EXHIBIT 10.5
July 15,1998
Mr. David Glidden
48 Holy Family Road
Holyoke, MA 01040
Dear David:
SIS Bancorp, Inc. ("Bancorp") and Springfield Institution for Savings ("SIS")
are exploring various alternatives with respect to Bancorp and SIS, including a
merger or other combination with a third party. This letter sets forth the
understanding and agreement between you and SIS with respect to our respective
rights and obligations in connection with your continued employment and
cooperation in a potential reorganization involving SIS (a "Reorganization").
1. You agree to assist and cooperate fully with Bancorp and SIS in all
matters related to its efforts to consummate a Reorganization and perform all
tasks reasonably requested of you to support and help bring about such a
Reorganization. Furthermore, in recognition of SIS's desire that you make
yourself available for employment with SIS or any successor entity following the
completion of a Reorganization should it desire to retain your services, you
agree to review and consider in good faith employment offers (including the
continuation of your present terms of employment). if any, made by SIS or any
such successor entity following a Reorganization.
2. (a) In connection with the possible Reorganization, SIS will provide you
with severance consisting of twelve (12) months of your current monthly base
salary plus medical, dental and other nonretirement benefits if:
(i) you are terminated without cause as set forth in
paragraph 6 prior to the closing of such a Reorganization (the
"Closing");
(ii) you do not receive an offer of employment from SIS or
any successor entity at or about the time of Closing that
includes a base salary at least equal to the base salary received
from SIS as of the time of the Closing, and that provides you
with benefits reasonably comparable in the aggregate to your
current benefits ("Comparable Compensation");
(iii) you receive but do not accept an offer of employment
from SIS or any such successor entity at Comparable Compensation
because the location of the employment offered entailed an
additional commute from your current residence of more than forty
(40) miles; or
(iv) you accept a position with SIS or a successor entity
and are subsequently terminated without cause as defined in
paragraph 7 at any time after the Closing, or you are subjected
to a reduction of your base salary, or you are required to
relocate to a new
Mr. David Glidden
July 15, 1998
Page 2
employment location that will entail an additional commute
from your current residence of more than forty (40) miles.
(b) Severance shall be paid in a lump sum in the first month after the
occurrence of an event specified in subparagraph (a) above that
entitles you to severance payments.
3. You and your eligible dependents shall be eligible during the twelve (12)
months following your becoming entitled to severance payments hereunder to
participate in medical, dental and other nonretirement plans with no required
contribution from you other than contributions currently required from active
employees covered by such plans.
4. Prior to a public announcement concerning any Reorganization, you agree that
without the prior consent of SIS you will not disclose to any person or entity
(other than those individuals identified to you in writing as being active
participants in the Reorganization process) either the fact that discussions or
negotiations are taking place or have taken place regarding the Reorganization
or any of the terms, conditions or other facts relating to the possible
Reorganization, including the status thereof.
5. Nothing contained herein shall obligate SIS or any other party to offer you
continued employment or to provide you with any minimum level of compensation or
benefits.
6. SIS retains the right to terminate your employment prior to the Closing.
Unless terminated for reasons set forth in subparagraphs (a), (b) or (c) below
prior to Closing, including any termination as a result of a reduction in force,
you shall receive the severance benefits referenced in paragraph 2. In the event
of termination for cause as defined in subparagraphs (a), (b) and (c) below, you
shall not be entitled to the benefits referenced in paragraph 2. Reasons for
termination for cause are:
(a) failure to perform any of the material duties of your position,
including special projects and assignments; or
(b) breach of any material provision of SIS's standards of business
behavior and ethics; or
(c) serious misconduct in willful disregard of the interests of SIS.
7. The following conduct shall constitute "cause" for termination after Closing:
(a) repeated failure to perform any of the material duties of your
position, including special projects and assignments, provided reasonable
written notice and an opportunity to cure performance deficiencies has been
provided;
Mr. David Glidden
July 15,1998
Page 3
(b) breach of any material provision of SIS's or any successor entity's
standards of business behavior and ethics; or
(c) serious misconduct in willful disregard of SIS's or any successor
entity's interests.
8. Entire Agreement. This letter constitutes the entire agreement between the
parties and supersedes any prior communications, agreements or understandings,
whether oral or written, with respect to the terms of your continued employment.
9. Arbitration of Claims. The parties agree that any disputes arising during the
term of your employment with SIS, including but not limited to any claims
arising under the terms of this agreement, shall be subject to final and binding
arbitration as the sole and exclusive forum for dispute resolution. Arbitration
under this section shall be conducted pursuant to the rules of the American
Arbitration Association applicable to employment disputes. Either party may
request arbitration in writing pursuant to this section within six (6) months of
the event(s) giving rise to the dispute. Failure to request arbitration within
the time period shall forever bar any action in court or before any
administrative agency and shall be construed as an explicit waiver and release
of all claims as enumerated herein. Claims covered by this section include, but
are not limited to, claims for breach of contract, breach of the covenant of
good faith and fair dealing, tort claims, claims arising under common law,
claims for discrimination and claims for compensation or benefits under the
terms of this agreement. Any arbitration award issued under this section shall
extinguish all other rights of the parties with respect to the subject matter of
the dispute, whether grounded in contract, federal or state statutes, or common
law, and otherwise will be final and binding on the parties. Claims not covered
by this section are claims regarding your compensation other than pursuant to
this agreement, including but not limited to modification in compensation, the
amount and award of discretionary company bonuses and stock options, eligibility
for benefits under any company benefit plan covered by the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the amount of benefits
provided under a company benefit plan covered by ERISA, any claim cognizable
under ERISA, or any claims for workers' compensation or unemployment
compensation under a state workers' compensation or unemployment compensation
law.
10. Confidentiality. You agree to keep confidential this agreement and not to
disclose either the fact of the agreement or the terms thereof except where
necessary to members of your immediate family, tax or legal advisors, and as
required in response to a valid subpoena or court order. Failure to comply with
the provisions of this paragraph 10 will be deemed a material breach of the
agreement and may result in forfeiture of the payments and benefits provided
herein.
11. Amendment and Termination. SIS reserves the right to amend or terminate this
agreement at any time, provided that no such amendment or termination may be
made after the Closing without your consent.
Mr. David Glidden
July 15,1998
Page 4
If you are in agreement with the foregoing, please sign, date and
return the enclosed copy of this letter to the undersigned, whereupon it shall
become a binding agreement between us.
Very truly yours,
SPRINGFIELD INSTITUTION FOR SAVINGS
By: /s/ F. William Marshall, Jr.
(Signature)
AGREED AND ACCEPTED:
/s/ David Glidden Date: 7/17/98
Name: David Glidden