Exhibit 10.5
NEW ENGLAND BANCSHARES, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), by and
among NEW ENGLAND BANCSHARES, INC., a Maryland corporation (the "Company"), and
DAVID J. O'CONNOR ("Executive"), is hereby amended and restated effective as of
November 12, 2008. References to the "Association" herein shall mean ENFIELD
FEDERAL SAVINGS AND LOAN ASSOCIATION, a wholly owned subsidiary of the Company.
W I T N E S S E T H
WHEREAS, the Executive is currently employed as the President and Chief
Executive Officer of the Company pursuant to an employment agreement between the
Company and the Executive entered into as of December 28, 2005 (the "Original
Agreement");
WHEREAS, the Company desires to amend and restate the Original Agreement
in order to comply with the final regulations issued under Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code") in April 2007; and
WHEREAS, the Executive has agreed to such changes.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. Employment. Executive is employed as the President and Chief
Executive Officer of the Company. Executive shall perform all duties and shall
have all powers which are commonly incident to the offices of President and
Chief Executive Officer of the Company or which, consistent with those offices,
are delegated to him by the Board of Directors of the Company. During the term
of this Agreement, Executive also agrees to serve, if elected, as an officer
and/or director of any subsidiary of the Company and in such capacity carry out
such duties and responsibilities reasonably appropriate to that office.
2. Location and Facilities. The Executive will be furnished with the
working facilities and staff customary for executive officers with the title and
duties set forth in Section 1 and as are necessary for him to perform his
duties. The location of such facilities and staff shall be at the principal
administrative offices of the Company, or at such other site or sites customary
for such offices.
3. Term.
The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date written above and shall
continue for a period of thirty-six (36) full calendar months,
provided, however, that all changes intended to comply with Code
Section 409A shall be effective retroactively to December
28, 2005; and provided further, that no retroactive changes shall
affect the compensation or benefits previously provided to the
Executive. The term of this Agreement shall be extended for one day
each day so that a constant thirty-six (36) calendar month term
shall remain in effect, until such time as the Board of Directors of
the Company (the "Board") or Executive elects not to extend the term
of the Agreement by giving written notice to the other party in
accordance with the terms of this Agreement, in which case the term
of this Agreement shall be fixed and shall end on the third
anniversary of the date of such written notice.
4. Base Compensation.
a. The Company agrees to pay the Executive during the term of this
Agreement a base salary at the rate of $300,000 per year, payable in
accordance with customary payroll practices.
b. The Board shall review annually the rate of the Executive's base
salary based upon factors they deem relevant, and may maintain or
increase his salary, provided that no such action shall reduce the
rate of salary below the rate in effect on the Effective Date.
c. In the absence of action by the Board, the Executive shall continue
to receive salary at the annual rate specified on the Effective Date
or, if another rate has been established under the provisions of
this Section 4, the rate last properly established by action of the
Board under the provisions of this Section 4.
5. Bonuses. The Executive shall be entitled to participate in
discretionary bonuses or other incentive compensation programs that the Company
may award from time to time to senior management employees pursuant to bonus
plans or otherwise. Any bonuses or other payments made pursuant to this Section
5 shall be paid promptly by the Company and in any event no later than March 15
of the year immediately following the end of the calendar year for which such
amounts were payable.
6. Benefit Plans. The Executive shall be entitled to participate in
such life insurance, medical, dental, pension, profit sharing, retirement and
stock-based compensation plans and other programs and arrangements as may be
approved from time to time by the Company and the Company for the benefit of
their employees.
7. Vacation and Leave.
a. The Executive shall be entitled to vacation and other leave in
accordance with policy for senior executives, or otherwise as
approved by the Board.
b. In addition to paid vacation and other leave, the Executive shall be
entitled, without loss of pay, to absent himself voluntarily from
the performance of his
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employment for such additional periods of time and for such valid
and legitimate reasons as the Board may in its discretion determine.
Further, the Board may grant to the Executive a leave or leaves of
absence, with or without pay, at such time or times and upon such
terms and conditions as the Board in its discretion may determine.
8. Expense Payments and Reimbursements. The Executive shall be
reimbursed for all reasonable out-of-pocket business expenses that he shall
incur in connection with his services under this Agreement upon substantiation
of such expenses in accordance with applicable policies of the Company. Such
reimbursements shall be paid promptly by the Company and in any event not later
than March 15 of the year immediately following the end of the calendar year in
which the Executive incurred such expense.
9. Automobile Allowance. During the term of this Agreement, the
Executive shall be entitled to an automobile allowance on terms no less
favorable that those in effect immediately prior to the execution of this
Agreement. Executive shall comply with reasonable reporting and expense
limitations on the use of such automobile as may be established by the Company
or the Association from time to time, and the Company or the Association shall
annually include on Executive's Form W-2 any amount of income attributable to
Executive's personal use of such automobile. Payments, if any, made under this
Section 9 shall be paid promptly by the Company and in any event not later than
March 15 of the year immediately following the end of the calendar year in which
the expense was incurred.
10. Loyalty and Confidentiality.
a. During the term of this Agreement Executive: (i) shall devote all
his time, attention, skill, and efforts to the faithful performance
of his duties hereunder; provided, however, that from time to time,
Executive may serve on the boards of directors of, and hold any
other offices or positions in, companies or organizations which will
not present any conflict of interest with the Company or any of
their subsidiaries or affiliates, unfavorably affect the performance
of Executive's duties pursuant to this Agreement, or violate any
applicable statute or regulation and (ii) shall not engage in any
business or activity contrary to the business affairs or interests
of the Company.
b. Nothing contained in this Agreement shall prevent or limit
Executive's right to invest in the capital stock or other securities
of any business dissimilar from that of the Company, or, solely as a
passive, minority investor, in any business.
c. Executive agrees to maintain the confidentiality of any and all
information concerning the operation or financial status of the
Company and the Company; the names or addresses of any of its
borrowers, depositors and other customers; any information
concerning or obtained from such customers; and any other
information concerning the Company and the Company to which he may
be
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exposed during the course of his employment. The Executive further
agrees that, unless required by law or specifically permitted by the
Board in writing, he will not disclose to any person or entity,
either during or subsequent to his employment, any of the
above-mentioned information which is not generally known to the
public, nor shall he employ such information in any way other than
for the benefit of the Company and the Company.
11. Termination and Termination Pay. Subject to Section 12 of this
Agreement, Executive's employment under this Agreement may be terminated in the
following circumstances:
a. Death. Executive's employment under this Agreement shall terminate
upon his death during the term of this Agreement, in which event
Executive's estate shall be entitled to receive the compensation due
to the Executive through the last day of the calendar month in which
his death occurred.
b. Retirement. This Agreement shall be terminated upon Executive's
retirement under the retirement benefit plan or plans in which he
participates pursuant to Section 6 of this Agreement or otherwise.
c. Disability.
i. The Board or Executive may terminate Executive's employment
after having determined Executive has a Disability. For these
purposes, the Executive shall be deemed to have a "Disability"
in any case in which it is determined that the Executive (a)
is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last
for a continuous period of not less than 12 months; (b) by
reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last
for a continuous period of not less than 12 months, is
receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering
employees of the Bank; or (c) is totally disabled by the
Social Security Administration.
ii. In the event of such Disability, Executive's obligation to
perform services under this Agreement will terminate. The
Company or the Association will pay Executive, as Disability
pay, an amount equal to 100% of Executive's bi-weekly rate of
base salary in effect as of the date of his termination of
employment due to Disability. Disability payments will be made
on a monthly basis and will commence on the first day of the
month following the effective date of Executive's termination
of employment for Disability and end on the earlier of: (A)
the date he returns to full-time
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employment at the Company in the same capacity as he was
employed prior to his termination for Disability; (B) his
death; or (C) upon attainment of age 65. Such payments shall
be reduced by the amount of any short- or long-term disability
benefits payable to the Executive under any other disability
programs sponsored by the Company or the Association. In
addition, during any period of Executive's Disability,
Executive and his dependents shall, to the greatest extent
possible, continue to be covered under all benefit plans
(including, without limitation, non-taxable medical, dental
and life insurance plans) of the Company or the Association,
in which Executive participated prior to his Disability on the
same terms as if Executive were actively employed by the
Company.
d. Termination for Cause.
i. The Board may, by written notice to the Executive in the form
and manner specified in this paragraph, terminate his
employment at any time, for "Cause". The Executive shall have
no right to receive compensation or other benefits for any
period after termination for Cause. Termination for "Cause"
shall mean termination because of, in the good faith
determination of the Board, Executive's:
(1) Personal dishonesty;
(2) Incompetence;
(3) Willful misconduct;
(4) Breach of fiduciary duty involving personal profit;
(5) Intentional failure to perform stated duties;
(6) Willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) that
reflects adversely on the reputation of the Company and
the Company, any felony conviction, any violation of law
involving moral turpitude or any violation of a final
cease-and-desist order; or
(7) Material breach by Executive of any provision of this
Agreement.
ii. Notwithstanding the foregoing, Executive shall not be deemed
to have been terminated for Cause by the Company unless there
shall have been delivered to Executive a copy of a resolution
duly adopted at a meeting of such Board where in the good
faith opinion of the Board, Executive was
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guilty of the conduct described above and specifying the
particulars thereof.
e. Voluntary Termination by Executive. In addition to his other rights
to terminate under this Agreement, Executive may voluntarily
terminate employment during the term of this Agreement upon at least
sixty (60) days prior written notice to the Boards, in which case
Executive shall receive only his compensation, vested rights and
employee benefits up to the date of his termination.
f. Without Cause or With Good Reason.
i. In addition to termination pursuant to Sections 11(a) through
11(e) the Boards, may, by written notice to Executive,
immediately terminate his employment at any time for a reason
other than Cause (a termination "Without Cause") and Executive
may, by written notice to the Board, immediately terminate
this Agreement at any time for "Good Reason" as defined below.
ii. Subject to Section 12 of this Agreement, in the event of
termination under this Section 11(f), Executive shall be
entitled to receive an amount equal to (i) his base salary for
the remaining term of the Agreement, and (ii) the value of the
benefits he would have received during the remaining term of
the Agreement under any retirement programs (whether
tax-qualified or non-qualified) in which Executive
participated prior to his termination (with the amount of the
benefits determined by reference to the benefits received by
the Executive or accrued on his behalf under such programs
during the twelve (12) months preceding his termination),
payable as a single cash lump sum distribution within ten (10)
calendar days following such termination. In addition, the
Executive shall continue to participate in any benefit plans
of the Company or Association that provide life insurance and
non-taxable medical and dental insurance, or similar coverage
upon terms no less favorable than the most favorable terms
provided to senior executives of the Company during such
period. In the event that the Company or the Association is
unable to provide such coverage by reason of Executive no
longer being an employee, the Company shall pay the Executive
the value of such benefits in a single cash lump sum
distribution within ten (10) calendar days following his
termination.
iii. "Good Reason" shall exist if, without Executive's express
written consent, the Company materially breach any of their
respective obligations under this Agreement. Without
limitation, such a material breach shall be deemed to occur
upon any of the following:
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(1) A material reduction in Executive's responsibilities or
authority in connection with his employment with the
Company;
(2) Assignment to Executive of duties of a non-executive
nature or duties for which he is not reasonably equipped
by his skills and experience;
(3) Failure of the Executive to be nominated or re-nominated
to the Board
(4) A material reduction in Executive's salary or benefits
contrary to the terms of this Agreement, or, following a
Change in Control as defined in Section 12 of this
Agreement, any reduction in salary or material reduction
in benefits below the amounts to which he was entitled
prior to the Change in Control;
(5) Termination of incentive and benefit plans, programs or
arrangements, or reduction of Executive's participation
to such an extent as to materially reduce their
aggregate value below their aggregate value as of the
Effective Date;
(6) A requirement that Executive relocate his principal
business office or his principal place of residence
outside of the area consisting of a twenty-five (25)
mile radius from the current main office and any branch
of the Company, or the assignment to Executive of duties
that would reasonably require such a relocation; or
(7) Liquidation or dissolution of the Company or the
Company, other than liquidations or dissolutions that
are caused by reorganizations that do not negatively
affect the status of the Executive,
provided, however, that prior to any termination of employment
for Good Reason (a termination "With Good Reason"), the
Executive must first provide written notice to the Company
within ninety (90) days following the initial existence of the
condition, describing the existence of such condition, and the
Company shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Company
received the written notice from the Executive. If the Company
remedies the condition within such thirty (30) day cure
period, then no Good Reason shall be deemed to exist with
respect to such condition. If the Company does not remedy the
condition within such thirty (30) day cure period, then the
Executive may deliver a Notice of Termination for Good Reason
at any time within sixty (60) days following the expiration of
such cure period.
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iv. Notwithstanding the foregoing, a reduction or
elimination of the Executive's benefits under one or
more benefit plans maintained by the Company or the
Company as part of a good faith, overall reduction or
elimination of such plans or plans or benefits
thereunder applicably to all participants in a manner
that does not discriminate against Executive (except as
such discrimination may be necessary to comply with law)
shall not constitute an event of Good Reason or a
material breach of this Agreement, provided that
benefits of the type or to the general extent as those
offered under such plans prior to such reduction or
elimination are not available to other officers of the
Company or any company that controls the Company under a
plan or plans in or under which Executive is not
entitled to participate.
v. For purposes of this Agreement, any termination of
Executive's employment shall be construed to require a
"Separation from Service" in accordance with Code
Section 409A and the regulations promulgated thereunder,
such that the Company and Executive reasonably
anticipate that the level of bona fide services
Executive would perform after termination would
permanently decrease to a level that is less than 50% of
the average level of bona fide services performed
(whether as an employee or an independent contractor)
over the immediately preceding thirty-six (36) month
period.
g. Continuing Covenant Not to Compete or Interfere with
Relationships. Regardless of anything herein to the contrary,
following a termination by the Company or Executive pursuant
to Section 11(f):
i. Executive's obligations under Section 10(c) of this
Agreement will continue in effect; and
ii. During the period ending on the first anniversary of
such termination, the Executive shall not serve as an
officer, director or employee of any bank holding
company, bank, savings bank, savings and loan holding
company, or mortgage company (any of which, a "Financial
Institution") which Financial Institution offers
products or services competing with those offered by the
Company from any office within fifty (50) miles from the
main office or any branch of the Company and shall not
interfere with the relationship of the Company and the
Company and any of its employees, agents, or
representatives.
12. Termination in Connection with a Change in Control.
a. For purposes of this Agreement, a Change in Control means any of the
following events:
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(i) Merger: The Company merges into or consolidates with another
corporation, or merges another corporation into the Company,
and as a result less than a majority of the combined voting
power of the resulting corporation immediately after the
merger or consolidation is held by persons who were
stockholders of the Company immediately before the merger or
consolidation.
(ii) Acquisition of Significant Share Ownership: There is filed or
required to be filed a report on Schedule 13D or another form
or schedule (other than Schedule 13G) required under Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, if the
schedule discloses that the filing person or persons acting in
concert has or have become the beneficial owner of 25% or more
of a class of the Company's voting securities, but this clause
(b) shall not apply to beneficial ownership of Company voting
shares held in a fiduciary capacity by an entity of which the
Company directly or indirectly beneficially owns 50% or more
of its outstanding voting securities.
(iii) Change in Board Composition: During any period of two
consecutive years, individuals who constitute the Company's
Board of Directors at the beginning of the two-year period
cease for any reason to constitute at least a majority of the
Company's Board of Directors; provided, however, that for
purposes of this clause (iii), each director who is first
elected by the board (or first nominated by the board for
election by the stockholders) by a vote of at least two-thirds
(2/3) of the directors who were directors at the beginning of
the two-year period shall be deemed to have also been a
director at the beginning of such period; or
(iv) Sale of Assets: The Company sells to a third party all or
substantially all of its assets.
Notwithstanding anything in this Agreement to the contrary, in no event
shall reorganization of the Company from the mutual holding company form or
organization to the full stock holding company form of organization (including
the elimination of the mutual holding company) constitute a "Change in Control"
for purposes of this Agreement.
b. Termination. If within the period ending two (2) years after a
Change in Control, (i) the Company and the Company shall terminate
the Executive's employment Without Cause, or (ii) Executive
voluntarily terminates his employment With Good Reason, the Company
and the Company shall, within ten calendar days following the
termination of Executive's employment, make a single lump-sum cash
payment to him equal to three (3) times the Executive's average
Annual Compensation (as defined in this Section 12(b)) over the five
(5) most recently completed calendar years ending with the year
immediately preceding the effective date of the Change in Control.
In determining Executive's average Annual
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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, 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. The cash payment made under this Section
12(b) shall be made in lieu of any payment also required under
Section 11(f) of this Agreement because of a termination in such
period. Executive's rights under Section 11(f) are not otherwise
affected by this Section 12. Also, in such event, the Executive
shall, for a thirty-six (36) month period following his termination
of employment, receive the value of the benefits he would have
received over such period under any retirement programs (whether
tax-qualified or nonqualified) in which the Executive participated
prior to his termination (with the amount of the benefits determined
by reference to the benefits received by the Executive or accrued on
his behalf under such programs during the twelve (12) months
preceding the Change in Control), payable as a single cash lump sum
distribution within ten (10) calendar days following such
termination. In addition, the Executive shall continue to
participate in any benefit plans of the Company and the Company that
provide life insurance and non-taxable medical and dental insurance,
or similar coverage upon terms no less favorable than the most
favorable terms provided to senior executives of the Company during
such period. In the event that the Company and the Company are
unable to provide such coverage by reason of the Executive no longer
being an employee, the Company shall pay the Executive the value of
such benefits in a single lump sum within ten (10) calendar days
following his termination.
c. The provisions of Section 12 and Sections 14 through 25, including
the defined terms used is such sections, shall continue in effect
until the later of the expiration of this Agreement or two (2) years
following a Change in Control.
13. Indemnification and Liability Insurance. Subject to, and limited by
Section 27(b) of this Agreement, the Company shall provide the following:
a. Indemnification. The Company and the Company agree to indemnify the
Executive (and his heirs, executors, and administrators), and to
advance expenses related thereto, to the fullest extent permitted
under applicable law and regulations against any and all expenses
and liabilities reasonably incurred by him in
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connection with or arising out of any action, suit, or proceeding in
which he may be involved by reason of his having been a director or
Executive of the Company, the Company or any of their subsidiaries
(whether or not he continues to be a director or Executive at the
time of incurring any such expenses or liabilities) such expenses
and liabilities to include, but not be limited to, judgments, court
costs, and attorney's fees and the cost of reasonable settlements,
such settlements to be approved by the Board, if such action is
brought against the Executive in his capacity as an Executive or
director of the Company and the Company or any of their
subsidiaries. Indemnification for expense shall not extend to
matters for which the Executive has been terminated for Cause.
Nothing contained herein shall be deemed to provide indemnification
prohibited by applicable law or regulation. Notwithstanding anything
herein to the contrary, the obligations of this Section 13 shall
survive the term of this Agreement by a period of six (6) years.
b. Insurance. During the period in which indemnification of the
Executive is required under this Section, the Company and the
Company shall provide the Executive (and his heirs, executors, and
administrators) with coverage under a directors' and Executives'
liability policy at the expense of the Company and the Company, at
least equivalent to such coverage provided to directors and senior
Executives of the Company and the Company.
14. Reimbursement of Executive's Expenses to Enforce this Agreement. The
Company shall reimburse the Executive for all reasonable out-of-pocket expenses,
including, without limitation, reasonable attorney's fees, incurred by the
Executive in connection with successful enforcement by the Executive of the
obligations of the Company to the Executive under this Agreement. The Company
shall make such payments promptly and, in any event, not later than March 15 of
the year immediately following the year in which such expense was incurred by
Executive. Successful enforcement shall mean the grant of an award of money or
the requirement that the Company take some action specified by this Agreement:
(i) as a result of court order; or (ii) otherwise by the Company following an
initial failure of the Company to pay such money or take such action promptly
after written demand therefor from the Executive stating the reason that such
money or action was due under this Agreement at or prior to the time of such
demand.
15. Adjustment of Certain Payments and Benefits.
a. Tax Indemnification. Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall
be determined that any payment, benefit or distribution made or
provided by the Company or the Association to or for the benefit of
the Executive (whether made or provided pursuant to the terms of
this Agreement or otherwise) (each referred to herein as a
"Payment"), would be subject to the excise tax imposed by Section
4999 of the
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Internal Revenue Code of 1986, as amended (the "Code") or any
interest or penalties are incurred by the Executive with respect to
such excise tax (the excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that, after payment
by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
b. Determination of Gross-Up Payment. Subject to the provisions of
Section 15(c), all determinations required to be made under this
Section 15, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment and the assumptions to
be utilized in arriving at such determination, shall be made by a
certified public accounting firm or independent tax counsel
reasonably acceptable to the Company and the Association as may be
designated by the Executive (the "Consulting Firm") which shall
provide detailed supporting calculations to the Company, the
Association and the Executive within fifteen (15) business days of
the receipt of notice from the Executive that there has been or will
be a Payment, or such earlier time as is requested by the Company
and the Association. All fees and expenses of the Consulting Firm
shall be borne solely by the Company and the Association. Any
Gross-Up Payment, as determined pursuant to this Section 15, shall
be paid by the Company to the Executive at the same time a cash
payment is made pursuant to Section 12(b) of this Agreement. Any
determination by the Consulting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code, at the time of the initial
determination by the Consulting Firm hereunder, it is possible that
a Gross-Up Payment will not have been made by the Company and the
Association which should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In
the event that the Company and the Association exhaust their
remedies pursuant to Section 15(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Consulting Firm
shall determine the amount of the Underpayment that has occurred and
any such Underpayment shall be promptly paid by the Company or the
Association to or for the benefit of the Executive.
c. Treatment of Claims. The Executive shall notify the Company and the
Association in writing of any claim by the Internal Revenue Service
that, if successful, would require a Gross-Up Payment to be made.
Such notification shall be given as soon as practicable, but no
later than ten business days, after the Executive is informed in
writing of such claim and shall apprise the Company and
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the Association of the nature of such claim and the date on which
such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period
following the date on which it gives such notice to the Company and
the Association (or any shorter period ending on the date that
payment of taxes with respect to such claim is due). If the Company
or the Association notifies the Executive in writing prior to the
expiration of this period that it desires to contest such claim, the
Executive shall:
i. give the Company and the Association any information
reasonably requested by the Company and the Association
relating to such claim;
ii. take such action in connection with contesting such claim as
the Company and the Association shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company and the
Association;
iii. cooperate with the Company and the Association in good faith
in order to effectively contest such claim; and
iv. permit the Company and the Association to participate in any
proceedings relating to such claim; provided, however, that
the Company and the Association shall bear and pay directly
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and
indemnity and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or related taxes, interest or
penalties imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 15(c), the Company and
the Association shall control all proceedings taken in
connection with such contest and, at their option, may pursue
or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority with
respect to such claim and may, at their option, either direct
the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner. Further, the
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Company and the Association shall determine; provided,
however, that if the Company directs the Executive to pay such
claim and sue for a refund, the Company and the Association
shall advance the amount of such payment to the Executive, on
an interest-free basis (including interest or penalties with
respect thereto). Furthermore, the Company's and the
Association's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be
payable
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hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issues raised by the
Internal Revenue Service or any other taxing authority.
d. Adjustments to the Gross-Up Payment. If, after the receipt by
the Executive of an amount advanced by the Company pursuant to
Section 15(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall
(subject to the Company's compliance with the requirements of
Section 15(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon
after applicable taxes). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to
Section 15(c), a determination is made that the Executive
shall not be entitled to any refund with respect to such claim
and such denial of refund occurs prior to the expiration of
thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent
thereof, the amount of the Gross-Up Payment required to be
paid.
16. Injunctive Relief. If there is a breach or threatened breach of
Section 11(g) of this Agreement or the prohibitions upon disclosure contained in
Section 10(c) of this Agreement, the parties agree that there is no adequate
remedy at law for such breach, and that the Company shall be entitled to
injunctive relief restraining the Executive from such breach or threatened
breach, but such relief shall not be the exclusive remedy hereunder for such
breach. The parties hereto likewise agree that the Executive, without
limitation, shall be entitled to injunctive relief to enforce the obligations of
the Company under this Agreement.
17. Successors and Assigns.
a. This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Company which shall acquire,
directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the
Company and the Company.
b. Since the Company is contracting for the unique and personal skills
of Executive, Executive shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining
the written consent of the Company.
18. No Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment.
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19. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed to the Company at their principal business offices and to
Executive at his home address as maintained in the records of the Company.
20. No Plan Created by this Agreement. Executive and the Company
expressly declare and agree that this Agreement was negotiated among them and
that no provision or provisions of this Agreement are intended to, or shall be
deemed to, create any plan for purposes of the Employee Retirement Income
Security Act or any other law or regulation, and each party expressly waives any
right to assert the contrary. Any assertion in any judicial or administrative
filing, hearing, or process that such a plan was so created by this Agreement
shall be deemed a material breach of this Agreement by the party making such an
assertion.
21. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
22. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Connecticut shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
23. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
24. Headings. Headings contained herein are for convenience of reference
only.
25. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, other than written agreements with respect to specific plans, programs
or arrangements described in Sections 5 and 6. Upon execution of this Agreement,
the employment agreement entered into between the parties on June 4, 2002, will
become null and void.
26. Source of Payments. Notwithstanding any provision in this Agreement
to the contrary, to the extent payments and benefits, as provided for under this
Agreement, are paid or received by Executive under the Employment Agreement in
effect between Executive and the Association, the payments and benefits paid by
the Association will be subtracted from any amount or benefit due simultaneously
to Executive under similar provisions of this Agreement.
27. Required Provision. In the event any of the foregoing provisions of
this Section 27 are in conflict with the terms of this Agreement, this Section
27 shall prevail.
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a. The Company's board of directors may terminate Executive's
employment at any time, but any termination by the Company, other
than Termination for Cause, shall not prejudice Executive's right to
compensation or other benefits under this Agreement. Executive shall
not have the right to receive compensation or other benefits for any
period after Termination for Cause as defined in Section 11(d)
hereinabove.
b. Any payments made to employees pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with
12 U.S.C. ss.1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden
Parachute and Indemnification Payments.
c. Notwithstanding anything in this Agreement to the contrary, in the
event the Executive is a Specified Employee (as defined herein),
then, solely, to the extent required to avoid penalties under Code
Section 409A, the Executive's payments shall be delayed until the
first day of the seventh month following the Executive's Separation
from Service. A "Specified Employee" shall be interpreted to comply
with Code Section 409A and shall mean a key employee within the
meaning of Code Section 416(i) (without regard to paragraph 5
thereof).
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
Attest: NEW ENGLAND BANCSHARES, INC.
/s/ Nancy L. Grady By:/s/ Peter T. Dow
- -------------------------------- -----------------------------------
Chairman of the Board of Directors
Witness: EXECUTIVE
/s/ Nancy L. Grady /s/ David J. O'Connor
- -------------------------------- --------------------------------------
David J. O'Connor
President and Chief Executive Officer
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Revised (10 30 08).DOC
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