AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of October,
1996, by and between The People's Savings Bank of New Britain, a Connecticut
savings bank with its principal office and place of business in New Britain,
Connecticut ("Employer") and Xxxxxxx X. Xxxxxxxxx, a resident of Wolcott,
Connecticut ("Employee").
W I T N E S S E T H
WHEREAS, Employee and Employer are parties to an Employment Agreement
dated as of August 1, 1986 (the "Prior Agreement") which, among other things,
provides certain benefits to Employee upon a change in control of Employer;
and
WHEREAS, Employee and Employer have entered into a Change in Control
Agreement dated as of the date hereof (the "Change in Control Agreement"),
the provisions of which are intended to supersede the change in control
provisions in the Prior Agreement; and
WHEREAS, Employee and Employer desire to amend and restate the Prior
Agreement, upon the terms and conditions set forth herein, to delete from the
Prior Agreement such change in control provisions and to make clear the terms
under which Employee desires to remain in the employ of Employer, and under
which the Employer desires to continue to employ Employee.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the parties hereto, intending to be legally bound, do
hereby mutually covenant and agree as follows:
1. Employment.
Employer hereby agrees to employ Employee as President and Chief
Executive Officer of Employer for the Term of Employment, as defined in
Section 2.1, and Employee accepts said employment and agrees to serve in such
capacity upon the terms and conditions hereinafter set forth.
2. Definitions.
2.1 "Term of Employment" shall mean the period commencing with the date
hereof and ending on December 31, 1999. The Term of Employment shall
automatically be extended on each January 1 hereafter by adding an additional
year to the then remaining period of employment without further notice or
action of the parties; provided that either party may serve written notice to
the other at least three (3) months prior to any such January 1 of its desire
that the period of employment not be further automatically extended as
provided herein, in which event there shall thereafter be no such further
automatic extensions of the Term of Employment.
Notwithstanding the foregoing, the Term of Employment shall end one (1)
day after the occurrence of any of the following events:
(a) Employee's termination for "Cause" (as defined in Section
2.3);
(b) unilateral termination of Employee's employment by Employee
other than as permitted under Section 5.2;
(c) unilateral termination of Employee's employment by Employer
prior to a Change of Control as defined in a Change in Control
Agreement;
(d) the death of Employee; or
(e) the "permanent disability" of Employee (as defined in Section
2.2);
(f) Payment in full to Employee of the "Severance Amount" as
provided for in the Change in Control Agreement.
2.2 Employee's "permanent disability," as this phrase is used
throughout this Agreement, shall mean Employee's disability as defined under
the long-term disability insurance policy of Employer as in effect from time
to time.
2.3 "Cause," as this term is used throughout this Agreement, shall
mean:
(a) Employee's failure to be available to work on a full-time
basis in the position set forth in Section 1 hereof other than
as a result of a permanent disability, if such failure shall
not have been cured by Employee within thirty (30) days after
receipt from Employer of written notice of a claimed breach by
Employee; or
(b) willful material misconduct by Employee, including, but not
limited to, the commission by Employee of a felony or the
perpetration by Employee of a common law fraud upon Employer,
in the case of (a) or (b) above, as determined in good faith by a vote of at
least 75% of the members of Employer's Board of Directors.
2.4 A "Person" shall include natural person, corporation, or other
entity. When two (2) or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring, holding,
or disposing of Employer common stock, such partnership, syndicate, or group
shall be considered a Person. Beneficial ownership shall be determined under
the then current provisions of Securities Exchange Act of 1934 Rule 13d-3, 17
C.F.R. Section 240.13d-3.
3. Duties of Employment.
Employee agrees that, so long as he shall be employed by Employer,
Employee shall perform all duties assigned or delegated to him under the By-
Laws of Employer or from time to time by the Board of Directors of Employer
consistent with his position as a senior executive officer of Employer, and
shall perform all acts and services customarily associated with such
position, devoting his full time, best efforts and attention to the
advancement of the interests and business of Employer. Employee shall not be
engaged in or concerned with any other duties or pursuits which are
competitive or inconsistent with the interests and business of Employer. It
is understood that Employee may have directorships which may, from time to
time, require minor portions of his time, but which shall not interfere or be
inconsistent with his duties hereunder.
4. Compensation.
During the Term of Employment, Employer shall pay to Employee as
compensation for the services to be rendered by him hereunder the following:
(a) Employer shall pay to Employee a base salary at the rate of
$171,252.00 per year, or such larger sum as the Board of Directors of
Employer may from time to time determine (the "Base Rate"). Such
compensation shall be payable in accordance with normal payroll practices of
Employer.
(b) In addition, Employee shall receive an annual increase in the
Base Rate at each normal pay adjustment date during such Term of Employment,
but no later than one (1) year from the date of Employee's last increase and
annually thereafter during such Term of Employment, of not less than the
percentage increase in the cost-of-living since Employee's last pay
adjustment, as measured by the Consumer Price Index-All Urban Consumers of
the U.S. Bureau of Labor Statistics, except that no such increase shall be
made at any time during which a salary freeze applicable to all executive
employees of Employer generally may be in effect.
(c) Employer shall provide life insurance on the life of Employee
in an amount equal to twice the Base Rate, payable to a beneficiary selected
by Employee, and shall provide comprehensive health insurance and Major
Medical coverage for Employee comparable to such coverage provided for
officers of Employer generally. Employer shall also provide Employee with
long-term disability insurance coverage. Employee shall be eligible to
participate in the pension plan of Employer in accordance with the terms
thereof.
(d) Except as otherwise set forth herein, if Employee should be
prevented from performing his duties by reason of illness or incapacity or
for any other cause for an aggregate of six months in any one year, then
Employer shall not be obligated to pay Employee any salary or bonus for any
period of absence (except for absence during paid vacation as provided
herein) in excess of the aggregate of six months in any such year.
5. Termination of Employment.
5.1 If Employee's employment is unilaterally terminated by Employer
during the Term of Employment, for any reason other than the reasons provided
in Section 2.3 hereof, Employee shall be entitled to receive, and Employer
shall be obligated to pay to Employee, the following amounts:
(a) severance pay in an amount equal to the salary compensation of
Employee defined in Sections 4(a) and 4(b) hereof for an additional twelve
(12) months at the then current rate, from which shall be subtracted only the
amount, if any, payable to Employee under any then effective severance pay
plan of Employer (which, for purposes hereof, shall not include any amount
payable to Employee pursuant to the Change in Control Agreement), the
foregoing net amount to be paid in cash in the month next following
Employee's termination of employment.
(b) an amount equal to the aggregate amounts that Employer would
have contributed on behalf of Employee under Employer's Deferred Profit
Sharing Plan, if any such plan shall be in effect, for an additional twelve
(12) months had Employee continued in the employ of Employer for such
additional twelve (12) months and made contributions under said plan at a
rate, as a percentage of salary, equal to the average rate at which Employee
had made contributions to said plan in the period, not exceeding three (3)
fiscal years of Employer, preceding Employee's termination;
(c) supplemental pension benefits equal to the difference between
(i) the annual pension benefit that would have been payable to Employee under
the Retirement Plan of Employer (the "Plan") if Employee had been continued
in the employ of Employer for an additional twelve (12) months and had
received compensation at least equal to that specified in Section 4 of this
Agreement until such time and (ii) the annual pension benefit actually
payable to Employee under the Plan, such supplemental pension benefits to be
payable at the same time and in the same manner as benefits under the Plan;
(d) to the extent that any form of compensation previously granted
to Employee, such as, by way of example only, restricted stock or performance
share awards, shall not be fully vested or shall require additional service
as an employee at the time of the termination of Employee's employment,
Employee shall be credited with additional service for an additional twelve
(12) months;
(e) for an additional twelve (12) months, Employee shall also
continue to participate in all life, health, disability and similar insurance
plans and programs of Employer to the extent that such continued
participation is possible under the general terms and provisions of such
plans and programs, with Employer and Employee paying the same portion of the
cost of each such plan or program as existed at the time of Employee's
termination. In the event that Employee's continued participation in any
group plans and programs is not permitted, then in lieu thereof, Employer
shall acquire, with the same cost sharing, individual insurance policies
providing comparable coverage for Employee; provided that Employer shall not
be obligated to pay for any such individual coverage more than three (3)
times Employer's cost of such group coverage; and provided further, if any
such individual coverage is unavailable, then Employer shall pay to Employee
for such additional twelve (12) month period an amount equal to the sum of
the average annual contributions, payments, credits, or allocations made by
Employer for such insurance on Employee's behalf over the three (3) fiscal
years of Employer preceding the termination of his employment; and
(f) Employee shall continue to receive for an additional twelve
(12) months such perquisites as he was receiving at the time of the
termination of his employment.
5.2 Employee shall have the right during the Term of Employment, at his
sole option, by thirty (30) days' advance written notice to the Board of
Directors of Employer, to terminate his services hereunder upon the
occurrence of any action by Employer which (i) significantly reduces
Employee's job responsibilities, (ii) results in a significant worsening of
Employee's work conditions, or (iii) requires a relocation by Employee to a
place of work outside of New Britain, Connecticut. Termination of Employee's
services under this Section 5.2 shall be deemed a unilateral, involuntary
termination of employment by Employer and shall be governed by the provisions
of Section 5.1 hereof. Subject to the provisions of Section 7, Employee
shall have no further obligation under this Agreement.
5.3 Employee shall have no duty to mitigate damages in the event of a
termination under the terms of Sections 5.1 or 5.2 or in the event of his
permanent disability under Section 5.4, and if he voluntarily obtains other
employment (including self-employment), any compensation or profits received
or accrued, directly or indirectly, from such other employment shall not
reduce or otherwise affect the obligations of Employer to make payments
hereunder.
5.4 If the employment of Employee shall terminate during the Term of
Employment by reason of the permanent disability of Employee, all payments
that would have been due to Employee under this Agreement had he remained in
the employ of Employer for an additional twelve (12) months reduced by the
amount of disability insurance payments made to Employee under any policy or
plan maintained by Employer, shall continue to be made to him for an
additional twelve (12) months, or until he shall no longer be considered
permanently disabled under Section 2.2, if earlier. If Employee shall die
following a termination of his employment under Section 5.1 or 5.2, or
following a termination during the Term of Employment by reason of the
permanent disability of Employee, all payments that would have been due to
Employee under this Agreement had he lived for a period of twelve (12) months
following the termination of his employment shall be made instead to such
beneficiary as Employee shall have designated in writing. To the extent that
neither Employee nor his designee shall live for such twelve (12) month
period following the termination of Employee's employment, after the death of
the second of them to die, said payments shall be made to the estate of such
person. If Employee shall die without a beneficiary designation in effect,
said payments shall be made to Employee's estate.
5.5 If the employment of Employee shall terminate at a time other than
during the Term of Employment, or if said employment shall terminate for any
of the reasons provided in Section 2.3 hereof, or if Employee shall
unilaterally terminate his employment other than as permitted under Section
5.2, all payments that would have been due to Employee under this Agreement
on or after the date of such termination shall cease, and Employer shall have
no further obligations under this Agreement other than for amounts accrued
but not paid as of the date of such termination.
6. Other Benefits
6.1 During the Term of Employment while actively employed, Employee
shall be entitled to and shall be included in any employee welfare or pension
benefit plan or program of Employer available generally to the employees of
Employer to the extent that he is eligible to participate under the general
provisions of such plans.
6.2 During the Term of Employment while actively employed, Employee
shall be entitled each year to a vacation of at least four (4) weeks, and
during such time his compensation shall be paid in full. The period of
vacation selected each year shall be with the approval of the Employer.
Vacation time which is not taken by the Employee in any year may be deferred
and taken in the first quarter of the following year or, at the option of the
Employer, shall be purchased by the Employer at a per diem rate calculated on
the basis of Employee's then base salary.
7. Confidential Information
Employee understands that in the course of his employment by Employer,
Employee will receive confidential information concerning the business or
purposes of Employer, and which Employer desires to protect. Employee agrees
that he will not at any time during or after the Term of Employment reveal to
anyone outside Employer or use for his own benefit any such information that
has been designated as confidential by Employer or understood by Employee to
be confidential without specific written authorization by Employer. Employee
further agrees not to use any such confidential information or trade secrets
in competing with Employer at any time during or after his employment by
Employer.
8. Covenants by Employee Not to Compete With Employer
(a) Upon termination of Employee's employment by Employer for any
reason (other than a termination pursuant to Sections 5.1 or 5.2 of this
Agreement), Employee covenants and agrees that he will not at any time during
the period of one (1) year from and after such termination directly or
indirectly in any manner or under any circumstances or conditions whatsoever
be or become interested, as an individual, partner, principal, agent, clerk,
employee, stockholder, officer, director, trustee, or in any other capacity
whatsoever, except as a nominal owner of stock of a public corporation, in
any other business similar to the business of Employer or in any way in
competition with the business of Employer within any of the City of New
Britain and the Towns of Berlin, Meriden, Newington, Rocky Hill, Southington
and Plainville, all in the State of Connecticut.
For purposes of this section (a), "Employer" shall be limited to the
People's Savings Bank of New Britain, and the "business of Employer" shall be
limited to its business as a Connecticut savings bank, and any other lines of
business developed or entered into by it, its holding company Peoples Savings
Financial Corp., or any subsidiary of the foregoing, during the term of this
Agreement, but shall not include lines of business of any successor or
affiliated corporation in which Employee is not directly involved.
(b) Employee hereby acknowledges that his services are unique and
extraordinary, and are not readily replaceable, and hereby expressly agrees
that Employer in enforcing the covenants contained in this Section, in
addition to any other remedies provided for herein or otherwise available at
law, shall be entitled in any court of equity having jurisdiction to an
injunction restraining him in the event of a breach, actual or threatened, of
the agreements and covenants contained in this Paragraph.
(c) The parties hereto believe that the restrictive covenants of this
Section are reasonable. However, if at any time it shall be determined by
any court of competent jurisdiction that this Section or any portion of it,
as written, is unenforceable because the restrictions are unreasonable, the
parties hereto agree that such portions as shall have been determined to be
unreasonably restrictive shall thereupon be deemed so amended as to make such
restrictions reasonable in the determination of such court, and said
covenants, as so modified, shall be enforceable between the parties to the
same extent as if such amendments had been made prior to the date of any
alleged breach of said covenants.
9. Termination Upon Change of Control.
Notwithstanding anything contained herein to the contrary, this
Agreement shall terminate and be of no further force and effect upon the
payment in full to Employee of the "Severance Amount" as provided for in the
Change in Control Agreement.
10. Notices.
All notices under this Agreement shall be in writing and shall be deemed
effective when delivered in person to Employee or to the Secretary of
Employer, or if mailed, postage prepaid, registered or certified mail,
addressed, in the case of Employee, to his last known address as carried on
the personnel records of Employer, and, in the case of Employer, to the
corporate headquarters, attention of the Secretary, or to such other address
as the party to be notified may specify by notice to the other party.
11. Successors and Assigns
The rights and obligations of Employer under this Agreement shall inure
to the benefit of and shall be binding upon the successors and assigns of
Employer, including, without limitation, any corporation, individual or other
person or entity which may acquire all or substantially all of the assets and
business of Employer, or of any division of Employer for which Employee has
primary management responsibility, or with or into which Employer may be
consolidated or merged or any surviving corporation in any merger involving
Employer. All references in this Agreement to Employer shall be deemed to
include all such successors and assigns and, upon the occurrence of any event
giving rise to any Person becoming a successor or assign bound hereunder by
the Agreement, Employer shall be thereby relieved of any further obligation
or liability under this Agreement, except for any amounts due and payable to
Employee under the provisions hereof immediately prior to the occurrence of
such event.
12. Arbitration.
Any dispute which may arise between the parties hereto shall be
submitted to binding arbitration in accordance with the Rules of the American
Arbitration Association; provided that any such dispute shall first be
submitted to Employer's Board of Directors in an effort to resolve such
dispute without resort to arbitration. In any dispute which is submitted to
arbitration, the attorney's fees of the prevailing party shall be paid by the
other party.
13. Severability
If any of the terms or conditions of this Agreement shall be declared
void or unenforceable by any court or administrative body of competent
jurisdiction, such term or condition shall be deemed severable from the
remainder of this Agreement, and the other terms and conditions of this
Agreement shall continue to be valid and enforceable.
14. Construction.
This Agreement shall be construed under the laws of the State of
Connecticut. Words of masculine gender mean and include correlative words of
the feminine gender. Section headings are for convenience only and shall not
be considered a part of the terms and provisions of the Agreement.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by
a duly authorized officer and Employee has hereunto set his hand, this ____
day of October, 1996.
THE PEOPLE'S SAVINGS BANK OF NEW BRITAIN
By
Its
XXXXXXX X. XXXXXXXXX
