EXHIBIT 10.b
WASHINGTON TRUST BANCORP, INC.
23 BROAD STREET
WESTERLY, RHODE ISLAND 02891
The Registrant has entered into a Change of Control Agreement with certain of
its executive officers. The form of Agreement attached contains blanks where
the term and the multiple of the executive's base amount provided under the
Agreement vary for certain executives. The executive officers who have entered
into the Agreement, the term of the Agreement and the multiple of the
executive's base amount provided under the agreement for each executive are
listed in the following chart:
Term of Agreement Number Times Base Amount
Executive Officer (Sections 3, 4 and 13) (Section 5 a)
- ------------------- ----------------------- ------------------------
John C. Warren
President and Chief
Executive Officer 3 years 3 times
David V. Devault
Vice President,
Treasurer and Chief
Financial Officer 2 years 2 times
Harvey C. Perry, II
Vice President and
Secretary 2 years 2 times
Stephen M. Bessette
Senior Vice President -
Retail Lending, of the
Bank 1 year 1 time
Vernon F. Bliven
Senior Vice President -
Human Resources, of the
Bank 1 year 1 time
Robert G. Cocks, Jr.
Senior Vice President -
Lending, of the Bank 1 year 1 time
Louis W. Gingerella, Jr.
Senior Vice President -
Credit Administration,
of the Bank 1 year 1 time
B. Michael Rauh, Jr.
Senior Vice President -
Retail Banking, of the
Bank 1 year 1 time
April 11, 1997
[Name and Address of Executive]
Dear _________________:
Washington Trust Bancorp, Inc. ( the "Corporation") considers it
essential to the best interests of its shareholders to foster the continued
employment of key management personnel employed by its wholly-owned subsidiary,
The Washington Trust Company (the "Bank"). In this connection, the Board of
Directors of the Corporation (the "Board") recognizes that the possibility of a
change in control exists and that such possibility, and the uncertainty and
question which it necessarily raises among management, may result in the
departure or distraction of management personnel to the detriment of the
Corporation and its shareholders in this period when their undivided attention
and commitment to the best interests of the Corporation and its shareholders are
particularly important.
Accordingly, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Corporation and the Bank's management.
1. Defined Terms. Certain laws, rules and regulations referenced
in this agreement are attached hereto as Appendices and are hereby incorporated
herein by reference.
2. Change in Control. For purposes of this Agreement, the term
"Change in Control" shall mean:
a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the then
outstanding shares of common stock of the Corporation (the "Outstanding
Corporation Common Stock"); provided, however, that any acquisition by the
Corporation or its subsidiaries, or any employee benefit plan (or related trust)
of the Corporation or its subsidiaries of 20% or more of Outstanding Corporation
Common Stock shall not constitute a Change in Control; and provided, further,
that any acquisition by a corporation with respect to which, following such
acquisition, more than 50% of the then outstanding shares of common stock of
such corporation, is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Corporation Common Stock immediately prior to such
acquisition in substantially the same proportion as their ownership, immediately
prior to such acquisition, of the Outstanding Corporation Common Stock, shall
not constitute a Change in Control; or
b) Individuals who, as of the date of this Agreement, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the date of this Agreement whose election, or nomination for
election by the Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office is in connection with either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board; or
c) Consummation by the Corporation of (i) a reorganization, merger or
consolidation, in each case, with respect to which all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Corporation Common Stock immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 40% of the then outstanding
shares of common stock of the corporation resulting from such a reorganization,
merger or consolidation; (ii) a reorganization, merger or consolidation, in each
case, (A) with respect to which all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Corporation Common
Stock immediately prior to such reorganization, merger or consolidation,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 40% but less than 50% of the then outstanding
shares of common stock of the corporation resulting from such a reorganization,
merger or consolidation, (B) at least a majority of the directors then
constituting the Incumbent Board do not approve the transaction and do not
designate the transaction as not constituting a Change in Control, and (C)
following the transaction members of the then Incumbent Board do not continue to
comprise at least a majority of the Board; or (iii) the sale or other
disposition of all or substantially all of the assets of the Corporation,
excluding a sale or other disposition of assets to a subsidiary of the
Corporation; or
d) Consummation by the Bank of (i) a reorganization, merger or
consolidation, in each case, with respect to which, following such
reorganization, merger or consolidation, the Corporation does not beneficially
own, directly or indirectly, more than 50% of the then outstanding shares of
common stock of the corporation or bank resulting from such a reorganization,
merger or consolidation or (ii) the sale or other disposition of all or
substantially all of the assets of the Bank, excluding a sale or other
disposition of assets to the Corporation or a subsidiary of the Corporation.
3. Continuing Employment. You agree that you shall remain in the employ
of the Corporation and the Bank for a term of year(s) following any Change in
Control of the Company, unless there is an event of Termination, as defined
below, or you die or become unable to perform your duties by reason of
disability.
4. Event of Termination. For purposes of this Agreement, the term
"Event of Termination" shall mean:
a) The involuntary termination of your employment with the Corporation
and/or the Bank, other than for cause. The term "for cause" shall mean on
account of (i) conviction of a crime involving moral turpitude, (ii) willful and
inexcusable failure to perform the duties of your position with the Corporation
and/or the Bank, and (iii) conduct that is clearly and patently detrimental to
the best interests of the Corporation and/or the Bank. In any proceeding,
judicial or otherwise, the Corporation and/or the Bank shall have the burden
proving by clear and convincing evidence that a termination of your employment
following a change in control was for cause. Termination of employment due to
your death or disability shall not be deemed a termination for cause;
b) A reduction in your salary, title, benefits, staff, perquisites, or
duties unless you agree in writing, but only if such event occurs within year(s)
after a Change in Control.
5. Entitlements Upon an Event of Termination
a) Unless otherwise provided herein, within 30 days after an Event of
Termination, the Bank shall pay you that amount that equals ______ times your
base amount as of the date of the Event of Termination;
b) Your entitlements under this Agreement and under any other plans or
agreements of the Corporation and/or the Bank that constitute "parachute
payments" shall never exceed that amount that is 2.99 times your "base amount."
For purposes of this Agreement, the term "parachute payment" shall have the
meaning ascribed to it by Section 280G(b)(2)(A) of the Internal Revenue Code of
1986, as amended and in effect on the date hereof (the "Code"), including the
flush language, but without regard to clause (ii) thereof, and the term "base
amount" shall have the meaning ascribed to it by Section 280G(b)(3) of the Code;
c) In the event that your entitlements to parachute payments under this
or any other agreement or plan of the Corporation and/or the Bank exceed 2.99
times your base amount, you agree that your total benefits shall be reduced to
2.99 times your base amount in such manner as you shall designate to the Bank in
writing. In default of such designation, such benefits shall be reduced in
proportion to their relative present values as determined by the Bank's
certified public accountants using the discount rate prescribed by Section
280G(d)(4) of the Code;
d) The Bank shall pay all legal fees and expenses that you incur
seeking to obtain or enforce any right or benefit provided by this Agreement;
e) You shall not be required to mitigate the amount of any payment
provided for in this Section 5 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Agreement be
reduced by any compensation you may earn as a result of employment by another
employer or by reason of retirement benefits after the date of this Agreement or
otherwise.
6. Successors; Binding Agreement.
a) The Corporation and 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 Corporation and/or the
Bank to assume expressly and perform this Agreement. Failure of the Corporation
and/or 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 you to compensation from the Bank in the same amount and on the
same terms as you would be entitled to hereunder following an Event of
Termination, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the date on which
you become entitled to such compensation from the Bank. As used in the
agreement, "Corporation" and "Bank" shall mean the Corporation and the Bank,
respectively, as hereinbefore defined and any successor to its respective
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
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, unless
otherwise provided herein, such amount shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified/registered mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth on the first page of this Agreement,
provided that all notices to the Corporation and/or the Bank shall be directed
to the attention of the Board with a copy to the Secretary of the Corporation
and/or the Bank, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of a change of
address shall be effective only upon receipt.
8. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification, or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach of the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions as the same or at any prior or
subsequent time. No agreements or representations, oral, or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Rhode Island.
9. Not Employment Agreement. No provision of this Agreement shall be
deemed to provide for a continuing right to employment with the Corporation or
the Bank.
10. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
12. Arbitration. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
applicable rules and judgment and the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
13. Term of Agreement. This Agreement shall remain in effect so long as
you are employed by the Corporation and/or the Bank unless terminated in writing
upon 30 days notice by either party; provided, however, following a Change in
Control, that the Corporation and the Bank shall have no right to terminate this
agreement for year(s).
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return the enclosed copy of this letter which will then
constitute our agreement on this subject.
Sincerely,
WASHINGTON TRUST BANCORP, INC.
THE WASHINGTON TRUST COMPANY
By:_________________________________________
Name:
Title:
AGREED to this ____ day of _________, 1997.
- -----------------------------
[Name of Executive]
APPENDIX 1
List of Appendices (not included as part of this exhibit)
Copies of the following laws, rules and regulations referenced in the
agreement to which this Appendix is a part are attached hereto and incorporated
therein by reference:
Appendix 1A -- Section 13d(3) and Section 14(d)(2) of the Exchange Act
Appendix 1B -- Rule 13d-3 promulgated under the Exchange Act
Appendix 1C -- Rule 14a-11 of Regulation 14A promulgated under the Exchange Act
Appendix 1D -- Section 280G of the Code