EXHIBIT 10.1(g)
SEVERANCE PAYMENT AGREEMENT
THIS AGREEMENT, dated December 21, 1989, between DERBY SAVINGS BANK
(the "Bank"), a Connecticut corporation having its office and principal place of
business in the City of Derby, County of New Haven, State of Connecticut, and
THOMAS H. WELLS, of the Town of Seymour, County of New Haven, State of
Connecticut (the "Employee").
WHEREAS, the Employee is currently serving as Senior Vice President -
Loans of the Bank;
WHEREAS, the Board of Directors of the Bank believes that it is in the
best interests of the Bank to encourage the Employee's continued employment with
and dedication to the Bank in the face of potentially distracting circumstances
arising from the possibility of a change in control of the Bank or its holding
company, DS Bancor, Inc. ("Bancor");
WHEREAS, the Board of Directors of the Bank has approved and
authorized the entry into this Agreement with the Employee; and
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the payment of special compensation to the Employee
in the event of a termination of the Employee's employment in connection with or
as a result of a change in control of the Bank or Bancor.
NOW, THEREFORE, it is AGREED as follows:
1. TERM. The initial term of its Agreement shall be for a one (1)
year period from the date hereof. This Agreement shall be automatically renewed
for one additional year on each anniversary date of this Agreement, unless the
Bank gives contrary written notice to the Employee prior to such anniversary
date. References herein to the term of this Agreement shall include the initial
term and any additional years for which this Agreement is renewed.
2. TERMINATION OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL.
(a) If during the term of this Agreement there is a change in control
of the Bank or Bancor, the Employee shall be entitled to receive as a severance
payment from the Bank for services previously rendered to the Bank a lump sum
cash payment as provided for herein (subject to Section 2(c) below) in the event
the Employee's employment is terminated, voluntarily or involuntarily, in
connection with or within two years after a change in control of the Bank or
Bancor, unless such termination occurs by virtue of a normal retirement,
permanent and total disability (as defined in Section 22(e) of the Internal
Revenue Code of 1986, as amended) or death. Subject to Section 2(c) below, the
amount of this payment shall be equal to three times the Employee's average
annual compensation which was payable by the Bank and was includible in the
Employee's gross income for federal income tax purposes with respect to the five
most recent taxable years of the Bank ending prior to such change in control of
the Bank or Bancor (or such portion of such period during which the Employee was
a full-time employee of the Bank), less one dollar. Payment under this Section
2(a) shall be in lieu of any amount which may be otherwise owed to the Employee
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EXHIBIT 10.1(g) (CONTINUED)
as damages for such termination. Payment under this Section 2(a) shall not be
reduced by any compensation which the Employee may receive from other employment
with another employer after termination of the Employee's employment with the
Bank. No payment hereunder shall affect the Employee's entitlement to any
vested retirement benefits or other compensation payments.
(b) A "change in control", for the purposes of this Agreement, shall
be deemed to have taken place if: (i) any person becomes the beneficial owner
of 20 percent or more of the total number of voting shares of Bancor; (ii) any
person becomes the beneficial owner of 10 percent or more (but less than 20
percent) of the total number of voting shares of Bancor; provided that, if the
Board of Governors of the Federal Reserve System ("FRB") has approved a rebuttal
agreement filed by such person, or such person has filed a certification with
the FRB, a change in control will not be deemed to have occurred unless the
Board of Directors of Bancor has made a determination that such beneficial
ownership constitutes or will constitute control of Bancor; (iii) any person
(other than the persons named as proxies solicited on behalf of the Board of
Directors of Bancor) holds revocable or irrevocable proxies, as to the election
or removal of two or more directors of Bancor, for 20 percent or more of the
total number of voting shares of Bancor; (iv) any person has received the
approval of the FRB under Section 3 of the Bank Holding Company Act of 1956, as
amended (the "Holding Company Act"), or regulations issued thereunder, to
acquire control of Bancor or the Bank; (v) any person has received approval of
the FRB under the Change in Bank Control Act of 1978 (the "Control Act"), or
regulations issued thereunder, to acquire control of Bancor; (vi) any person has
commenced a tender offer or exchange offer, or entered into an agreement or
received an option, to acquire beneficial ownership of 20 percent or more of the
total number of voting shares of Bancor, whether or not the requisite approval
for such acquisition has been received under the Holding Company Act, the
Control Act, or the respective regulations issued thereunder; or (vii) as the
result of, or in connection with, any cash tender or exchange offer, merger, or
other business combination, sale of assets or contested election, or any
combination of the foregoing transactions, the persons who were directors of
Bancor before such transaction shall cease to constitute at least two-thirds of
the Board of Directors of Bancor or any successor institution. For purposes of
this Section 2(b), a "person" includes an individual, corporation, partnership,
trust or group acting in concert. A person for these purposes shall be deemed
to be a beneficial owner as that term is used in Rule 13d-3 under the Securities
Exchange Act of 1934.
For purposes of this Agreement, a "change in Control" of the Bank
shall be deemed to have taken place if Bancor's beneficial ownership of the
total number of voting shares of the Bank is reduced to less than 50 percent.
(c) Notwithstanding any other provisions of this Agreement or of any
other agreement, contract, or understanding heretofore or hereafter entered into
between the Employee and the Bank, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this Section 2(c) (the "Other Agreements"), and notwithstanding
any formal or informal plan or other arrangement heretofore or hereafter adopted
by the Bank for the direct or indirect provision of compensation to the Employee
(including groups or classes of participants or beneficiaries of which the
Employee is a member), whether or not such compensation is deferred, is in cash,
or is in the form of a benefit to or for the Employee (a "Benefit Plan"), the
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EXHIBIT 10.1(g) (CONTINUED)
Employee shall not have any right to receive any payment or other benefit under
this Agreement, any Other Agreement, or any Benefit Plan if such payment or
benefit, taking into account all other payments or benefits to or for the
Employee under this Agreement, all Other Agreements, and all Benefit Plans would
cause any payment to the Employee under this Agreement to be considered a
"parachute payment" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended, (a "Parachute Payment"). In the event that
the receipt of any such payment or benefit under this Agreement, any Other
Agreement, or any Benefit Plan would cause the Employee to be considered to have
received a Parachute Payment under this Agreement, then the Employee shall have
the right, in the Employee's sole discretion, to designate those payments or
benefits under this Agreement, or Other Agreements, and/or any Benefit Plans,
which should be reduced or eliminated so as to avoid having the payment to the
Employee under this Agreement be deemed to be a Parachute Payment.
3. NO ASSIGNMENTS. This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other party hereto. However,
in the event of the death of the Employee, all rights to receive payments
hereunder shall become rights of the Employee's estate.
4. AMENDMENTS OR ADDITIONS; ACTION BY BOARD OF DIRECTORS. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties hereto. The prior approval by a two-thirds affirmative
vote of the full Board of Directors of the Bank shall be required in order for
the Bank to authorize any amendments or additions to this Agreement.
5. SECTION HEADINGS. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
6. GOVERNING LAW. This Agreement shall be governed by the laws of
the United States to the extent applicable and otherwise by the laws of the
State of Connecticut.
DERBY SAVINGS BANK
ATTEST: /S/ John F. Costigan BY: /S/ Harry P. DiAdamo Jr.
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John F. Costigan Harry P. DiAdamo Jr.
Secretary President
EMPLOYEE:
BY: /S/ Thomas H. Wells
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Thomas H. Wells
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