg Federal
Savings & Loan Association pursuant to which Nutmeg shall merge into the
Bank with the Bank as surviving entity. Starbuck has a Change of
Control Agreement with Nutmeg. This Agreement will supercede and
replace in its entirety the Nutmeg Change of Control Agreement, and
Starbuck shall not be entitled to any payment thereunder.
1. Position, Duties and Term.
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Beginning on the 10th day of November, 2000 Starbuck shall be
employed as a Senior Vice President of the Bank. He shall be
responsible for and carry out such duties as may be assigned to him
by the President, and he shall report to the President and/or his
designee (the current designee shall be Senior Vice President Xxxx X.
Xxxxx). He agrees to devote his full-time best efforts to the
performance of his duties. He shall not perform services for any other
business without the prior consent of the Bank, in its discretion. He
may also be elected or appointed to officer positions in the Holding
Company, and/or subsidiaries of the Bank or Holding Company, for which
he will not receive additional compensation.
The term of this Agreement shall be from November 10, 2000 until
December 1, 2002. This Agreement may be extended further only by a
written extension document executed by both parties. The Bank agrees to
review a possible extension of the Agreement no later than July 1, 2002.
2. Compensation.
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Starbuck shall be employed at a base annual salary of One Hundred
Twenty Thousand Dollars ($120,000.00) per year. Salary payments shall
be paid in accordance with the Bank's general payroll schedule.
Starbuck shall have his performance reviewed each year during the
month of December beginning in December 2001 (or such other month as
all senior officers are reviewed for the 2001 fiscal year end) by the
Board of Directors of the Bank. The Board may determine at that time,
in its discretion, and from time to time during the term of this
Agreement, to increase Starbuck=s base annual salary and/or to pay
Starbuck performance bonuses (collectively, "Total Annual Cash
Compensation").
Starbuck shall also receive a Bonus of $223,000.00, payable in two
parts: (a) $55,750.00 on January 5, 2001; and (b) $167,250.00 on
December 1, 2002. In the event of a change of control (as defined in
Paragraph 5 below) the Bonus shall vest and be deemed fully earned on
the day preceding the change of control.
3. Benefits.
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Starbuck shall receive all benefits as are generally made available
to other senior executives of the Bank, such as medical insurance,
dental insurance, life insurance, long-term disability insurance, and
such pension, profit sharing and/or 401(k) plans as may be available
from time to time. Booklets and summary plan descriptions describing
benefits as may from time to time exist shall be made available to
Starbuck. Starbuck shall be entitled to a paid vacation of four weeks
per calendar year (excluding the year 2000 for which no vacation will
be available) during the term of this Agreement. Unused vacation time
shall not accrue from year to year but shall be used, if at all, during
the calendar year in which it was first available, unless otherwise
agreed to by the President of the Bank. The Bank may also provide
Starbuck with other benefits typically provided to senior officers of
community banks in its discretion.
4. Stock Options.
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The Bank intends to cause the Company to grant stock options to
Starbuck similar to those granted to officers of similar status at the
Bank, subject to the terms of the Company's 1986 Stock Option Plan and
the availability of options thereunder. This determination, as with
stock options for all senior officers shall be made by the Board of
Directors of NewMil Bank in their discretion.
5. Termination.
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a. For Cause. Starbuck may be terminated at any time for cause. In
such event, the Bank shall have no further obligation to him under this
Agreement from the date of termination, other than payment of any
compensation due but not yet paid. Cause is defined for purposes of
this Agreement as:
(1) misconduct involving dishonesty, felonious conduct, breach
of trust, or moral turpitude; (2) insubordination or material willful
neglect in the performance of his duties; (3) material breach of the
provisions of this Agreement; (4) his violation of applicable banking
law having material, adverse consequences to the Bank or Company; or
(5) if the Bank's regulatory authorities obtain an order or assert
other regulatory enforcement powers effecting Starbuck's removal as
an officer of the Bank.
b. Disability. The Bank may also terminate Starbuck if he is unable
to substantially and effectively perform his duties for more than six
months because of physical or mental disability. The Board of Directors
is entitled to rely on such medical or other credible information as is
reasonably available to it at the time in making such determination.
Should Starbuck be terminated for reasons of such physical or mental
disability, he shall, subject to the limitations on unused vacation
time provided for in Paragraph 3 "Benefits" above, be entitled to
a lump sum payment for accrued but unused vacation time and any
compensation due but not yet paid, after payment of which the Bank
shall have no further obligation to him under this Agreement.
c. Without Cause. The Bank may terminate Starbuck's employment other
than for cause or disability as defined in either Paragraph (a) or (b)
above at any time. It shall give him 30 days prior written notice, but
shall not be obligated to state a reason therefor, whereupon Starbuck
shall receive, in full satisfaction of any and all claims he may have
against the Bank including, but not limited to claims under this
Agreement or under any Bank policy or program, federal or state
employment, discrimination or other statutes, the remainder of the
base salary which would be due to him for the balance of the employment
term (the "Deemed Term") and all other compensation due but not yet
paid, and his usual and customary medical (including vision) and dental
insurance benefits for a period of three months following notification
of termination; and, in addition, (but subject to the limitation on
unused vacation time provided for in Paragraph 3 "Benefits" above),
Starbuck shall be entitled to lump sum payment for any accrued but
unused vacation time. The remainder of the base salary shall be paid
to him over the Deemed Term consistent with the Bank's then regular
payroll practice. It is expressly understood that the parties have
discussed the payment of severance pay in the event of termination
without cause, but Starbuck has agreed that any and all payments to him
shall be limited as described herein.
d. Termination due to Change of Control. Should a Change of Control
occur during his term of employment, Starbuck will be entitled to an
immediate payment of any unpaid Bonus as described in Section 2 of
this Agreement. For the purposes of this Agreement, "Change of Control"
shall mean:
(1) a merger, acquisition, consolidation, sale of assets or other
reorganization to which the Bank or the Holding Company is a party, as
a consequence of which members of the Bank's or the Holding Company's
Board of Directors in office immediately prior to such transaction
constitute less than a majority of the Board of Directors of
the reorganized or successor institution immediately thereafter;
(2) a proxy contest to which the Holding Company is a party, as a
consequence of which members of the Holding Company=s Board of Directors
in office immediately prior to such event constitute less than a
majority of the Board of Directors thereafter;
(3) an event or events occurring after the date hereof as a result of
which any Person (as hereinafter defined) is or becomes the Beneficial
Owner (as hereinafter defined), directly or indirectly, of fifty percent
(50%) or more of the combined voting power of the Holding Company's
then outstanding securities without the prior approval of at least
two-thirds of the members of the Holding Company=s Board of Directors
in office immediately prior to such Person attaining such percentage
interest; or
(4) a merger, acquisition, consolidation, sale of assets or other
reorganization to which the Bank or the Holding Company is a party,
unless in any such case the shareholders of the Holding Company, in
their capacities as such and as a result of such transaction, shall
own at least fifty percent (50%) of the voting power of the outstanding
capital stock of the Holding Company or the survivor or successor
thereto.
A "Change of Control" shall be deemed not to have occurred if such
event is mandated or directed by a regulatory body having jurisdiction
over the Bank's or Holding Company's operations.
"Person" shall have the meaning of such term as used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Act").
"Beneficial Owner" shall have the definition of such term as defined in
Rule 13d-3 under the Act. The filing of a Form 13D or 13G by a Person
shall not in and of itself be deemed a Change of Control.
6. Noncompetition and Confidential Information.
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Starbuck agrees that during the term of employment, the Deemed
Term (if any), and, if later, for a period of six months following
termination of his employment with the Bank, he shall not either
directly or indirectly as agent, stockholder, employee, officer,
director, trustee, partner, proprietor or otherwise (except as a
passive investor holding not more than 1% equity in another
entity) engage in, render advice or assistance to or be employed on
a compensation basis by any person, firm or entity which is in
competition with the Bank. This paragraph shall apply only
where either: (1) the person, firm, or entity is headquartered in
New Milford or Danbury, Connecticut; or (2) the person, firm, or entity
is headquartered elsewhere but Starbuck maintains an office in New
Milford or Danbury, Connecticut. This paragraph shall not restrict
Starbuck from competing after termination of employment with the Bank
if there shall have been a Change of Control (as described in Paragraph
5(d) above) or if he is terminated by the Bank without cause. Starbuck
acknowledges that during the course of his employment, he will have
produced and had access to material, records, data, trade secrets and
information not generally available to the public ("confidential
information") regarding the Bank and its customers.
Starbuck agrees to hold in confidence and not directly or indirectly
disclose, use, copy or make lists of any such confidential information.
All records, files, documents, and other materials or copies thereof
relating to the Bank's business and the business of any subsidiary
thereof shall be and remain the sole property of the Bank, shall not
be removed from the Bank's premises except for bona fide business
purposes and shall be promptly returned to the Bank upon termination of
employment with the Bank.
7. Interpretation and Enforcement.
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a. This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of
Connecticut.
b. No waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provisions of this
Agreement shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same time or any prior or subsequent time.
c. This Agreement shall inure to the benefit of, and be binding upon,
the successors, personal representatives, heirs and assigns of Starbuck
and the Bank. Starbuck shall not be entitled to assign his duties under
this Agreement.
8. Arbitration.
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Except as hereinafter provided, any and all disputes involving the
interpretation or claimed breach of this Agreement shall be fully and
finally resolved in arbitration under the Commercial Arbitration Rules
of the American Arbitration Association. Any claim for arbitration
shall be filed with the American Arbitration Association in accordance
with its Rules but no later than 180 days following the alleged breach
or 180 days following knowledge of the alleged dispute. The arbitration
hearing shall be conducted as promptly as the arbitrator determines
reasonable in the State of Connecticut.
9. Injunctive Relief.
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Notwithstanding Paragraph 8 above, the Bank may seek immediately
injunctive relief in a court of competent jurisdiction should it believe
that Starbuck is violating Paragraph 6 above regarding noncompetition or
confidential information. Arbitration shall be inapplicable to any
such claim.
10. Regulatory Restrictions.
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Notwithstanding any provision to the contrary in this Agreement,
the Bank shall not be required under this Agreement to continue Starbuck
in his position(s) at the Bank, or to make any payments to Starbuck, if
the regulatory authorities having jurisdiction over the Bank order
Starbuck=s removal from the Bank, or if the Bank determines that any
payment would constitute an illegal "excess parachute" payment under 12
U.S.C. Section 1828(k), or an "unsafe or unsound banking practice"
pursuant to 12 U.S.C. Section 1818(b).
NEWMIL BANK
Date:___________________ By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Chairman,
President and CEO
Date:___________________ /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
