BERKSHIRE HILLS BANCORP, INC.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made effective as of June
27, 2000 (the "Effective Time"), by and between Berkshire Hills Bancorp, Inc.
(the "Holding Company"), a corporation organized under the laws of Delaware,
with its principal offices at 24 North Street, Pittsfield, Massachusetts, 01202,
and Susan M. Santora ("Executive"). Any reference to the "Bank" herein shall
mean Berkshire Bank or any successor to Berkshire Bank.
WHEREAS, the Holding Company believes that the assurance of Executive's
employment by the Holding Company for the term of this Agreement and the benefit
of her business experience are of material importance; and
WHEREAS, Executive desires to serve in the employ of the Holding
Company on a full-time basis for the term of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties to this Agreement hereby agree as follows:
1. POSITIONS AND RESPONSIBILITIES
(a) During the term of this Agreement Executive agrees to serve as Executive
Vice President of the Holding Company. Executive shall render administrative and
management services to the Holding Company such as are customarily performed by
persons in a similar executive capacity. During the term of this Agreement,
Executive also agrees to serve, if appointed, as an officer of any subsidiary of
the Holding Company and in such capacity will carry out such duties and
responsibilities reasonably appropriate to that office.
(b) During the term of Executive's employment under this Agreement, except for
periods of absence occasioned by illness, vacation, and other reasonable leaves
of absence, Executive shall devote substantially all her business time,
attention, skill, and efforts to the faithful performance of her duties under
this Agreement, including activities and services related to the organization,
operation and management of the Holding Company and its subsidiaries, as well as
participation in community, professional and civic organizations; provided,
however, that, with the approval of the Board of Directors of the Holding
Company (the "Board of Directors"), as evidenced by a resolution of the Board of
Directors, from time to time, Executive may serve, or continue to serve, on the
boards of directors of, and hold any other offices or positions in, companies or
organizations, which, in the judgment of the Board of Directors, will not
present any conflict of interest with the Holding Company or its subsidiaries,
or materially affect the performance of Executive's duties pursuant to this
Agreement.
(c) Notwithstanding anything herein contained to the contrary, either
Executive or the Holding
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Company may terminate Executive's employment with the Holding Company at any
time during the term of this Agreement, subject to the terms and conditions of
this Agreement.
2. TERM OF EMPLOYMENT
Executive's employment under this Agreement shall be deemed to have commenced as
of the Effective Time and shall continue for a period of thirty-six (36) full
calendar months from the Effective Time. Commencing on the date of execution of
this Agreement, the term of this Agreement shall extend for one day each day
until such time as the Board of Directors or Executive elects not to extend the
term of the Agreement by giving written notice to the other party, in which case
the term of this Agreement shall become fixed and shall end on the third
anniversary of the date of such written notice.
3. COMPENSATION, BENEFITS AND REIMBURSEMENT
(a) Base Salary. The Holding Company shall pay Executive an annual salary of not
less than $125,510 ("Base Salary"). Executive's Base Salary shall be payable in
accordance with the normal payroll practices of the Holding Company. Whenever
used in this Agreement, Base Salary shall include any amounts of compensation
deferred by Executive under any tax-qualified retirement or welfare benefit plan
or any other deferred compensation arrangement maintained by the Holding Company
or the Bank. During the term of this Agreement, the Board of Directors or a
committee appointed by the Board of Directors shall review Executive's Base
Salary at least annually and the Board of Directors or the committee may
increase Executive's Base Salary at any time. Any increase in Executive's Base
Salary shall become a term of this Agreement and shall be the new "Base Salary"
for purposes of this Agreement.
(b) Incentive Compensation. In addition to her Base Salary, Executive shall be
entitled to participate in and shall receive payments under any incentive
compensation bonus program sponsored by the Holding Company or the Bank.
Executive's incentive compensation shall be determined by the Board of Directors
or a committee appointed by the Board of Directors at a level appropriate for
executive officers.
(c) Vacation; Holidays; Sick Time. Executive shall be entitled to vacation in
accordance with the standard vacation policies of the Holding Company or the
Bank for senior executive officers, but in no event less than four (4) weeks
vacation during each year of employment. Executive shall take vacation at a time
mutually agreed upon by the Holding Company or the Bank and Executive. Executive
shall receive her Base Salary and other benefits during periods of vacation.
Executive shall also be entitled to paid legal holidays in accordance with the
policies of the Holding Company or the Bank. Executive shall also be entitled to
sick leave in accordance with the policies of the Holding Company or the Bank
for senior executive officers, but in no event less than the number of days of
sick leave per year to which Executive was entitled at the Effective Time.
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(d) Other Employee Benefits. In addition to any other compensation or benefits
provided for under this Agreement, Executive shall be entitled to continue to
participate in any employee benefit plans, arrangements and perquisites of the
Holding Company or the Bank in which she participates or is eligible to
participate at the Effective Time. Executive shall also be entitled to
participate in any employee benefits or perquisites the Holding Company or the
Bank offers to full-time employees or executive management in the future. The
Holding Company or the Bank will not, without Executive's prior written consent,
make any changes in such plans, arrangements or perquisites which would
adversely affect Executive's rights or benefits thereunder without separately
providing for an arrangement that ensures Executive receives or will receive the
economic value that Executive would otherwise lose as a result of such adverse
effect, unless such change is general in nature and applies in a
nondiscriminatory manner to all employees covered by the plan, arrangement or
perquisite. Without limiting the generality of the foregoing provisions of this
paragraph, Executive shall be entitled to participate in or receive benefits
under all plans relating to stock options, restricted stock awards, stock
purchases, pension, profit sharing, employee stock ownership, group life
insurance, medical and other health and welfare coverage that are made available
by the Holding Company or the Bank at the Effective Time or at any time in the
future during the term of this Agreement, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Nothing paid to Executive under any such plans or arrangements
will be deemed to be in lieu of other compensation to which Executive is
entitled under this Agreement.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(a) Upon the occurrence of an Event of Termination (as defined herein below)
during Executive's term of employment under this Agreement, the provisions of
this Section 4 shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following: (i) the termination of
Executive's full-time employment under this Agreement by the Holding Company for
any reason other than a termination governed by Section 7 of this Agreement; or
(ii) Executive's resignation from her employment with the Holding Company upon,
any (A) failure to re-appoint Executive to her positions set forth in Section 1
of this Agreement, unless Executive consents to such event, (B) material change
in Executive's functions, duties, or responsibilities with the Holding Company
or its subsidiaries, which change would cause Executive's position(s) to become
one of lesser responsibility, importance, or scope, unless Executive consents to
such event, (C) relocation of Executive's principal place of employment by more
than twenty-five (25) miles from its location at the Effective Time, unless
Executive consents to such event, (D) material reduction (except to the extent
provided for in Section 3(d) of this Agreement) in the benefits and perquisites
provided to Executive from those being provided as of the Effective Time of this
Agreement, unless Executive consents to such event, (E) liquidation or
dissolution of the Holding Company or the Bank, or (F) breach of this Agreement
by the Holding Company. Upon the occurrence of any event described in clauses
(A), (B), (C), (D), (E) or (F), above, Executive shall have the right to
terminate her employment under this Agreement by resignation upon not less than
sixty (60) days prior written notice given within six (6) full calendar months
after the applicable event giving rise to Executive's right to elect to
terminate her employment.
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(b) Upon Executive's termination from employment in accordance with paragraph
(a) of this Section 4, on the Date of Termination, as defined in Section 8 of
the Agreement, the Holding Company shall be obligated to pay Executive, or, in
the event of her death following the Date of Termination, her beneficiary or
beneficiaries, or her estate, as the case may be, an amount equal to the sum of:
(i) the Base Salary and incentive compensation that would have been paid to
Executive for the remaining term of this Agreement had the Event of Termination
not occurred (based on Executive's then current Base Salary and most recently
paid or accrued bonus at the time of the Event of Termination); plus (ii) the
value, as calculated by a recognized firm customarily performing such valuation,
of any stock options which as of the Date of Termination, have been granted to
Executive but are not exercisable by Executive and the value of any restricted
stock awards which have been granted to Executive, but in which Executive does
not have a non-forfeitable or fully- vested interest as of the Date of
Termination; plus (iii) the value of all employee benefits that would have been
provided to Executive for the remaining term of this Agreement had an Event of
Termination not occurred, based on the most recent level of contribution,
accrual or other participation by or on behalf of Executive. At the election of
Executive, which election is to be made prior to the Date of Termination, such
payments shall be made in a lump sum. In the event that no election is made,
payment to Executive will be made on a monthly basis in approximately equal
installments during the remaining unexpired term of the Agreement. Such payments
shall not be reduced in the event Executive obtains other employment following
termination of employment.
(c) In addition to the payments provided for in paragraph (b) of this Section 4,
upon Executive's termination of employment in accordance with the provisions of
paragraph (a) of this Section 4, to the extent that the Holding Company or the
Bank continues to offer any life, medical, health, disability or dental
insurance plan or arrangement in which Executive participates in on the last day
of her employment (each being a "Welfare Plan"), Executive and her covered
dependents shall continue participating in such Welfare Plans, subject to the
same premium contributions on the part of Executive as were required immediately
prior to the Event of Termination until the earlier of (i) her death (ii) her
employment by another employer other than one of which she is the majority owner
or (iii) the end of the remaining term of this Agreement. If the Holding Company
or Bank does not offer the Welfare Plans at any time after the Event of
Termination, then the Holding Company shall provide Executive with a payment
equal to the premiums for such benefits for the period which runs until the
earlier of (i) her death (ii) her employment by another employer other than one
of which she is the majority owner or (iii) the end of the remaining term of
this Agreement.
5. CHANGE IN CONTROL
(a) For purposes of this Agreement, a "Change in Control" shall mean an event of
a nature that: (i) would be required to be reported in response to Item 1(a) of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
or (ii) results in a Change in Control of the Bank or the Holding Company within
the meaning of the Bank Change in Control Act and the Rules and Regulations
promulgated by the Federal Deposit Insurance Corporation ("FDIC") at 12 C.F.R.
ss. 303.4(a) with respect to the Bank and the Board of Governors of the Federal
Reserve System ("FRB") at 12 C.F.R. ss. 225.41(b)
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with respect to the Holding Company, as in effect on the date hereof; or (iii)
results in a transaction requiring prior FRB approval under the Bank Holding
Company Act of 1956 and the regulations promulgated thereunder by the FRB at 12
C.F.R. ss. 225.11, as in effect on the date hereof except for the Holding
Company's acquisition of the Bank; or (iv) without limitation such a Change in
Control shall be deemed to have occurred at such time as (A) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Bank or the Holding Company
representing 20% or more of the Bank's or the Holding Company's outstanding
securities except for any securities of the Bank purchased by the Holding
Company in connection with the conversion of the Bank to the stock form and any
securities purchased by any tax-qualified employee benefit plan of the Bank; or
(B) individuals who constitute the Board of Directors on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters (3/4) of
the directors comprising the Incumbent Board, or whose nomination for election
by the Holding Company's stockholders was approved by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes of this
clause (B), considered as though she were a member of the Incumbent Board; or
(C) a plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Bank or the Holding Company or similar
transaction occurs in which the Bank or Holding Company is not the resulting
entity; or (D) solicitations of shareholders of the Holding Company, by someone
other than the current management of the Holding Company, seeking stockholder
approval of a plan of reorganization, merger or consolidation of the Holding
Company or Bank or similar transaction with one or more corporations as a result
of which the outstanding shares of the class of securities then subject to the
plan or transaction are exchanged for or converted into cash or property or
securities not issued by the Bank or the Holding Company shall be distributed;
or (E) a tender offer is made for 20% or more of the voting securities of the
Bank or the Holding Company.
(b) If any of the events described in paragraph (a) of this Section 5,
constituting a Change in Control, have occurred or the Board of Directors
determines that a Change in Control has occurred, Executive shall be entitled to
the benefits provided in paragraphs (c), (d), (e), (f) and (g) of this Section 5
upon her termination of employment at any time during the term of this Agreement
on or after the date the Change in Control occurs due to (1) Executive's
dismissal or (2) Executive's resignation following any demotion, loss of title,
office or significant authority or responsibility, reduction in annual
compensation or benefits or relocation of her principal place of employment by
more than twenty-five (25) miles from its location immediately prior to the
Change in Control, unless such termination is because of her death or
Termination for Cause; provided, however, that such payments shall be reduced by
any payment made under Section 4 of this Agreement.
(c) Upon the occurrence of a Change in Control followed by Executive's
termination of employment, as provided in paragraph (b) of this Section 5, the
Holding Company shall pay Executive, or in the event of her subsequent death,
her beneficiary or beneficiaries, or her estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to the greater of: 1)
the payments and benefits due for the remaining term of the Agreement or 2)
three (3) times
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Executive's average annual compensation from the Holding Company, the Bank or
their affiliates for the five (5) preceding taxable years or such lesser number
of years in the event that Executive shall have actually been employed by the
Holding Company or the Bank for less than five (5) years. In determining
Executive's average annual compensation, annual compensation shall include Base
Salary and any other taxable income, including but not limited to amounts
related to the granting, vesting or exercise of restricted stock or stock option
awards, commissions, bonuses (whether paid or accrued for the applicable
period), as well as, severance payments, retirement benefits, director or
committee fees and fringe benefits paid or to be paid to Executive or paid for
Executive's benefit during any such year, profit sharing, employee stock
ownership plan and other retirement contributions or benefits, including to any
tax-qualified plan or arrangement (whether or not taxable) made or accrued on
behalf of Executive of such year. At the election of Executive, which election
is to be made prior to or within thirty (30) days of the Date of Termination on
or following a Change in Control, such payment may be made in a lump sum
(without discount for early payment) on or immediately following the Date of
Termination (which may be the date a Change in Control occurs) or paid in equal
monthly installments during the sixty (60) months following Executive's
termination. In the event that no election is made, payment to Executive will be
made on a monthly basis during the sixty (60) months following Executive's
termination.
(d) Upon the occurrence of a Change in Control, Executive will be entitled to
receive benefits due her under or contributed by the Bank or the Holding Company
on her behalf pursuant to any retirement, incentive, profit sharing or other
retirement, bonus, performance, disability or other employee benefit plan
maintained by the Holding Company or the Bank on Executive's behalf to the
extent such benefits are not otherwise paid to Executive under a separate
provision of this Agreement. In addition, for purposes of determining her vested
accrued benefit, Executive shall be credited either under any defined benefit
pension plan maintained by the Bank or, if not permitted under such plan, under
a separate arrangement, with the additional "years of service" that she would
have earned for vesting and benefit accrual purposes for the remaining term of
the Agreement had her employment not terminated.
(e) Upon the occurrence of a Change in Control and Executive's termination of
employment in connection therewith, the Holding Company will cause to be
continued life, medical and disability coverage substantially identical to the
coverage maintained by the Holding Company or the Bank for Executive and any of
her dependents covered under such plans prior to the Change in Control. Such
coverage and payments shall cease upon the expiration of thirty-six (36) full
calendar months following the Date of Termination. In the event Executive's
participation in any such plan or program is barred, the Holding Company shall
arrange to provide Executive and her dependents with benefits substantially
similar to those of which Executive and her dependents would otherwise have been
entitled to receive under such plans and programs from which their continued
participation is barred or provide their economic equivalent.
(f) The use or provision of any membership, license, automobile use, or other
perquisites shall be continued during the remaining term of the Agreement on the
same financial terms and obligations as were in place immediately prior to the
Change in Control. To the extent that any item
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referred to in this paragraph will, at the end of the term of this Agreement, no
longer be available to Executive, Executive will have the option to purchase all
rights then held by the Holding Company or the Bank to such item for a price
equal to the then fair market value of the item.
(g) In the event that Executive is receiving monthly payments pursuant to
Section 5(c) hereof, on an annual basis, thereafter, between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount payable under the Agreement at that time shall be paid in a lump
sum or on a pro rata basis pursuant to such section. Such election shall be
irrevocable for the year for which such election is made.
6. CHANGE IN CONTROL RELATED PROVISIONS
(a) Notwithstanding the preceding provisions of Section 5 of this Agreement, for
any taxable year in which Executive shall be liable for the payment of an excise
tax under Section 4999 of the Code (or any successor provision thereto), with
respect to any payment in the nature of the compensation made by the Holding
Company or its subsidiaries to (or for the benefit of) Executive pursuant to
this Agreement or otherwise, the Holding Company (or any successor thereto)
shall pay to Executive an amount determined under the following formula:
An amount equal to: (E x P) + X
WHERE:
X = E x P
-----------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E + M + PO]
E = the rate at which the excise tax is assessed under
Section 4999 of the Code;
P = the amount with respect to which such excise tax is
assessed, determined without regard to this Section
6;
FI = the highest marginal rate of federal income,
employment, and other taxes (other than taxes imposed
under Section 4999 of the Code) applicable to
Executive for the taxable year in question (including
any effective increase in Executive's tax rate
attributable to the disallowance of any deduction);
SLI = the sum of the highest marginal rates of income and
payroll tax applicable to Executive under applicable
state and local laws for the taxable year in question
(including any effective increase in Executive's tax
rate attributable to the disallowance of any
deduction);
M = highest marginal rate of Medicare tax; and
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PO = adjustment for phase out of or loss of deduction,
personal exemption or other similar items.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise tax under Section 4999 of the Code may or will be assessed,
the payment determined under this Section 6 shall be made to Executive on the
earliest of (i) the date the Holding Company is required to withhold such tax,
(ii) the date the tax is required to be paid by Executive, or (iii) at the time
of the Change in Control. It is the intention of the parties that the Holding
Company provide Executive with a full tax gross-up under the provisions of this
Section 6, so that on a net after-tax basis, the result to Executive shall be
the same as if the excise tax under Section 4999 (or any successor provisions)
of the Code had not been imposed. The payment may be adjusted, as appropriate,
if alternative minimum tax rules under the Code are applicable to Executive.
(b) Notwithstanding the foregoing, if it is (i) initially determined by the
Holding Company's tax advisors that no excise tax under Section 4999 is due with
respect to any payment or benefit described in the first paragraph of Section
6(a) and, thereafter, it is determined in a final judicial determination or a
final administrative settlement that the Section 4999 excise tax is due with
respect to such payments or benefits or (ii) subsequently determined in a final
judicial determination or a final administrative settlement to which Executive
is a party that the excise tax under Section 4999 is due or that the excess
parachute payment as defined in Section 4999 of the Code is more than the amount
determined as "P", above (such revised determination under (i) or (ii) above
being thereafter referred to as the "Determinative Excess Parachute Payment"),
then the tax advisors of the Holding Company (or any successor thereto) shall
determine the amount (the "Adjustment Amount"), the Holding Company (or its
successor) must pay to Executive, in order to put Executive in the same position
as Executive would have been if the amount determined as "P" above had been
equal to the Determinative Excess Parachute Payment. In determining the
Adjustment Amount, the tax advisors shall take into account any and all taxes
(including any penalties of any nature and interest) paid or payable by
Executive in connection with such final judicial determination or final
administrative settlement. As soon as practicable after the Adjustment Amount
has been so determined, the Holding Company shall pay the Adjustment Amount to
Executive.
(c) The Holding Company (or its successor) shall indemnify and hold Executive
harmless from any and all losses, costs and expenses (including without
limitation, reasonable attorney's fees, reasonable accountant's fees, interest,
fines and penalties of any kind) which Executive incurs as a result of any
administrative or judicial review of Executive's liability under Section 4999 of
the Code by the Internal Revenue Service or any comparable state agency through
and including a final judicial determination or final administrative settlement
of any dispute arising out of Executive's liability for the Section 4999 excise
tax or otherwise relating to the classification for purposes of Section 280G of
the Code of any payment or benefit in the nature of compensation made or
provided to Executive by the Holding Company or any successor thereto. Executive
shall promptly notify the Holding Company in writing whenever Executive receives
notice of the commencement of any judicial or administrative proceeding, formal
or informal, in which the federal tax treatment under
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Section 4999 of the Code of any amount paid or payable under this Supplemental
Agreement is being reviewed or is in dispute (including a notice of audit or
other inquiry concerning the reporting of Executive's liability under Section
4999). The Holding Company (or its successor) may assume control at its expense
over all legal and accounting matters pertaining to such federal or state tax
treatment (except to the extent necessary or appropriate for Executive to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable pursuant to this contract) and Executive shall cooperate fully with
the Holding Company in any such proceeding. Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Holding Company
(or its successor) may have in connection therewith without prior consent to the
Holding Company (or its successor). In the event that the Holding Company (or
any successor thereto) elects not to assume control over such matters, the
Holding Company (or any successor thereto) shall promptly reimburse Executive
for all expenses related thereto as and when incurred upon presentation of
appropriate documentation relating thereto.
7. TERMINATION FOR CAUSE
The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, willful misconduct, any breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses), final cease and desist order or material breach of any
provision of this Agreement. Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for cause unless and until there shall have
been delivered to her a Notice of Termination which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than three-fourths
(3/4) of the members of the Board of Directors at a meeting of the Board of
Directors called and held for that purpose (after reasonable notice to Executive
and an opportunity for her, together with counsel, to be heard before the Board
of Directors), finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. Executive shall not have the right to receive
compensation or other benefits for any period after Termination for Cause.
During the period beginning on the date of the Notice of Termination pursuant to
Section 8 hereof through the Date of Termination, stock options granted to
Executive under any stock option plan shall not be exercisable nor shall any
unvested awards granted to Executive under any stock benefit plan of the Bank,
the Holding Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination, such stock options and any such unvested awards shall become null
and void and shall not be exercisable by or delivered to Executive at any time
subsequent to such Termination for Cause.
8. NOTICE
(a) Any purported termination by the Holding Company or by Executive shall be
communicated by a Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which indicates
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated.
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(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).
(c) 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, except upon the occurrence of a
Change in Control and voluntary termination by Executive in which case the Date
of Termination shall be the date specified in the Notice, 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 (the
time for appeal therefrom having expired and no appeal having been perfected)
and provided further that the Date of Termination shall 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.
Notwithstanding the pendency of any such dispute, the Holding Company will
continue to pay Executive her full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary) and
continue her as a participant in all compensation, benefit and insurance plans
in which she was participating when the notice of dispute was given, until the
dispute is finally resolved in accordance with this Agreement. Amounts paid
under this Section 8 are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.
9. POST-TERMINATION OBLIGATIONS
All payments and benefits to Executive under this Agreement shall be subject to
Executive's compliance with this Section 9 for one (1) full year after the
earlier of the expiration of this Agreement or termination of Executive's
employment with the Holding Company. Executive shall, upon reasonable notice,
furnish such information and assistance to the Holding Company as may reasonably
be required by the Holding Company in connection with any litigation in which it
or any of its subsidiaries or affiliates is, or may become, a party.
10. NON-COMPETITION AND NON-DISCLOSURE
(a) Upon any termination of Executive's employment hereunder pursuant to Section
4 hereof, Executive agrees not to compete with the Holding Company or its
subsidiaries for a period of one (1) year following such termination in any
city, town or county in which Executive's normal business office is located and
the Holding Company or any of its subsidiaries has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board of Directors. Executive agrees that during such period
and within said cities, towns and counties, Executive shall not work for or
advise, consult or otherwise serve with, directly or indirectly, any entity
whose business materially competes with the depository, lending or other
business activities of the Holding Company or its subsidiaries. The parties
hereto, recognizing that irreparable injury will result to the Holding Company
or its subsidiaries, its business and property in the event of Executive's
breach
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of this Subsection 10(a) agree that in the event of any such breach by
Executive, the Holding Company or its subsidiaries, will be entitled, in
addition to any other remedies and damages available, to an injunction to
restrain the violation hereof by Executive, Executive's partners, agents,
servants, employees and all persons acting for or under the direction of
Executive. Executive represents and admits that in the event of the termination
of her employment pursuant to Section 4 of this Agreement, Executive's
experience and capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the Holding
Company or its subsidiaries, and that the enforcement of a remedy by way of
injunction will not prevent Executive from earning a livelihood. Nothing herein
will be construed as prohibiting the Holding Company or its subsidiaries from
pursuing any other remedies available to the Holding Company or its subsidiaries
for such breach or threatened breach, including the recovery of damages from
Executive.
(b) Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Holding Company and its
subsidiaries as it may exist from time to time, is a valuable, special and
unique asset of the business of the Holding Company and its subsidiaries.
Executive will not, during or after the term of her employment, disclose any
knowledge of the past, present, planned or considered business activities of the
Holding Company and subsidiaries thereof to any person, firm, corporation, or
other entity for any reason or purpose whatsoever unless expressly authorized by
the Board of Directors or required by law. Notwithstanding the foregoing,
Executive may disclose any knowledge of banking, financial and/or economic
principles, concepts or ideas which are not solely and exclusively derived from
the business plans and activities of the Holding Company. In the event of a
breach or threatened breach by Executive of the provisions of this Section 10,
the Holding Company will be entitled to an injunction restraining Executive from
disclosing, in whole or in part, the knowledge of the past, present, planned or
considered business activities of the Holding Company or its subsidiaries or
from rendering any services to any person, firm, corporation, other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be disclosed. Nothing herein will be construed as prohibiting the Holding
Company from pursuing any other remedies available to the Holding Company for
such breach or threatened breach, including the recovery of damages from
Executive.
11. DEATH AND DISABILITY
(a) Death. Notwithstanding any other provision of this Agreement to the
contrary, in the event of Executive's death during the term of this Agreement,
the Holding Company shall immediately pay her estate any salary and bonus
accrued but unpaid as of the date of her death, and, for a period of six (6)
months after Executive's death, the Holding Company shall continue to provide
medical insurance benefits existing on the date of her death and shall pay
Executive's designated beneficiary the Base Salary that would otherwise be
payable to her pursuant to Section 3 of this Agreement. This provision shall not
negate any rights Executive or her beneficiaries may have to death benefits
under any employee benefit plan of the Holding Company or the Bank.
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(b) Disability
(i) Disability. If during the term of Executive's employment Executive
begins to receive disability benefits under the long-term disability insurance
policy maintained by the Bank (the "Disability Policy"), then the Holding
Company's obligation to pay Executive her Base Salary shall, as of the date such
benefits first become payable under the Disability Policy on account of
Executive's disability, be reduced to equal the difference between Executive's
Base Salary and amounts received under all long-term disability policies, to the
extent that such salary payments do not result in a reduction in disability
payments.
(ii) Incapacity. If, as a result of Disability, Executive is determined
by a physician chosen by the Holding Company or the Bank and reasonably
acceptable to Executive or Executive's personal representatives not to be
capable of fulfilling Executive's responsibilities as an officer of the Holding
Company ("Incapacity Determination"), (1) Executive shall continue to be covered
by the Bank's medical insurance and life insurance policies until the third
anniversary of the Incapacity Determination, and (2) the Holding Company's or
the Bank's obligation to provide Executive with other employment-related fringe
benefits hereunder shall cease as of the date of such Incapacity Determination
("Incapacity Determination Date"). Prior to the Incapacity Determination Date,
the Holding Company shall continue to pay Executive her annual salary in usual
installments and Executive shall continue to receive all other
employment-related fringe benefits due to Executive in accordance with this
Agreement.
(iii) Termination of Employment by Reason of Incapacity. At any time
from and after the Incapacity Determination Date, the Board of Directors, in its
discretion, may elect to terminate Executive's employment by reason of such
incapacity. Any such termination as a result of incapacity shall be considered
to be an Event of Termination in accordance with Section 4 of this Agreement.
12. SOURCE OF PAYMENTS
(a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Holding Company or subject to Section 12(b).
(b) Notwithstanding any provision herein to the contrary, to the extent that
payments and benefits, as provided by this Agreement, are paid to or received by
Executive under an employment agreement in effect between Executive and the
Bank, such compensation payments and benefits paid by the Bank will be
subtracted from any amount due simultaneously to Executive under similar
provisions of this Agreement. Payments pursuant to this Agreement and the Bank
agreement shall be allocated in proportion to the level of activity and the time
expended on such activities by Executive as determined by the Holding Company
and the Bank.
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13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Holding Company or any
predecessor of the Holding Company and Executive, except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to her without reference to this Agreement.
14. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to affect any such action shall be null, void, and of
no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of, Executive
and the Holding Company and their respective successors and assigns.
15. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.
16. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall, to the full extent consistent with
law, continue in full force and effect.
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17. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware without
regard to principles of conflicts of law of that state.
19. ARBITRATION
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by Executive within fifty (50) miles
from the location of the Holding Company, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of her 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.
In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all
back-pay, including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under this Agreement.
20. PAYMENT OF COSTS AND LEGAL FEES
All reasonable costs and legal fees paid or incurred by Executive pursuant to
any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by the Holding Company, if Executive is successful with
respect to such dispute or question of interpretation pursuant to a legal
judgment, arbitration or settlement.
21. INDEMNIFICATION
(a) The Holding Company shall provide Executive (including her heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense and shall indemnify Executive (and her
heirs, executors and administrators) to the fullest extent permitted under
Delaware law against all expenses and liabilities reasonably incurred by her in
connection with or arising out of any action, suit or proceeding in which she
may be involved by reason of her having been a director or officer of the
Holding Company (whether or not she continues to be a director or officer at the
time of incurring such expenses or liabilities); such expenses and liabilities
to include, but not to be limited to, judgments, court costs and attorneys' fees
and the cost of reasonable settlements.
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(b) Any payments made to Executive pursuant to this Section 21 are subject to
and conditioned upon compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R.
Part 359 and any rules or regulations promulgated thereunder.
22. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Holding Company, to
expressly and unconditionally assume and agree to perform the Holding Company's
obligations under this Agreement, in the same manner and to the same extent that
the Holding Company would be required to perform such obligations if no such
succession or assignment had taken place.
SIGNATURES
IN WITNESS WHEREOF, Berkshire Hills Bancorp, Inc. has caused this
Agreement to be executed and its seal to be affixed hereunto by its duly
authorized officer and Executive has signed this Agreement, on the 16th day of
August, 2000.
ATTEST: BERKSHIRE HILLS BANCORP, INC.
/s/Rose A. Borotto By: /s/James A. Cunningham, Jr.
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Rose A. Borotto James A. Cunningham, Jr.
Corporate Secretary For the Entire Board of Directors
[SEAL]
WITNESS: EXECUTIVE
/s/Rose A. Borotto By: /s/Susan M. Santora
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Rose A. Borotto Susan M. Santora
Corporate Secretary
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