Exhibit 10.2
SPECIAL TERMINATION AGREEMENT
AGREEMENT made as of the 4th day of September, 1986 by and between
HIBERNIA SAVINGS BANK, a Massachusetts savings bank with its main office in
Boston, Massachusetts (the "Bank") and MARK A. OSBORNE, an individual
presently employed by the Bank in the capacity of President and Chief
Executive Officer (the "Executive").
1. PURPOSE. In order to allow the Executive to consider the prospect of
a Change in Control (as defined in Section 2) in an objective manner and in
consideration of the services rendered and to be rendered by the Executive to
the Bank and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Bank, the Bank is willing
to provide, subject to the terms of this Agreement, certain severance
benefits to protect the Executive from the consequences of a Terminating
Event (as defined in Section 3) occurring subsequent to a Change in Control.
2. CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred in either of the following events: (i) if there has occurred a
change in control which the Bank would be required to report in response to
Item 5(f) of the Form for Proxy Statement (Form F-5) prescribed by 12 CFR
Section 335.212 promulgated under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or, if such regulation is no longer in effect, any
regulations promulgated by the Federal Deposit
Insurance Corporation or by the Securities and Exchange Commission pursuant
to the 1934 Act which are intended to serve similar purposes or (ii) when any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the 1934
Act) becomes a "beneficial owner" (as such term is defined in Rule 13d-3
promulgated under the 1934 Act), directly or indirectly, of securities of the
Bank representing twenty-five percent or more of the total number of votes
that may be cast for the election of directors of the Bank and, in the case
of either (i) or (ii) above, the Bank's Board of Directors has not consented
to such event by a two-thirds vote of all of the members of the Board of
Directors adopted either prior to such event or within ninety days
thereafter, except that, if at the time such a consent vote is adopted after
such event the persons who were directors of the Bank immediately prior to
such event do not constitute a majority of the Board of Directors of the Bank
or of any successor institution, such vote shall not be deemed to constitute
consent for the purposes of this Agreement. In addition, a Change in Control
shall be deemed to have occurred if, as the result of, or in connection with,
any 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 the Bank before such
transaction shall cease to constitute a majority of the Board of Directors of
the Bank or of any successor institution. Notwithstanding the other
provisions of
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this Section, the sale of the Bank's stock in connection with its conversion
from mutual to stock form shall not constitute a Change in Control.
3. TERMINATING EVENT. A "Terminating Event" shall mean (a) termination
by the Bank of the employment of the Executive with the Bank for any reason
other than (i) death, (ii) deliberate dishonesty of the Executive with
respect to the Bank or any subsidiary or affiliate thereof or (iii)
conviction of the Executive of a crime involving moral turpitude or (b)
resignation of the Executive from the employ of the Bank, while the Executive
is not receiving payments or benefits from the Bank by reason of the
Executive's disability, subsequent to the occurrence of any of the following
events:
(i) A significant change in the nature or scope of the Executive's
responsibilities, authorities, powers, functions or duties from the
responsibilities, authorities, powers, functions or duties exercised
by the Executive immediately prior to the Change in Control; or
(ii) A reasonable determination by the Executive that, as a result of a
Change in Control, he is unable to exercise the responsibilities,
authorities, powers, functions or duties exercised by the Executive
immediately prior to such Change in Control; or
(iii) A decrease in the total annual compensation payable by the Bank to
the Executive other than as a result of a decrease in compensation payable
to the Executive and
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to all other executive officers of the Bank on the basis of the Bank's
financial performance.
4. SEVERANCE PAYMENT. In the event a Terminating Event occurs within
three years after a Change in Control, the Bank shall pay to the Executive an
amount equal to (3) three times the "base amount" (as defined in Section
280G(b)(3) of the Internal Revenue Code of 1954, as amended (the "Code"))
applicable to the Executive, less (y) One Dollar ($1.00), payable in one lump
sum payment on the date of termination.
5. EMPLOYMENT STATUS. This Agreement is not an agreement for the
employment of the Executive and shall confer no rights on the Executive
except as herein expressly provided.
6. TERM. Subject to the satisfaction of the conditions set forth in
Sections 15 and 16 hereof, this Agreement shall take effect one day prior to
the effective date of the conversion of the Bank from mutual to stock form of
Massachusetts savings bank, and shall terminate upon the earlier of (a) the
termination by the Bank of the employment of the Executive because of death,
deliberate dishonesty of the Executive with respect to the Bank or any
subsidiary or affiliate thereof or conviction of the Executive of a crime
involving moral turpitude, (b) the resignation or termination of the
Executive for any reason prior to a Change in Control or (c) the resignation
of the Executive after a Change in Control for any reason other than the
occurrence of any of the events enumerated in Section 3(b)(i)-(iii) of this
Agreement.
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7. WITHHOLDING. All payments made by the Bank under this Agreement shall
be net of any tax or other amounts required to be withhold by the Bank under
applicable law.
8. ARBITRATION OF DISPUTES. Any controversy or claim arising out of or
relating to this agreement or the breach thereof shall be settled by
arbitration in accordance with the laws of the Commonwealth of Massachusetts
by three arbitrators, one of whom shall be appointed by the Bank, one by the
Executive and the third by the first two arbitrators. If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the American Arbitration Association
in the City of Boston. Such arbitration shall be conducted in the City of
Boston in accordance with the rules of the American Arbitration Association,
except with respect to the selection of arbitrators which shall be as
provided in this Section 8. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In the
event that it shall be necessary or desirable for the Executive to retain
legal counsel and/or incur other costs and expenses in connection with the
enforcement of any or all of the Executive's rights under this Agreement, the
Bank shall pay (or the Executive shall be entitled to recover from the Bank,
as the case may be) the Executive's reasonable attorneys' fees and other
reasonable costs and expenses in connection with the enforcement of said
rights (including the enforcement of any
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arbitration award in court) regardless of the final outcome, unless and to
the extent the arbitrators shall determine that under the circumstances
recovery by the Executive of all or a part of any such fees and costs and
expense would be unjust.
9. ASSIGNMENT. Neither the Bank nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the Bank and the
Executive, their respective successors, executors, administrators, heirs and
permitted assigns. In the event of the Executive's death prior to the
completion by the Bank of all payments due him under this Agreement, the Bank
shall continue such payments to the Executive's beneficiary designated in
writing to the Bank prior to his death (or to his estate, if he fails to make
such designation).
10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of
such portion or provision in circumstances other than those as to which it is
so declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving
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party. The failure of either party to require the performance of any term or
obligation of this Agreement or the waiver by either party of any breach of
this Agreement shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach.
12. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and
delivered in person or sent by registered or certified mail, postage prepaid,
to the executive at the last address the Executive has filed in writing with
the Bank or, in the case of the Bank, at its main office, attention of the
Clerk.
13. ELECTION OF REMEDIES. An election by the Executive to resign after a
Change in Control under the provisions of this Agreement shall not constitute
a breach by the Executive of any employment agreement between the Bank and
the Executive and shall not be deemed a voluntary termination of employment
by the Executive for the purpose of interpreting the provisions of any of the
Banks' benefit plans, programs or policies. Nothing in this Agreement shall
be construed to limit the rights of the Executive under any employment
agreement that he may then have with the Bank.
14. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Bank.
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15. RATIFICATION OF AGREEMENT. This Agreement shall be submitted to the
full Board of Directors of the Bank for ratification at the first meeting of
the Board of Directors subsequent to the Bank's conversion.
16. GOVERNING LAW. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Bank, by its duly authorized officer and by the Executive,
as of the date first above written:
ATTEST: [Bank]
/s/ Thomas Johnson By: /s/ Thomasine Kennedy
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Clerk Title: Treasurer
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[Seal]
WITNESS:
/s/ Judith K. Wyman /s/ Mark A. Osborne
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MARK A. OSBORNE
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