Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of April, 2001, by
and between Cape Cod Bank and Trust Company, N.A., a national banking
association (the "Bank"), CCBT Financial Companies, Inc., a Massachusetts
corporation (the "Company") (the Bank and the Company, collectively, the
"Employers") and Xxxxxx X. Xxxx, a resident of Sandwich, Massachusetts
("Employee").
WITNESSETH, the Company is the holding company for the Bank;
WHEREAS the Employers have determined that it is in the best interests
of the Employers to allow the Employee to consider the prospect of a Change in
Control (as herein defined) in an objective manner and in consideration of the
services to be rendered by the Employee to the Employers and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Employers, the Employers are willing to provide, subject to
the terms of this Agreement, certain benefits upon the occurrence of a
Terminating Event (as herein defined) subsequent to a Change in Control.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Employers and the Employee hereby agree as follows:
1. Definitions.
1.1 "Affiliate" means:
1.1.1 A member of a controlled group of corporations of which
either of the Employers is a member; or
1.1.2 An unincorporated trade or business which is under common
control with either of the Employers as determined in
accordance with Section 414(c) of the Internal Revenue Code
of 1986, as amended (henceforth the "Code") and regulations
issued thereunder.
For purposes hereof, a "controlled group of corporations"
shall mean a controlled group of corporations as defined in
Section 1563(a) of the Code determined without regard to
Section 1563(a)(4) and (e)(3)(C) of the Code.
1.2 "Base Annual Salary" means the annualized value of the Employee's
salary, based on the most recent pay period, prior to a Change of
Control.
1.3 "Change in Duties" means:
1.3.1 A significant reduction in the nature or scope of the
Employee's authority or duties from those immediately prior
to the date on which a Change of Control occurs;
1.3.2 A reduction in the Employee's Base Annual Salary;
1.3.3 Exclusion from any incentive program from which the Employee
was previously eligible, or which other executives with
comparable duties participate in;
1.3.4 A change in location of the Employee's principal place of
employment by more than fifty (50) miles;
1.4 "Change in Control" shall be deemed to have occurred in any one of
the following events:
1.4.1 if there has occurred a change in control of either the
Company or the Bank which the Company or the Bank would be
required to report in response to Item 1 of Form 8-K
promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or, if such form and the
related regulations are no longer in effect, any forms or
regulations promulgated by the Securities and Exchange
Commission, pursuant to the Exchange Act, which are intended
to serve similar purposes; or
1.4.2 A Change in Control of the Company or the Bank has occurred
within the meaning of the Change in Bank Control Act, as
amended and the rules and regulations promulgated
thereunder; or
1.4.3 Without limitation such a Change in Control shall be deemed
to have occurred at such time as:
1.4.3.1. Any "person" (as the term is used in Section 13(d)
and 14(d) of the Exchange Act), or group of
persons acting in concert, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) directly or indirectly, of any
class of equity securities of the Bank
representing 50% or more of a class of equity
securities except for any securities purchased by
the Bank's employee stock ownership plan and
trust; or
1.4.3.2. Individuals who constitute the Board of the
Company on the date hereof (the "Incumbent Board")
cease for any reason to constitute at least a
majority thereof, provided that any person
becoming a director subsequent to the date hereof
whose election was approved by a vote of at lease
three-quarters of the directors comprising the
Incumbent Board, or whose nomination for election
by the Company's shareholders was approved by the
same Committee serving under an Incumbent Board,
shall be, for purposes of this clause (b)
considered as though he were a member of the
Incumbent Board; or
1.4.3.3. A plan of reorganization, merger, consolidation,
sale of all or substantially all the assets of the
Company or similar transaction occurs in which the
Company is not the resulting entity; or
1.4.3.4. A proxy statement shall be distributed soliciting
proxies from stockholders of the Company, by
someone other than the current management of the
Company, seeking stockholder approval of a plan or
similar transaction with one or more corporations
as a result of which the outstanding shares of the
class of securities then subject to such plan or
transaction are exchanged for or converted into
cash or property or securities not issued by the
Company.
1.4.4 Notwithstanding the foregoing, no Change in Control shall be
deemed to occur by virtue of the Bank becoming a subsidiary
of the Company.
1.5 "Code" means the Internal Revenue Code of 1986, as from time to time
amended.
1.6 "Constructive Termination" means the voluntary termination of
employment by the Employee following a Change in Duties following a
Change of Control.
1.7 "Employment Compensation" means any salary, bonus or commissions
paid to the Employee as an employee (as defined in the Code) by any
entity other than the Employers or their successors. If the Employee
is a partner in a partnership, this definition shall include the
Employee's share of partnership income.
1.8 "Exchange Act" means the Securities Exchange Act of 1934, as from
time to time amended.
1.9 "Termination for Cause" means the termination of the Employee's
employment with the Bank or the Company, as applicable, as a result
of:
1.9.1 The Employee's failure or refusal to perform the Employee's
duties occasioned by reason other than sickness or other
disability of the Employee, which is not cured within ten
(10) business days after written notice from the Bank or the
Company, as applicable, specifying such failure or refusal
has been delivered;
1.9.2 Commission by the Employee of any materially fraudulent,
dishonest or other act of misconduct in the performance of
the Employee's duties hereunder, other than at the specific
direction of the Board of the Bank or the Company, as
applicable; or
1.9.3 Conviction for any felony or crime involving moral
turpitude.
1.10 "Voting Securities" means any securities which ordinarily possess
the power to vote in the election of directors without the happening
of any precondition or contingency.
2. Term. Subject to the provisions for earlier termination hereinafter set
forth in Section 4 of this Agreement, the term of this Agreement shall
commence on the date hereof and end on the day preceding the second
anniversary hereof.
3. Automatic Extension. Unless the Employee receives written notification from
either of the Employers of their intention not to renew this Agreement at
least twelve (12) months prior to the expiration date, plus any extensions,
the term of this Agreement shall automatically be extended by twelve (12)
months.
4. Termination of Employment.
4.1 Termination Prior to a Change in Control:
4.1.1 Prior to a Change in Control, the Employers may terminate
the Employee's employment under this Section of the
Agreement for any reason.
4.1.2 If the Employee's employment is terminated pursuant to this
Section 4.1, any severance policies maintained by the Bank
or the Company, as applicable, shall apply and no amounts
shall be payable pursuant to this Agreement.
4.2 Termination following a Change in Control:
4.2.1 If, during a period of two years following a Change in
Control, the employment of the Employee is terminated by the
Bank or the Company, as applicable, for any reason, other
than Cause, or if the Employee is subject to Constructive
Termination, benefits shall be payable under Section 5.
4.2.2 If the Employee voluntarily terminates his or her employment
following a Change in Control for any reason other than
Constructive Termination, no amount shall be paid pursuant
to this agreement.
5. Benefit following a Change in Control. If a benefit is payable, pursuant to
Section 4.2.1, the Employee shall receive, in monthly installments, payable
on the first of each month, an amount equal to:
5.1 One-twelfth (1/12th) of the Employee's Base Annual Salary, less any
withholding required pursuant to the Code; reduced by
5.2 Any Employment Compensation payable to the Employee for that month,
whether received currently or deferred.
5.3 This benefit shall be payable for 24 months following the
termination of the Employee's employment with the Bank or the
Company, as applicable.
5.4 No other amounts shall be payable under this Agreement in lieu of
bonuses, perquisites or other benefits maintained by the Employers,
nor shall the Employee be considered to continue in the employ of
the Bank or the Company, as applicable, while payments are being
made pursuant to this Section 5.
5.5 Limitation on Benefits.
5.5.1 It is the intention of the Employee and of the Employers
that no payments by the Employers to or for the benefit of
the Employee under this Agreement or any other agreement or
plan pursuant to which he is entitled to receive payments or
benefits shall be non-deductible to the Employers by reason
of the operation of Section 280G of the Code relating to
parachute payments. Accordingly, and notwithstanding any
other provision of this Agreement or any such agreement or
plan, if by reason of the operation of said Section 280G,
any such payments exceed the amount which can be deducted by
the Employers, such payments shall be reduced to the maximum
amount which can be deducted by the Employers. To the extent
that payments exceeding such maximum deductible amount have
been made to or for the benefit of the Employee, such excess
payments shall be refunded to the Employers with interest
thereon at the applicable Federal Rate determined under
Section 1274(d) of the Code, compounded annually, or at such
other rate as may be required in order than no such payments
shall be non-deductible to the Employers by reason of the
operation of said Section 280G. To the extent that there is
more than one method of reducing the payments to bring them
within the limitations of said Section 280G, the Employee
shall determine which method shall be followed, provided
that if the Employee fails to make such determination within
forty-five days after the Employers have sent him written
notice of the need for such reduction, the Employers may
determine the method of such reduction in their sole
discretion.
5.5.2 If any dispute between the Employers and the Employee as to
any of the amounts to be determined under this Section
5.5.2, or the method of calculating such amounts, cannot be
resolved by the Employers and the Employee, either the
Employers or the Employee after giving three days' written
notice to the other, may refer the dispute to a partner in
the Boston office of a firm of independent certified public
accountants selected jointly by the Employers and the
Employee. The determination of such partner as to the amount
to be determined under Section 5(a) and the method of
calculating such amounts shall be final and binding on both
the Employers and the Employee. The Employers shall bear the
costs of any such determination.
6. Miscellaneous.
6.1 Agreement Supersedes. This Agreement supersedes all prior agreements
and understandings by and between the Employee and the Employers and
of any Affiliates of their respective directors, officers,
shareholders, employees, attorneys, agents, or representatives,
including any Severance Agreement, Employment Letter, Employment
Terms, Non-Disclosure Agreement and /or Employment Agreement, and
constitutes the entire agreement between the parties, respecting the
subject matter hereof; there are no representations, warranties or
other commitments other than those expressed herein.
6.2 Noncontravention. The Employee represents and warrants to the
Employers that the Employee is not a party to or bound by, and the
employment of the Employee by the Employers or the Employee's
disclosure of any information to the Employers or their use of such
information will not violate or breach any employment, retainer,
consulting, license, non-competition, non-disclosure, trade secrets
or other agreement between the Employee and any other person,
partnership, corporation, joint venture, association or other
entity.
6.3 Modification; Waiver. No modification or amendment of, or waiver
under, this Agreement shall be valid unless signed in writing and
signed by the Employee and the Chairman of the Board of Directors of
the Bank and the Company, pursuant to expressed authority of the
Board of each entity.
6.4 Indemnification. The Employee and the Employers and their Affiliates
each agree to indemnify and hold the other harmless from, any and
all claims, lawsuits, losses, damages, expenses, costs and
liabilities, including, without limitation, court costs and
attorney's fees which a party to this Agreement may sustain as a
result of, or in connection with, either directly or indirectly, a
breach or violation of any of the provisions of this Agreement by
the other party.
6.5 Remedies. The Employee hereby agrees that if the Employee violates
any provision of this Agreement, the Employers shall be entitled, if
they, or either of them, so elect, to institute and prosecute
proceedings at law or in equity to obtain damages with respect to
such violation or to enforce the specific performance of this
Agreement by the Employee or to enjoin the Employee from engaging in
any activity in violation hereof.
6.6 Waiver. The waiver by either party to this Agreement of a breach of
any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach.
6.7 Notices. Any communication which may be required under this
Agreement shall be in writing and shall be deemed to have been
properly given when delivered personally at the address set forth
below for the intended party during normal business hours, or when
sent by U.S. registered or certified mail, return receipt requested,
postage prepaid as follows:
If to the Bank or Cape Cod Bank and Trust Company
the Company: 000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
If to the Employee: Xx. Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Notices shall be given to such other addressee or address, or both,
as a particular party may from time to time request by written
notice to the other party to the Agreement. Each notice, request,
demand, approval or other communication which is sent in accordance
with this Section shall be deemed to be delivered, given and
received for all purposes of this Agreement as of two business days
after the date of deposit thereof for mailing in a duly constituted
U.S. post office or branch thereof, one business day after deposit
with a recognized overnight courier service or upon written
confirmation of receipt of any facsimile transmission. Notice given
to a party hereto by any other method shall only be deemed to be
delivered, given and received when actually received in writing by
such party.
6.8 Binding Nature; Employment Status. This Agreement shall inure to the
benefit of and be binding upon the Employers, jointly and severally,
and the Employee. This is not an agreement for the employment of the
Employee and shall confer no rights on the Employee except as herein
expressly provided.
6.9 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts.
6.10 Allocation of Obligations. The Bank and the Company shall allocate
among themselves which party shall be responsible for paying the
severance payments and other benefits directed by this Agreement.
The payment by either party of such severance payments and other
benefits shall satisfy the obligations of the non-paying party under
this Agreement. Both the Bank and the Company shall be jointly
liable in the event of a failure by both parties to pay such
severance payments and other benefits.
6.11 Assignment; Prior Agreements. Neither the Employers nor the Employee
may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of
the other party, and without such consent any attempted transfer
shall be null and void and of no effect. This Agreement shall inure
to the benefit of and be binding upon the Employers and the
Employee, their respective successors, executors, administrators,
heirs and permitted assigns. In the event of the Employee's death
prior to the completion by the Employers of all payments due him
under this Agreement, the Employers shall continue such payments to
the Employee's beneficiary designated in writing to the Employers
prior to his death (or to his estate, if he fails to make such
designation). This Agreement supersedes any prior agreement covering
the subject matter hereof.
6.12 Enforceability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
6.13 Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any
party to require the performance of any term or obligation of this
Agreement, or the waiver by any party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as a sealed instrument as of the day and year first above written.
CAPE COD BANK AND TRUST EMPLOYEE
COMPANY, N.A.
A national banking association
By: /s/ Xxxx Xxxx Xxxx /s/ Xxxxxx X. Xxxx
------------------ ------------------
Name: Xxxx Xxxx Xxxx Name: Xxxxxx X. Xxxx
Title: Chairman of the
Board of Directors
CCBT FINANCIAL COMPANIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
