EXHIBIT 10.3.1
EMPLOYMENT AGREEMENT
This Employment Agreement, dated as of March 1, 1994, is
between NORWALK SAVINGS SOCIETY, a mutual savings bank organized
and existing under the laws of the State of Connecticut with a
headquarters located in Norwalk, Connecticut (the "Bank"), and
JEREMIAH T. DORNEY of Wilton, Connecticut ("Executive").
RECITALS
Executive has worked for the Bank for approximately 31 years,
most recently as Senior Vice President and Secretary.
The Bank desires to enter into an Employment Agreement with
Executive for several primary reasons: (1) to provide Executive
with additional job security, particularly in the event that the
Bank experiences a change-of-control; (2) to provide further
incentive to Executive in the discharge of his responsibilities to
the Bank; (3) to further define Executive's duties and terms of
employment; and (4) to obtain certain contractual commitments from
Executive not present in the existing, at-will employment
arrangement.
The Executive desires to enter into an Employment Agreement
primarily to obtain contractual commitments from the Bank not
present in his existing, at-will employment arrangement.
The Bank and Executive contemplate that the Bank will: (i)
disclose to Executive information concerning the Bank's business
affairs, including certain confidential information; and (ii)
assist Executive in establishing good will and rapport with certain
customers of the Bank. The use by Executive of this information,
good will and rapport in competing with or in aiding others in
competing with the Bank would have a detrimental effect on future
profitable operations of the Bank.
NOW THEREFORE, in consideration of the mutual promises and
covenants hereinafter described, the parties agree as follows:
1. Term of Employment. The Bank agrees to employ Executive, and
Executive agrees to accept employment with the Bank for a
term commencing on March 1, 1994 and continuing for a period
of three (3) years, unless subsequently extended or sooner
terminated as provided in this Agreement (the "Employment
Period").
2. Duties.
(a) During the Employment Period, Executive shall perform the
duties and exercise the powers relating to the office of
Senior Vice President and Secretary (provided such
designations may change during the course of the
Employment Period) as the Bank shall from time to time
assign to him. All duties assigned shall be consistent
with the customary duties of persons exercising the
functions of the above-described offices at a
Connecticut-chartered savings bank, and, if the Bank
converts from mutual to capital stock form, at a capital
stock savings bank.
(b) During the Employment Period, Executive shall devote his
entire business time, best efforts and ability to the
business of the Bank, shall faithfully and diligently
perform his duties, shall comply in all material respects
with the overall policies established by the Board of
Directors of the Bank and shall do all that is reasonably
in his power to promote, develop and extend the business
of the Bank.
3. Compensation and Benefits.
(a) Salary. The Bank shall pay Executive as compensation
for his services during the Employment Period an annual
base salary of Eighty-Eight Thousand Six Hundred Dollars
($88,600.00). Salary payments shall be made in equal
increments consistent with the Bank's standard payroll
practices for its officers. The base annual salary shall
be reviewed by the Directors each year during the
Employment Period and set by the Directors in an amount
not less than the prior year's salary; any increase in
annual salary may take the form of a contingent increase
based upon achievement of articulated personal or
corporate goals, or both.
(b) Expenses. Upon submission of appropriate invoices or
vouchers, the Bank shall pay or reimburse Executive for
all reasonable expenses incurred by him in the
performance of his duties under this Agreement in
furthering the business, and in keeping with the
policies, of the Bank.
(c) Vacation. Executive shall be entitled to four (4) weeks
paid vacation each contract year, to be taken each year
at a time or times as shall be mutually agreed upon by
the Bank and Executive and consistent with applicable
regulatory requirements. If Executive fails to use all
of his vacation time during a particular calendar year,
the unused portion shall not be carried over to the
subsequent year nor shall he be paid additionally for
such unused time.
(d) Incentive Compensation. The Bank's Board of Directors,
in its sole discretion, may authorize the payment of cash
incentive compensation to Executive from time to time.
Payment of incentive compensation will not set a
precedent requiring or suggesting that similar incentive
compensation will be paid in the future.
(e) Insurance Policies
i. Term Life Insurance. During the Employment Period,
Bank shall provide term life insurance coverage for
Executive in such form and amount as is not less
favorable than that coverage provided by the Bank
to other Bank employees from time to time
generally.
ii. Key Man Insurance. During the Employment Period,
Executive shall permit the Bank to insure his life
under a policy or policies of life insurance issued
by an insurance company or companies selected by
the Bank, and to name the Bank as sole beneficiary
thereunder. Executive agrees to submit to any
physical examinations which may be reasonably
required in connection with such policies.
iii. Disability Insurance. During the Employment
Period, Bank shall provide Executive with
disability insurance coverage in such form and
amount consistent with that provided to other Bank
employees generally.
(f) Benefits. During the Employment Period, Executive shall
be entitled to and shall be included in any employee
welfare and retirement plan or program of the Bank
available generally to its employees and/or officers
including, without limitation, plans for hospital
services, medical services benefits, sick pay, dental and
other health plans.
(g) Stock Plans. During the Employment Period, Executive may
be included in any stock incentive or stock compensation
plan as the Board of Directors of the Bank may determine.
4. Disability. If during any period in which Executive shall
have continued to perform his duties as an employee of the
Bank, Executive shall incur a total or partial disability (as
defined in subparagraph (d) below), then until the earlier of
(a) 180 days after the date such disability is incurred, or
(b) the expiration of the term of the Employment Period
(either shall be termed the "Disability Period"), the Bank
shall pay Executive during the Disability Period on the basis
of his then-regular salary (any payments that Executive does
or would otherwise receive pursuant to the Bank's disability
coverage for employees generally for this period of disability
shall be set off against these payments).
(a) If Executive's total disability shall terminate prior to
the expiration of the Employment Period, then Executive
shall return to full and active employment with the Bank
under the terms of this Agreement; provided that if he
shall again become disabled within a period of three (3)
months after such return, other than by reason of an
event which is not causatively related to his original
disability, then Executive shall be deemed to have been
continuously disabled from the date he incurred his
original disability;
(b) In the event Executive shall incur a partial disability
(as defined in (d) below), then during the period of the
partial disability, the compensation to be paid to him in
consideration of his services to the Bank shall be
equitably adjusted to reflect the time that he is able to
devote to the affairs of and the value of the service he
is able to impart to the Bank; provided, however, that
during the Disability Period, the compensation shall not
be less than Executive would have received under this
Section 4 had he been totally rather than partially
disabled (this is to say, he shall receive his then-
regular salary for that Disability Period);
(c) Payments to Executive under this Section 4 shall be
reduced by the amounts, if any, as may be payable to him
by reason of his disability under policies of insurance
maintained and/or paid for by the Bank;
(d) As used in this Agreement, the term "total disability"
shall mean a disability such that, for physical or mental
reasons, Executive is unable to perform substantially his
obligations hereunder for the reasonably foreseeable
future (not less than 90 days), as determined by the
Bank's Board of Directors after considering competent
medical evidence. As used in this Agreement, the term
"partial disability" shall mean a disability, other than
a total disability, such that, for physical or mental
reasons, Executive is unable to perform a material
portion of his usual duties at the Bank on a full-time
basis. As determined by the Bank's Board of Directors
after considering competent medical evidence.
5. Termination.
(a) Termination by Death. If Executive dies during the
Employment Period, the Bank's obligations under this
Agreement shall terminate immediately and Executive's
estate shall be entitled to all arrearages of salary and
expenses but shall not be entitled to further
compensation.
(b) Termination With or Without Cause. This Agreement
and Executive's employment with the Bank may be terminated
for cause at any time upon thirty (30) days advance
written notice from the Bank to Executive, which notice
shall set forth the facts on which the termination is
based. Upon termination, Executive shall be entitled to
all arrearages of salary and expenses, but shall not be
entitled to further compensation or benefits. As used in
this Agreement, and without limitation, "cause" shall
include: (i) Executive's conviction by any trial court of
any crime involving fraud, embezzlement, theft or
dishonesty; (ii) serious willful misconduct by Executive,
including personal dishonesty in connection with Bank
business or customers or the breach of a fiduciary duty
to the Bank or its customers; (iii) the total disability
of Executive, as defined in Paragraph 4 above; (iv) any
material breach by Executive of this Agreement; or (v) if
the Bank's regulatory authorities issue an order removing
Executive from his positions at the Bank, or if such
regulatory authorities inform the Directors that
continuation of Executive in his position at the Bank
would constitute an unsafe and unsound banking practice.
Executive's employment may be terminated by the Bank
without cause at any time, provided that, in such event,
Bank shall pay Executive, in one lump-sum payment paid
within 30 days after such termination, an amount equal to
the higher of the following: (i) that amount which is
equal to the aggregate amount of salary payments that
would be made to Executive for the remainder of the
Employment Period, calculated at the Executive's then
annual base salary; or (ii) that amount which is equal to
the number of Executive's full years of service to the
Bank at the time of termination multiplied by a number
derived by dividing his then annual base salary by
twenty-six (26). In addition, if Executive is terminated
without cause, the Bank shall either continue to carry
Executive at no cost to him under the Bank's employee
hospital, medical services, dental and other health plans
for the remainder of the Employment Period, or, if he is
not eligible for continued coverage under such plans, pay
the cost of similar coverage for Executive pursuant to
COBRA or similar private insurance plans offering
comparable coverage. Also, if Executive is terminated
without cause, the Bank agrees to provide Executive, at
his request, with outplacement services for a period not
to exceed one year after the date of termination,
provided the Bank's obligation to provide these services
shall not exceed a maximum aggregate cost of $25,000.
Executive, should he elect to receive such services,
agrees to pursue possible employment opportunities
diligently and in good faith, and to cooperate in all
reasonable respects with the requests and instructions of
the outplacement services firm. A termination "without
cause" shall mean any termination not satisfying the
"cause" criteria specified in this Paragraph 5(b).
(c) Termination of the Old Arrangement. This Agreement shall
supersede any and all terms and conditions of Executive's
employment at the Bank that may be assertable by
Executive pursuant to previous documents, decisions of
the Board, custom and practice, or the like.
(d) Immediate Cessation of Employment. In the event
Executive's employment terminates pursuant to
subparagraph (b), the Bank may further direct Executive
to cease immediately his activities on behalf of the Bank
and to discontinue using any of the Bank's facilities;
provided, however, that in the event of these directions,
the Bank shall continue to provide Executive with salary
and other benefits required by this Agreement until the
expiration of the notice period set forth in sub-
paragraph (b).
(e) Survival. Anything in this Agreement to the contrary not
withstanding, the provisions of Paragraphs 6, 7, 8, 9 and
10 shall survive the termination of Executive's
employment with the Bank.
6. Non-Competition Agreement.
(a) Executive absolutely and unconditionally covenants and
agrees with the Bank that, from the period commencing on
the date of this Agreement and continuing for a period of
one (1) year following the termination of his employment
as provided for in this Agreement, Executive will not,
anywhere in the Restricted Area (as defined in
subparagraph (b) below), either directly or indirectly,
solely or jointly with any other person or persons (a
"Competitor"), as an employee, consultant, or advisor
(whether or not engaged in business for profit), or an
individual proprietor, partner, shareholder (provided
that share ownership of less than 5% of the share voting
power shall be permitted), director, officer, joint
venturer, investor (provided that such investment will
not be a violation if it is limited to less than 5% of
the ownership of such entity), lender, or in any other
capacity, compete with the business of the Bank (i) as
conducted as of the date of execution of this Agreement;
or (ii) as conducted during the Employment Period; or
(iii) as conducted as of the end of the Employment
Period; or (iv) as proposed to be conducted by the Bank
as of the end of the Employment Period (collectively, the
"Business").
(b) As used in this Section 6: (i) the term "compete" shall
mean engaging , participating, or being involved in any
respect in the business of banking, or furnishing any
aid, assistance or service of any kind to any person in
connection with, the Business; (ii) the term "Restricted
Area" shall refer to a Competitor which has its home
office in Norwalk, or which has a branch or other place
of business in Norwalk and where Executive is based or in
which he spends the majority of his office time.
(c) If a court or arbitration panel concludes through
appropriate proceedings that Executive has breached the
covenant set forth in this Section, the term of the
covenant shall be extended for a term equal to the period
for which Executive is determined to have breached the
covenant.
7. Covenant Not to Disclose. Executive agrees that, by virtue
of the performance of the normal duties of his position with
the Bank and by virtue of the relationship of trust and
confidence between Executive and the Bank, he possesses and
will possess certain data and knowledge of operations of the
Bank which are proprietary in nature and confidential.
Executive covenants and agrees that he will not, at any time,
whether during the term of this Agreement or otherwise,
reveal, divulge or make known to any person(other than the
Bank) or use for his own account, any confidential or
proprietary record, data, trade secret, price policy, rate
structure, personnel policy, method or practice of obtaining
or doing business by the Bank, or any other confidential or
proprietary information whatever (the "Confidential Information"),
whether or not obtained with the knowledge and
permission of the Bank and whether or not developed, devised
or otherwise created in whole or in part by his efforts.
Executive further covenants and agrees that he shall retain
all such knowledge and information which he shall acquire or
develop respecting such Confidential Information in trust for
the sole benefit of the Bank and its successors and assigns.
8. Non-Interference Covenant. Executive covenants and agrees
that he will not, for a period of one (1) year following the
termination of this Agreement, directly or indirectly, for
whatever reason, whether for his own account or for the
account of any other person, firm, corporation or other
organization: (i) solicit, employ, or otherwise interfere with
any of the Bank's contracts or relationships with any
employee, officer, director or any independent contractor who
is employed by or associated with the Bank at the time of
termination of this Agreement; or (ii) actively solicit, or
otherwise actively interfere with any of the Bank's contracts
or relationships with any independent contractor, customer,
client or supplier of the Bank.
9. Business Materials and Property Disclosure. All written
materials, records and documents made by Executive or coming
into his possession concerning the business or affairs of the
Bank shall be the sole property of the Bank and, upon termination
of his employment with the Bank, Executive shall deliver
the same to the Bank and shall retain no copies. Executive
shall also return to the Bank all other property in his
possession owned by the Bank upon termination of his
employment.
10. Breach by Executive. It is expressly understood, acknowledged
and agreed by Executive that (i) the restrictions contained in
Sections 6, 7, 8 and 9 of this Agreement represent a
reasonable and necessary protection of the legitimate
interests of the Bank and that his failure to observe and
comply with his covenants and agreements in those Sections
will cause irreparable harm to the Bank; (ii) it is and will
continue to be difficult to ascertain the nature, scope and
extent of the harm; and (iii) a remedy at law for such failure
by Executive will be inadequate. Accordingly, it is the
intention of the parties that, in addition to any other rights
and remedies which the Bank may have in the event of any
breach of said Sections, the Bank shall be entitled, and is
expressly and irrevocably authorized by Executive, to demand
and obtain specific performance, including without limitation,
temporary and permanent injunctive relief, and all other
appropriate equitable relief against Executive in order to
enforce against Executive, or in order to prevent any breach
or any threatened breach by Executive, of the covenants and
agreements contained in those Sections.
11. Change of Control. If during the Employment Period and
thereafter (provided the Executive is then a full-time officer
of the Bank) there is a "Change of Control" of the Bank, the
Executive shall be entitled to receive a severance payment in
consideration of services previously rendered to the Bank.
The severance payment shall be made as a lump sum cash payment
as provided for herein, unless the Executive and Bank enter
into a new employment agreement within two months after the
Change of Control. The amount of such severance payment shall
equal three (3) times the Executive's average annual
compensation which was payable by the Bank and was includible
in the Executive's gross income for federal income tax
purposes with respect to the five (5) most recent taxable
years ending before the date on which the Change of Control
occurs, less one dollar. Payment under this Section 11 shall
be in lieu of any amount due or payable to the Executive under
Sections 3 and 5. Payment under this Section 11 shall be
paid in full within 90 days following the date of the Change
of Control and shall not be reduced by any compensation which
the Executive may receive from other employment with another
employer after termination of the Executive's employment with
the Bank.
Notwithstanding any other provision of this Agreement or
of any other agreement, understanding or compensation plan,
Bank shall not pay, and Executive shall not receive, any
payment which would be deemed (taking into account all
payments, rights and benefits whether or not under this
Agreement) to be an "excess parachute payment" under Section
280G of the Internal Revenue Code of 1986, as amended, and the
amount of the payment hereunder shall be reduced to the extent
necessary to ensure that Executive receives no "parachute
payment" in connection with such Change of Control.
(a) "Change of Control" shall be deemed to have occurred if:
(1) a Person (as defined below) beneficially
owns (i.e. directly, indirectly or acting through
one or more other persons owns, controls or has
power to vote) 25% or more of any class of voting
securities of Bank;
(2) a Person controls in any manner the election of
more than 20% of the directors of Bank; or
(3) the Board of Directors of Bank determines that a
Person directly or indirectly exercises a
controlling influence over the management or
policies of Bank.
A "Change of Control" shall be deemed not to have
occurred if (A) such event is mandated or directed by a
regulatory body having jurisdiction over the Bank's
operations; or (B) it occurs pursuant to the terms of a plan
for the acquisition of the capital stock of the Bank by a
newly formed bank holding company if in the consummation of
such plan the shareholders of Bank will receive, pro rata, all
of the common stock of such bank holding company; unless, in
such conversion, a Person satisfies sub-paragraph (1), (2) or
(3) above.
A "Person" shall include a natural person, corporation,
or other entity. When two or more persons act as a
partnership, limited partnership, syndicate, or other group
for the purpose of acquiring, holding or disposing of Bank
capital stock, such partnership, syndicate or group shall be
considered a Person. Beneficial ownership shall be determined
under the then current provisions of Securities Exchange Act
Rule 13d-3; Reg. Section 240.13d-3, or their successor
provision(s).
This Section 11 shall survive and continue beyond the
term of employment set forth in Section 1 for as long as the
Executive is a full-time officer of the Bank.
12. Regulatory Restrictions. Notwithstanding any provision to the
contrary in this Agreement, the Bank shall not be required
under this Agreement to continue Executive in his position(s)
at the Bank, or to make any payments to Executive, if the
regulatory authorities having jurisdiction over the Bank order
the Executive's removal from the Bank, or if such regulations
determine that any payment would constitute an illegal "excess
parachute" payment under 12 U.S.C. Section 1828(k) and
regulations promulgated thereunder, or an "unsafe or unsound
banking practice" pursuant to 12 U.S.C. Section 1818(b).
13. Arbitration. Any dispute whatsoever relating to the
interpretation, validity or performance of this Agreement, or
any other dispute arising out of this Agreement which cannot
be resolved by any party upon thirty days' written notice to
the other party shall be settled by arbitration in the City of
Norwalk, Connecticut, in accordance with the rules then
prevailing of the American Arbitration Association, and the
judgment upon the award rendered by the arbitrators may be
entered in any court of competent jurisdiction. It is the
purpose of this Agreement, and the intent of the parties
hereto to make the submission to arbitration of any dispute or
controversy arising out of this Agreement, as set forth
hereinabove, an express condition precedent to any legal or
equitable action or proceeding of any nature whatsoever.
14. General Provisions.
(a) All notices required by this Agreement shall be in
writing and shall be sufficiently given if delivered or
mailed by registered or certified mail, return receipt
requested, to the parties at their respective addresses
set forth below. Any party may specify a different
address by written notice to the other, in accordance
with this Section. All notices shall be deemed to have
been given as of the date so delivered or mailed.
To the Bank
Norwalk Savings Society
48 Wall Street
Norwalk, CT 06852
To Executive:
Jeremiah T. Dorney
11 Blueberry Hill Place
Wilton, CT 06897
(b) Except insofar as Executive may be subject to general
policies adopted by the Bank from time to time, this
Agreement contains the entire agreement between the
parties, and there are no other representations,
warranties, conditions or agreements relating to the
subject matter of this Agreement.
(c) The waiver by any party of any breach or default of any
provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
(d) This Agreement may not be changed orally but only by an
agreement in writing duly executed on behalf of the party
against which enforcement of any waiver, change,
modification, consent or discharge is sought.
(e) This Agreement shall be binding upon and inure to the
benefit of the Bank and Executive and their respective
successors, assigns, heirs and legal representatives.
Insofar as Executive is concerned, this Agreement is
personal and Executive's duties under it shall not be
assigned by Executive.
(f) Each of the parties agrees to execute all further
instruments and documents and to take all further action
as the other party may reasonably request in order to
effectuate the terms and purposes of this Agreement.
(g) This Agreement may be executed in one or more
counterparts, all of which taken together shall
constitute one and the same instrument.
(h) This Agreement shall be construed pursuant to and in
accordance with the laws of the State of Connecticut.
(i) Wherever used in this Agreement, the masculine, feminine
and neuter pronouns shall be fully interchangeable, and
the singular shall include the plural where the context
so requires and vice versa.
(j) If any term or provision of this Agreement is held or
deemed to be invalid or unenforceable, in whole or in
part, by a court of competent jurisdiction, such term or
provision shall be ineffective to the extent of such
invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
NORWALK SAVINGS SOCIETY
By
Chairman of Board of Directors
EXECUTIVE
Jeremiah T. Dorney