Exhibit 10.2
Amended and Restated EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement"), dated as of
June 30, 1997, is made by and among Springfield Institution for Savings, a state
chartered stock savings bank organized under the laws of the Commonwealth of
Massachusetts, having its principal; offices at 1441 Main Street, P.O. Box 3034,
Springfield, Massachusetts 01102-3034 (the "Bank"), and F. William Marshall,
Jr., residing at 87 Ely Road, Longmeadow, MA 01106 (the "Executive") and shall
be effective as of the above date (the "Effective Date").
Recitals:
A. The Executive is employed as President & Chief Executive Officer by the Bank,
having previously entered into an "Employment Agreement" with the Bank dated
August 23, 1994 (the "Original Employment Agreement") which provided the terms
and conditions of such an employment relationship.
B. On June 21, 1996, the Bank reorganized into a bank holding company form of
organization (the "Reorganization"), where the Bank has become the wholly-owned
subsidiary of SIS Bancorp, Inc. (the "Holding Company"), as the parent company
of the Bank. In order to retain the services of the Executive as President & CEO
of the Bank and Holding Company, the Board of Directors of the Bank have
determined that it is in the best interests of the Bank to restate and amend the
Original Employment Agreement to update the terms of the Executive's employment
and to modify the definition of "Change in Control".
C. The Executive is willing to agree to continue such employment on the terms
and conditions outlined herein,
NOW, THEREFORE, in return for the mutual covenants herein, and other good and
valuable consideration, the Bank and the Executive hereby agree that the
Original Employment Agreement is deleted in its entirety and replaced with this
Amended and Restated Employment Agreement as follows.
1. Definitions.
1.1 "Affiliate" means any person or entity of any kind effectively
controlling, effectively controlled by or effectively under common control with
the Bank.
1.2 "Board" means the board of directors of the Bank.
1.3 "Cause" means termination due to the Executive's (a) personal
dishonesty, (b) incompetence, (c) willful misconduct, (d) breach of fiduciary
duty involving personal profit, (e) intentional failure to perform stated
duties, (f) willful violation of any law, rule or regulation (other than traffic
violations or similar offenses), or final cease-and-desist order, or (g)
material breach of any provision of this Agreement.
1.4 "Change in Control" means, after the date of this Agreement:
(i) a change in control of the Bank, or of any parent holding company
of the Bank (the "Parent Company") which has its common stock
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), of a nature that would be required to be reported in
response to Item 1 of a current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Exchange Act ;
(ii) a change in control of the Bank within the meaning of 12 U.S.C.
ss.1817(j), the Change in Bank Control Act or any acquisition of
control of the Parent Company by any company or person within the
meaning of 12 U.S.C. ss.1841(a)(2), the Bank Holding Company Act of
1956, as amended, or 12 U.S.C. ss.1817(j), the Change in Bank Control
Act, as applicable;
(iii) individuals who constitute the Board of Directors of the Parent
Company as of the date of this Addendum (the "Incumbent Board") cease
for any reason, to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the effective date of
this Addendum whose election was approved by a vote of at least
three-quarters of the directors then comprising the Incumbent Board, or
whose nomination for election by the Parent Company's shareholders was
approved by the Parent Company's Nominating Committee then serving
under the Incumbent Board, shall be, for purposes of this clause (iii),
considered as though he or she was a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of 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;
(iv) approval by the shareholders of the Parent Company of a
reorganization, merger or consolidation, or the consummation of any
such reorganization, merger or consolidation, other than, in any case a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the Voting Interest in the Parent Company
beneficially own, directly or indirectly, immediately after such
reorganization, merger or consolidation more than eighty percent (80%)
of the Voting Interest of the corporation or other entity resulting
from such reorganization, merger or consolidation in substantially the
same proportions as their respective ownership, immediately prior to
such reorganization, merger or consolidation, of the Voting Interest in
the Parent Company;
(v) approval by the shareholders of the Parent Company of (1) a
complete liquidation or dissolution of the Parent Company, or (2) the
sale or other disposition of all or substantially all of the assets of
the Parent Company, or the occurrence of any such liquidation,
dissolution, sale or other disposition, other than, in any case, to a
Subsidiary, directly or indirectly, of the Parent Company, or any
affiliate; and/or
(vi) the solicitation of proxies from shareholders of the Parent
Company, by someone other than the current management of the Parent
Company and without the approval of the Board of Directors of the
Parent Company, seeking shareholder approval of a plan or
reorganization, merger or consolidation of the Parent Company with one
or more corporations as a result of which the shareholders' interests
in the Parent Company are actually exchanged for or converted into
securities not issued by the Parent Company.
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(vii) No failure on the part of the Executive to exercise any rights
upon the occurrence of a Change in Control shall be deemed a waiver of
or otherwise impair the rights of the Executive in respect to any
subsequent events or circumstances constituting a Change in Control.
1.5 "Code" means the Internal Revenue Code of 1966, as amended, and as
in effect from time to time, and/or any successor code thereto.
1.6 "Date of Termination" means the date specified in the Notice of
Termination (as defined in Section 6.8 of this Agreement); provided, however,
that if within thirty (30) days after any Notice of Termination is given, the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction, including all
appeals, unless the time for appeal therefrom has expired and no appeal has been
perfected; provided, further, however, that the Date of Termination shall (a) in
no case be later than the date on which the Term of Employment expires, and (b)
be extended by a notice of dispute only if such notice is given in good faith
and the party giving such notice pursues the resolution of such dispute with
reasonable diligence.
1.7 "Excise Tax" means any excise tax imposed under Section 4999 of the
Code and/or any successor section thereto.
1.8 "Good Reason" means, and shall be deemed to exist if, without the
written consent of the Executive, (a) the Bank (or any Parent for the balance of
this Section 1.8) fails to appoint or reappoint the Executive as President and
Chief Executive Officer of the Bank, (b) there occurs any reduction of Base
Salary or material reduction in other benefits of any material change by the
Bank to the Executive's function, duties, or responsibilities in effect on the
date hereof and/or as set forth in Section 4.1 of this Agreement, which change
would cause the Executive's position with the Bank to become one of lesser
responsibility, importance, or scope from the position and attributes thereof in
effect on the date hereof and/or as set forth in Section 4.1 of this Agreement
(and any such material change shall be deemed a continuing breach of this
Agreement), (c) there occurs any material breach of this Agreement by the Bank,
(d) a Change in Control occurs, or (e) the Bank, if and after a Suspension for
Disability (as defined in Section 6.2(a) occurs and after a Change in Control
occurs, fills the Executive's position (in the manner set forth in Section
6.2(b) of this Agreement).
1.9 "Parent" means any corporation which has a direct or indirect legal
or beneficial ownership interest in the Bank, but only if any such corporation
owns or controls, directly or indirectly, securities possessing at least 50% of
the total combined voting power of all classes of securities of the Bank.
1.10 "Subsidiary" means any corporation (other than the Bank) in which
the Bank or any Parent has a direct or indirect legal or beneficial ownership
interest, but only if the Bank or the Parent, as the case may be, owns or
controls, directly or indirectly, securities possessing at least 50% of the
total combined voting power of all classes of securities in any such
corporation.
1.11 "Retirement" means the termination of the Executive's employment
with the Bank for any reason by the Executive at any time after the Executive
attains age 65.
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1.12 "Voting Interest" means securities of any class or classes or
other ownership interests having general voting power under ordinary
circumstances to elect members of a board of directors or trustees of any
entity.
2. Employment.
2.1 General. Subject to the terms and provisions set forth in this
Agreement, the Bank, during the Term of Employment, agrees to continue to employ
the Executive as President and Chief Executive Officer of the Bank and the
Executive hereby accepts such continued employment.
2.2 FDIC Suspension. If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Bank's obligations
under this Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the
Bank's obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank shall (i) pay the Executive all or part of the
compensation withheld while its contract obligations were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
3. Term of Employment.
3.1 Term. The term of employment under this Agreement shall commence as
of the Effective Date and, unless extended as provided below or earlier
terminated by the Bank or the Executive under Section 6 of this Agreement, shall
continue until the third anniversary of the Effective Date (the "Term of
Employment"). As of each anniversary of the date of this Agreement, a one year
extension of the then Term of Employment shall automatically be effected, unless
either the Bank or the Executive shall give written notice to the other party,
not less than four months prior to the anniversary of the date of this Agreement
of the intent of such party to terminate the expiration of the Term of
Employment.
3.2 FDIC Removal. Notwithstanding anything to the contrary in this
Agreement, if the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1818(e)(4) or (g)(1)) all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
Bank and/or the Executive, if any, shall not be affected.
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4. Positions, Responsibilities and Duties.
4.1 Positions and Duties. During the Term of Employment, the Executive
shall be employed and shall serve as President and Chief Executive Officer of
the Bank. In such position(s), the Executive shall have the duties,
responsibilities and authorities and authority as determined and designated from
time to time by the Board, including, without limitation, complete management
authority with respect to, and total responsibility for, the overall operations
and day-to-day business and affairs of the Bank. the Executive shall serve under
the direction and supervision of, and report only to, the Board. Notwithstanding
the above, the Executive shall not be required to perform any duties and
responsibilities (a) which would result in a noncompliance with or violation of
any applicable law, regulation, regulatory bulletin, and/or any other regulatory
requirement or (b) on a regular basis in any locations outside the counties of
Berkshire, Franklin and Hampden or Hampshire, unless agreed upon by the
Executive.
4.2 Attention to Duties and Responsibilities. During the Term of
Employment, the Executive shall, except for periods of absence occasioned by
illness, vacation in accordance with Section 5.6, and reasonable leaves of
absence in accordance with the practices of the Bank as of the date of this
Agreement, devote substantially all of his business time to the business and
affairs of the Bank and the Executive shall use his best efforts, business
skills, ability and fidelity to perform faithfully and efficiently the duties
and responsibilities contemplated by this Agreement; provided, however, that the
Executive shall be allowed, to the extent such activities do no present a
conflict of his duties and responsibilities hereunder, (a) to manage the
Executive's personal affairs, and (b) (i) to serve on boards or committees of
civic or charitable organizations or trade associations, and (ii) after
obtaining the consent of the Board, as evidenced by a written resolution of the
Board and under the terms and conditions specified in any such resolution, to
serve on the boards of directors and trustees of companies or other
organizations and associations; provided, further, however, that all offices or
positions which the Executive currently holds or has held prior to the date to
this Agreement and those set forth on Exhibit "A", annexed hereto are designated
as currently consented to positions.
5. Compensation and Other Benefits.
5.1 Base Salary. During the Term of Employment, the Executive shall
receive a base salary of $360,000.00 per annum ("Base Salary") payable in
accordance with the Bank's normal payroll practices. Such Base Salary shall be
reviewed at least annually by the Board for increase in the Board's sole
discretion. Such Base Salary as so increased shall then constitute the
Executive's Base Salary as so increased shall then constitute the Executive's
"Base Salary" for purposes of this Agreement. Notwithstanding the foregoing,
after a Change in Control occurring during the Term of Employment, the Base
Salary or the Executive shall be increased not less often than once every twelve
calendar months increased not less than often than once every twelve calendar
months during the Term of Employment in an amount not less than the average
increase the Executive had received in the prior three (3) years or for the
length of the Executive's employment.
5.2 Annual Bonus. During the Term of Employment, the Executive shall be
entitled to participate in an equitable manner with other executive officers of
the Bank in such discretionary bonus payment or awards as may be authorized,
declared, and paid by the Board to the Bank's executive employees. No other
compensation or additional benefits provided for in this Agreement shall be
deemed a substitute for the Executive's right, if any, to receive such bonuses
if, when and as declared by the Board.
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5.3 Incentive, Retirement, and Savings Plans. During the Term of
Employment, the Executive shall participate in all incentive, pension,
retirement, supplemental retirement, savings, stock option and other stock grant
plans, as well as other employee benefit plans and programs, if any, maintained
from time to time by the Bank for the benefit of senior executives and/or other
employees of the Bank.
5.4 Welfare Benefit Plans. During the Term of Employment, the
Executive, the Executive's spouse, if any, and their eligible dependent, if any,
shall participate in and be covered by all the welfare benefit plans and
programs, if any, and/or other employees of the Bank.
5.5 Expense Reimbursement. During the Term of Employment, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses,
including reasonable business travel expenses, incurred by the Executive in
performing his duties and responsibilities hereunder in accordance with the
policies and procedures of the Bank as in effect at the time the expense was
incurred, as the same may be from time to time.
5.6 Vacation and Fringe Benefits. During the Term of Employment, the
Executive shall be entitled to five (5) weeks paid vacation each calendar year
at such times which do not materially interfere with the performance of the
Executive's duties hereunder. In addition, during the Term of Employment, the
Executive shall be eligible to benefit from such fringe benefits and
prerequisites, if any, in accordance with the policies of the Bank and as in
effect and provided from time to time to senior executives of the Bank.
Notwithstanding the above, the Executive, during the Term of Employment, shall
retain, pursuant to current policy and practice of the Bank, all privileges, if
any, including club memberships and automobile usage of a bank-owned vehicle, to
which he is entitled on the date of this Agreement.
6. Termination.
6.1 Termination Due to Death. In the event of the Executive's death
during the Term of Employment, the Term of Employment shall thereupon end and
his estate or other legal representative, as the case may be, shall, subject to
Sections 2.2, 3.2, 6.9, 6.11 and 6.12 of this Agreement, only be entitled to:
(a)(i)(A) Base Salary Continuation at the rate in effect (as provided
in Section 5.1 of the Agreement) on the Date of Termination for a six month
period commencing on such Date of Termination, or (B), if Board so determines in
its sole discretion and in lieu of such six month salary continuation described
above in (A), a lump sum payment equal in amount to the present value of such
Base Salary continuation (reasonably determined using a discount rate equal to
the most recent quote available for the one year United States Treasury Bill
rate on the Date of Termination) payable within thirty business days after the
Date of Termination, and (ii) a pro-rata annual bonus for the fiscal year in
which such termination occurs, such pro-rata bonus amount to be (I) pro-rated
based on a minimum of six months service during the fiscal year of the Bank
(prior to the Date of Termination), (II) determined in good faith by the Board
(but in its sole discretion), and (III) if any such bonus is payable, paid on or
about the same date that the annual bonus amounts payable in respect of such
fiscal year, in any, to the senior executives of the Bank are actually paid to
them;
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(b) any Base Salary accrued, but not less than for a period of six
months to the Date of Termination or any bonus actually awarded, but not yet
paid as of the Date of Termination;
(c) reimbursement for all expenses (under Section 5.5) incurred as the
Date of Termination, but not yet paid as of the Date of Termination;
(d) payment of the per diem value of any unused vacation days accruing
during the Term of Employment and the unused, unaccrued portion of any vacation
days available through the end (but not beyond) of the calendar year of the Bank
in which such termination occurs;
(e) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans and programs,
if any, of the Bank or any Subsidiary; and
(f) continuation of the welfare benefits of the Executive and
Executive's dependents, or any of the same, at the level in effect (as provided
for by Section 5.4 of this Agreement) on, and at the same out-of pocket cost to
the Executive as of, the Date of Termination for a six (6) month period
commencing on the Date of Termination (or, if such continuation is not permitted
by applicable law or if the Board so determines in its sole discretion, the Bank
shall provide the economic equivalent in lieu thereof);
(g) any rights to indemnification in accordance with Section 11 of this
Agreement.
6.2 Suspension for Disability.
(a) If, during the Term of Employment, the Executive shall have been
absent from his duties with the Bank on a full-time basis due to physical or
mental illness for six (6) consecutive months, the Bank may give thirty (30)
days written notice of potential suspension. If the Executive shall not have
returned to the full-time performance of his duties within such 30-day period,
the Bank may suspend the Executive's employment for "Disability" (a "Suspension
for Disability").
(b) If a Suspension for Disability occurs during the Term of
Employment, the Bank will pay the Executive a bi-weekly payment equal to
two-thirds (2/3) of the Executive's bi-weekly rate of Base Salary on the
effective date of the Suspension for Disability. These payments shall commence
on the effective date of the Executive's Suspension for Disability and will end
on the earlier of (i) Date the Executive returns to full-time employment of the
Bank; (ii) the Executive's equivalent full-time employment by another employer;
(iii) the Executive's retirement; (iv) the Executive's death; or (v) the Term of
Employment. After a Suspension for Disability occurs, the Bank shall be free to
fill the Executive's position, but such action by the Bank, shall constitute
Good Reason if it occurs after a Change in Control. Upon the Executive being
able to return to full-time employment before the expiration of the Term of
Employment, the Executive shall be offered an equivalent available position and
otherwise be subject to the provisions of this Agreement. The disability
payments hereunder will be in addition to any benefit payable from any qualified
or non-qualified retirement plans or programs maintained by the Bank but will be
reduced by payments received by the Executive on account of such disability
under any long-term disability plan maintained for the Bank's
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employees or maintained by the Executive. The Executive shall maintain any such
disability insurance during the Term of Employment.
(c) During the Term of Employment, the Bank will cause to be continued
life and health coverage and such other benefits substantially identical to the
coverage and benefits maintained by the Bank for the Executive prior to the
occurrence of any Suspension for Disability.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation (except as otherwise provided in Section 6.2(b) above), accrued
benefits or pension granted or accruing to the Executive during the Term of
Suspension. Nothing in this Section 6.2 shall abrogate or limit other provisions
of this Agreement granting rights to the Executive or the Executive's spouse or
the Executive's estate following death, retirement or termination, if
applicable.
(e) continuation of the welfare benefits of the Executive and the
Executive's dependents, or any of the same, at the level in effect (as provided
for by Section 5.4 of this Agreement) on, and at the same out-of pocket cost to
the Executive as of, the Date of Termination (or if such continuation is not
permitted by applicable law or if the Board so determines in its discretion, the
Bank shall provide the economic equivalent in lieu thereof).
6.3 Termination by the Board for Cause. The Board may terminate the
Executive's employment hereunder for Cause, as provided below. If the Board
terminates the Executive's employment hereunder for Cause, the Term of
Employment (if not already expired) shall thereupon end as set forth below and
the Executive shall, subject to Sections 2.2, 3.2, 6.9, 6.11 and 6.12 of this
Agreement, only be entitled to:
(a) Base Salary up to and including the Date of Termination;
(b) any bonuses actually awarded, but not yet paid as of the Date of
Termination;
(c) reimbursement for all expenses (under Section 5.5) incurred as of
the Date of Termination, but not yet paid as of the Date of Termination;
(d) payment of the per diem value of any unused vacation days accruing
during the Term of Employment and, to the extent not prohibited by applicable
law, regulation, regulatory bulletin, and/or any other regulatory requirement,
as the same exists or may hereafter be promulgated or amended the unused,
unaccrued portion of any vacation days available through the end and (but not
beyond) of the calendar year of the Bank in which such termination occurs;
(e) to the extent not prohibited by applicable law, regulation,
regulatory bulletin, and/or any other regulatory requirement, as the same exists
or may hereafter be promulgated or amended, any other compensation and benefits
as may be provided in accordance with the term sand provisions of any applicable
plans and programs, if any, of the Bank or any Subsidiary; and
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(f) any rights to indemnification in accordance with Section 11 of this
Agreement.
In each case, in determining Cause the alleged acts or omissions of the
Executive shall be measured against standards generally prevailing in the
banking industry generally and the ultimate existence of Cause must be confirmed
by no less than 51% of the Incumbent Board (as constituted in accordance with
Section 1.4(c) of this Agreement) at a meeting prior to any termination
therefor; provided, however, that it shall be the Bank's burden to prove the
alleged facts an omissions and the prevailing nature of the standards the Bank
shall have alleged are violated by such acts and/or omissions of the Executive.
In the event of such a confirmation by 51% or more of the Board, the Bank shall
notify the Executive that the Bank intends to terminate the Executive's
employment for Cause under this Section 6.3 (the Executive's "Confirmation
Notice"). The Confirmation Notice shall specify the act, or acts, upon the basis
of which the Board has confirmed the existence of Cause and must be delivered to
the Executive within ninety (90) days after a majority of the Board (excluding,
if applicable, the Executive) has actual knowledge of the events giving rise to
such purported termination. If the Executive notifies the Bank in writing (the
"Opportunity Notice") within thirty (30) days after the Executive has received
the Confirmation Notice, the Executive (together with counsel) shall be provided
one opportunity to meet with the Board (or a sufficient quorum thereof) to
discuss such act or acts. Such opportunity to meet with the Board shall be fixed
and shall occur on a date selected by the Board (such date being not less than
ten (10) nor more than forty-five (45) days after the Bank receives the
Opportunity Notice from the Executive). Such meeting shall take place at the
principal offices of the Bank or such other location as agreed to by the
Executive and the Bank. During the period commencing on the date the Bank
receives the Opportunity Notice and ending on the date next succeeding the date
on which such meeting between the Board (or sufficient quorum thereof) and the
Executive is scheduled to occur and not withstanding anything to the contrary in
this Agreement, the Executive shall be suspended from employment with the Bank
(with pay to the extent not prohibited by applicable law, regulation, regulatory
bulletin, and/or any other regulatory requirement, as the same exists or may
hereafter be promulgated or amended) and the same exists or may hereafter be
promulgated or amended) and the Board may, during such suspension period,
reasonably limit the Executive's access to the principal offices of the Bank or
any of its assets. If the Board properly sets the date of such meeting and if
the Board (or a sufficient quorum thereof) attends such meeting and in good
faith does not rescind its confirmation of Cause at such meeting or if the
Executive fails to attend such meeting for any reason, the Executive's
employment by the Bank shall, immediately upon the closing for such meeting and
the delivery to the Executive of the Notice of Termination, be terminated for
Cause under this Section 6.3. If the Executive does not respond in writing to
the Confirmation Notice in the manner and within the time period specified in
this Section 6.3, the Executive's employment with the Bank shall, on the
thirty-first day after the receipt by the Executive of the Confirmation Notice,
be terminated for Cause under this Section 6.3. In the event of any dispute
hereunder, Executive shall be entitled, to the extent not prohibited by
applicable law, regulation, regulatory bulletin, and/or any other regulatory, as
the same exists or may hereafter be promulgated or amended, until the earlier to
occur of (i) the Date of Termination, (ii) the expiration of the current state
Term of Employment, or (iii) the resolution of such dispute to (A) be paid
bi-weekly his then Base Salary, and (b) continue to receive all other benefits;
and there shall be no reduction whatsoever of any amounts subsequently paid to
the Executive upon resolution of such dispute as a result of, or in respect to,
such interim payments or coverage. The procedure set forth in this Section 6.3
to determine the existence of Cause shall at all times be subject to the
requirements of applicable law, regulation, regulatory bulletin or other
regulatory requirements.
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6.4 Termination Without Cause or for Good Reason. The Bank may
terminate the Executive's employment hereunder at any time without Cause. The
Executive may terminate his employment hereunder for Good Reason at any time by
delivery or written notice to the Bank within the six-month period commencing
after the occurrence of the Good Reason effective forty-five (45) days after
such written notice is delivered. If the Bank terminates the Executive's
employment hereunder without Cause (other than due to Retirement, death,
Disability or the normal expiration of the full Term of Employment), or if the
Executive terminates his employment hereunder for Good Reason, the Term of
Employment shall thereupon end (if not already expired) and the Executive shall,
subject to Sections 2.2, 3.2, 6.9, 6.11, and 6.12 of this Agreement, only be
entitled to:
(a) as liquidated damages, a cash lump sum equal to two (2) times the
Executive's "Highest Annual Compensation" (as herein defined), provided that if
the Executive terminates for Good Reason following a Change in Control, the cash
lump sum shall be equal to three (3) times the Executive's "Highest Annual
Compensation". For purposes of this Agreement, "Highest Annual Compensation"
shall mean the sum of (i) the highest per annum rate of Base Salary, and (ii)
the aggregate bonus amounts paid to the Executive or which would have been paid
but for an election to defer payment to a later period), in respect to any
fiscal year of the Bank at any time during the Term of Employment;
(b) any Base Salary accrued to the Date of Termination or any bonus
actually awarded, but not yet paid as of the Date of Termination;
(c) reimbursement for all expenses (under Section 5.5) incurred as of
the Date of Termination, but not yet paid as of the Date of Termination;
(d) payment of the per diem value of any unused vacation days accruing
during the Term of Employment and the unused, unaccrued portion of any vacation
days available through the end (but not beyond) of the calendar year of the Bank
in which such termination occurs;
(e) continuation of the welfare benefits of the Executive and
dependents, or any of the same, at the level in effect (as provided for by
Section 5.4 of this Agreement) on, and at the same out-of-pocket costs to the
Executive as of, the Date of Termination for the three-year period commencing on
the Date of Termination (or, if such continuation is not permitted by applicable
law or if the Board so determines in its sole discretion, the Bank shall provide
the economic equivalent in lieu thereof); (f) any other compensation and
benefits as may be provided in accordance with the terms and provisions of any
applicable plans or programs, if any, of the Bank or any Subsidiary; and
(g) any rights to indemnification in accordance with Section 11 of this
Agreement.
In the event of any dispute hereunder, the Executive shall be entitled until the
earlier to occur of (i) the Date of Termination, (ii) the expiration of the
current stated Term of Employment, or (iii) the resolution of such dispute to
(A) be paid bi-weekly his then Base Salary, and (B) continue to receive all
other benefits; and there shall be no reduction whatsoever of any amounts
subsequently paid to the Executive upon resolution of such dispute as a result
of, or in respect to, such interim payments or coverage.
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6.5 Voluntary Termination. During the Term of Employment, the Executive
may effect, upon sixty (60) days prior written notice to the Bank, a Voluntary
Termination of his employment hereunder and thereupon the Term of Employment (if
not already expired) shall end. A "Voluntary Termination" shall mean a
termination of employment by the Executive on his own initiative other than (a)
a termination due to death or Disability, (b) a termination for Good Reason, (c)
a termination due to Retirement, or (d) a termination as a result of the normal
expiration of the full Term of Employment. A Voluntary Termination shall,
subject to Section 2.2, 3.2, 6.9, 6.11 and 6.12 of this Agreement, entitle the
Executive only to all of the payments and benefits which the Executive would be
entitled to in the event of a termination of his employment by the Bank for
Cause.
6.6 Termination Due to Retirement. The Executive may terminate the
Executive's employment hereunder due to Retirement upon thirty (30) days prior
written notice to the Bank. If, during the Term of Employment, the Executive's
employment is so terminated due to Retirement, the Term of Employment shall
thereupon and the Executive shall, subject to Sections 2.2, 3.2, 6.9, 6.11 and
6.12 of this Agreement, only be entitled to;
(a) Base Salary up to and including the Date of Termination;
(b) any bonus actually awarded, but not yet paid as of the Date of
Termination;
(c) reimbursement for all expenses (under Section 5.5) incurred as of
the Date of Termination, but not yet paid as of the Date of Termination.
(d)(i) continuation of the Executive's welfare benefits (as described
in Section 5.4 of this Agreement) at the level in effect on the Date of
Termination for the one-year period following the termination of the Executive's
employment due to Retirement (or, if such continuation is not permitted by
applicable law or if the Board so determines in its sole discretion, the Bank
shall provide the economic equivalent in lieu thereof), and (ii) any other
compensation and benefits as may be provided in accordance with the terms and
provisions of any applicable plans and programs, if any, or the Bank or any
Subsidiary;
(e) payment of the per diem value of any unused vacation days accruing
during the Term of Employment and the unused, unaccrued portion of any vacation
days available through the end (but not beyond) of the calendar year of the Bank
in which such termination occurs; and
(f) any rights to indemnification in accordance with Section 11 of this
Agreement.
6.7 No Mitigation; No Offset. In the event of any termination of
employment under this Section 6, the Executive shall be under no obligation to
seek other employment or
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to mitigate damages and there shall be no offset against any amounts due to
Executive under this Agreement for any reason, including, without limitation, on
account of any remuneration attributable to any subsequent employment that the
Executive may obtain. Any amounts due under this Section 6 are in the nature of
severance payments, or liquidated damages, or both, and are not in the nature of
a penalty.
6.8 Notice of Termination. Any termination of the Executive's
employment under this Section 6 requiring advance written notice shall be
communicated by a notice of termination to the other party hereto given in
accordance with Section 12.3 of this Agreement (the "Notice of Termination").
The Notice of Termination, in the case of a termination by the Bank for Cause,
or a termination by the Executive for Good Reason, shall (a) indicate the
specific termination provision in this Agreement relied upon, and (b) set forth
in reasonable detail the dates, facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated.
6.9 Code Section 280G Coverage. Notwithstanding any other provisions of
this Agreement or of any other agreement, contract, understanding, plan or
program entered into or maintained by the Bank, if any payment or benefit
received or to be received by the Executive in connection with the termination
of the Executive's employment pursuant to a Change in Control, any amount
payable under this Agreement or any other payments to which Executive is
entitled under any benefit plan, option or stock grant plan, incentive plan or
other agreement with the Bank constitute "excess parachute payments" (as defined
in Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")),
the Bank shall pay to the Executive an additional sum equal to: (i) the excise
tax imposed by Section 4999 of the Code on the excess parachute payments
(including any payments made pursuant to this sentence), and (ii) the
Executive's federal, state and local income and payroll taxes imposed upon the
payments made pursuant to this sentence.
6.10 Payment. Except as otherwise provided in this Agreement, any
payments to which the Executive shall be entitled to under this Section 6,
including, without limitation, any economic equivalent of any benefit, shall be
made, to the extent practicable, within five (5) business days following the
Date of Termination.
6.11 Bank Regulatory Limitations.
6.11.1 Any payments made to the Executive pursuant to this Agreement,
or otherwise, are subject to and conditioned upon their compliance with 12
U.S.C. Section 1828(k) and any regulations promulgated thereunder.
6.11.2 To the extent required by applicable law, regulation, regulatory
bulletin, and/or any other regulatory requirement, the aggregate amount and/or
value of the Compensation paid as a result of any termination of the Executive's
employment with the Bank, regardless of the reason for any such termination of
employment, shall not exceed the limit prescribed by applicable law, rule or
regulation.
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6.12 Other Required Provisions.
6.12.1 If the Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all obligations under this Agreement shall
terminate as of the date of default, but this Section 6.12.1 shall not affect
the vested rights of the Bank and/or Executive, if any.
6.12.2 All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the Bank, (i) by the director, or his or her
designee, at the time the Federal Deposit Insurance Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act; or (ii) by the
director, or his designee, at the time director, or his or her designee,
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by such director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by any such actions.
6.13 Post Termination Obligations. During the Term of Employment and
for one (1) full year after the expiration or termination thereof, or subject to
ordinary court process, the Executive shall, upon reasonable notice, use his
reasonable best efforts to cooperate with the Bank by providing such information
and assistance to the Bank as may be reasonably be required by the Bank and the
Bank's expense in connection with any litigation not commenced by or involving
the Executive in which the Bank or any of its Subsidiaries or Affiliates is, or
may become, a party.
7. Non-exclusivity of Rights; Non-extension Severance.
7.1 Other Benefits. Except as is otherwise specifically provided in
this Agreement, the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided or maintained by the
Bank, an for which the Executive may be eligible an qualify, shall not be
prevented or limited, and the Executive's rights under any future agreements
with the Bank and/or any Affiliate, including, without limitation, any stock
option agreement shall no be limited or prejudiced. Subject to Section 7.2
below, this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to the Executive of a kind elsewhere provided. Except as
otherwise specifically provided in this Agreement, no provision of this
Agreement shall be interpreted to mean or result in the Executive receiving
fewer benefits than those available to him without reference to this Agreement.
7.2 Non-extension Severance. If (a)(i) the Executive's employment
hereunder is not terminated or suspended under Sections 6.1, 6.2, 6.3, 6.4, 6.5
or 6.6 of this Agreement prior to the expiration of the Term of Employment, (ii)
any such termination or suspension of the Executive's employment is not
initiated prior to the expiration of the Term of Employment, or (b) the Term of
Employment is not extended by the Bank, and (c) the Executive's employment with
the Bank terminates after the expiration of the Term of Employment (other than
for Cause), the Executive shall be entitled to receive, in lieu of any severance
payments or severance benefits under any other plan or program maintained by the
Bank or any Affiliate, (1) Base Salary continuation at the rate in effect (as
provided in Section 5.1 of and (2) welfare benefit continuation, at the level in
effect (as provided for by Section 5.4 of this Agreement) on, and at the same
out-of-pocket cost to the Executive as of, the expiration of the Term of
Employment, in each case (1) and
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(2), for the greater of (A) the period ending six (6) months after the
Executive's employment terminates, or (B) the period commencing on the date the
Executive's employment terminates and ending as of the Term of Employment.
Notwithstanding the above, if the Board determines in its sole discretion and in
lieu only of such Base Salary continuation in (1), a lump sum payment, equal to
the present value of such Base Salary continuation (reasonably determined using
the discount rate specified in Section 6.1(a)(1)), shall be paid to the
Executive within thirty (30) days after the date the Executive's employment
terminates. Notwithstanding anything to the contrary in this Section 7.2, if (x)
there occurs a Change in Control during the Term of Employment, (y) the Term of
Employment is not extended by the Bank up to and/or through the Term of
Employment, and (z) the Executive's employment with the Bank is subsequently
terminated (other than for Cause), the Executive, in lieu of the Base Salary and
welfare benefits continuation under this Section 7.2 shall be entitled to
receive the payments and benefits set forth in Section 6.4 of this Agreement.
8. Resolution of Disputes. With the exception of proceedings for
equitable relief brought pursuant to this Section or Section 9.2 of this
Agreement, any dispute or controversy arising under or in connection with this
Agreement may, at either the Bank's or the Executive's option, be settled
exclusively by arbitration in Springfield, Massachusetts in accordance with the
rules of the American Arbitration Association then in effect and at the Bank's
expense. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance in court of his right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement. If a claim for any payments or benefits under
this Agreement or any other provision of this Agreement is disputed by the Bank
and the Executive, the Executive shall, to the extent and at such time or times
as is not prohibited by applicable law, regulation, regulatory bulletin, and/or
any other regulatory requirement, as the same exists or may be hereafter
promulgated or amended, if the Executive is successful in his claim, be
reimbursed for all reasonable attorney's fees and expenses incurred by the
Executive in pursuing such claim.
9. Confidential Information.
9.1 Confidentiality. The Executive will not, during or after the Term
of Employment, disclose any confidential information relating to the business
activities of the Bank or any Affiliate thereof which has not been previously
disclosed by any person to any person, firm, corporation, bank or other entity
for any reason or purpose whatsoever. Notwithstanding the foregoing, the
Executive may disclose any knowledge or other information relating to banking,
financing and/or economic principles, concepts or ideas which are based on
experience and which are not derived from the business plans and activities of
the Bank, and may disclose such confidential information in connection with
legal and/or regulatory proceedings.
9.2 Injunctive Relief. The Executive acknowledges and agrees that the
Bank will have no adequate remedy at law, and would be irreparably harmed, if
the Executive breaches or threatens to breach any of the provisions of this
Section 9 of this Agreement. The Executive agrees that the Bank shall be
entitled to equitable and/or injunctive relief to prevent any breach or
threatened breach of this Section 9, and to specific performance of each of the
terms of such Section in addition to any other legal or equitable remedies
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that the Bank may have. The Executive further agrees that he shall not, in any
equity proceeding relating to the enforcement of the terms of this Section 9,
raise the defense that the Bank has an adequate remedy at law.
9.3 Special Severability. The terms and provisions of this Section 9
are intended to be separate and divisible provisions and if, for any reason, any
one or more of them is held to be invalid or unenforceable, neither the validity
nor the enforceability of any other provision of this Agreement shall thereby be
affected.
10. Successors.
10.1 The Executive. This Agreement is personal to the Executive and,
without the prior express written consent of the Bank, shall not be assignable
by the Executive, except that the Executive's rights to receive any compensation
or benefits under this Agreement may be transferred or disposed of pursuant to
testamentary disposition, intestate succession or pursuant to a qualified
domestic relations order. This Agreement shall inure to the benefit of and be
enforceable by the Executive's heirs, beneficiaries and/or legal
representatives.
10.2 The Bank. This Agreement shall inure to the benefit of and be
binding upon the Bank and its successors and assigns; provided, however, that no
assignment of this Agreement may be made without the written consent of the
Executive.
11. Indemnification. The Executive (and his heirs, executors and
administrators) shall be indemnified and held harmless by the Bank to the
fullest extent permitted by applicable law, regulation, regulatory bulletin,
and/or any other regulatory requirement, as the same exists or may hereafter be
promulgated or amended, against all expense, liability and loss including,
without limitation, attorney's fees, judgments, fines, excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
the Executive as a consequence of the Executive being or having been made a
party to, or being or having been involved, in any threatened, pending or
completed actin, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the Executive is or was a trustee,
director or officer of the Bank or is or was serving at the request of the Bank
as a trustee, director or officer of another corporation (including, but not
limited to, a subsidiary or an Affiliate of the bank), and such indemnification
shall continue after the Executive shall cease to be an officer, director or
trustee. The right to indemnification conferred hereby shall be a contract right
and shall also include, to the extent permitted by applicable regulation, the
right to be paid by the Bank the expenses incurred in defending any such
proceeding in advance of the final disposition upon receipt by the Bank of an
undertaking by or on behalf of the Executive to repay such amount or a portion
hereof, if it shall ultimately be determined that the Executive is not entitled
to be indemnified by the Bank pursuant hereto or as otherwise authorized by law
but such repayment by the Executive shall only be in an amount ultimately
determined to exceed the amount to which the Executive was entitled to be
indemnified.
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12. Miscellaneous.
12.1 Applicable Law. This Agreement shall, to the extent not superseded
by federal law, be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts, without regard to principles of conflict of laws.
12.2 Amendments/Waiver. This Agreement may not be amended, waived, or
modified otherwise than by a written agreement executed by the parties to this
Agreement or their respective successors and legal representatives. No waiver by
any party to this Agreement of any breach of any term, provision or condition of
this Agreement of any breach of any term, provision or condition of this
Agreement by the other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same time, or any prior or subsequent time.
12.3 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given when received by hand-delivery to the other
party, by facsimile transmission, by overnight courier, or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: F. William Marshall, Jr.
87 Ely Road, Longmeadow, MA 01106
with a copy to:
If to the Bank: Springfield Institution for Savings
1441 Main Street, Springfield, MA 01103
Attention: Chairman- Board of Directors
with a copy to: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
12.4 Withholdings. The Bank may withhold from any amounts payable under
this Agreement such taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
12.5 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
12.6 Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
12.7 Entire Agreement. This Agreement contains the entire agreement
between the parties to this Agreement concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
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12.8 Representation. The Executive represents and warrants that the
performance of the Executive's duties and obligations under this Agreement will
not violate any agreement between the Executive and any other person, firm,
partnership, corporation, or organization.
12.9 Survivorship. The respective rights and obligations of the parties
to this Agreement, including, without limitation, any rights of the Executive
and the Bank under Section 11 of this Agreement, shall survive any termination
of this Agreement or the Executive's employment hereunder for any reason to the
extent necessary to the intended preservation of such rights and obligations.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and the Bank has caused this Amended and Restated Employment Agreement to be
executed in its name on its behalf, and its corporate seal to be hereunto
affixed and attested by its Secretary, all as of the Effective Date.
Attested: SPRINGFIELD INSTITUTION FOR SAVINGS
/Michael E. Tucker/ By: /Henry. J. McWhinnie/
Clerk/Secretary Name: Henry J. McWhinnie
(seal) Title: Senior Vice President-Human Resources
/F. William Marshall, Jr./
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