Exhibit 10.11
EXECUTION COPY
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("the Agreement") is made
and entered into as of October 23, 2007 (the "Effective Date") by and between
WESTFIELD FINANCIAL, INC., a business corporation organized and existing under
the laws of the Commonwealth of Massachusetts and having an office at 141 Elm
Street, Westfield, Massachusetts 01085 (the "Company") and MICHAEL J. JANOSCO,
JR., an individual residing at 41 Wilder Road, Sterling, Massachusetts 01564
(the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive currently serves as Chief Financial Officer of the
Company, the holding company for Westfield Bank (the "Bank");
WHEREAS, the Company desires to assure for itself the continued
availability of the Executive's services as provided in this Agreement and the
ability of the Executive to perform such services with a minimum of personal
distraction in the event of a pending or threatened Change of Control (as
hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the Company on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Company and the Executive hereby
agree as follows:
Section 1. Employment.
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The Company agrees to continue to employ the Executive, and the Executive
hereby agrees to such continued employment, during the period and upon the
terms and conditions set forth in this Agreement.
Section 2. Employment Period; Remaining Unexpired Employment Period.
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(a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this section 2
("Employment Period"). The Employment Period shall be for an initial term of
three (3) years beginning on the Effective Date and ending on the third
anniversary date of this Agreement (each, an "Anniversary Date"), plus such
extensions, if any, as are provided pursuant to section 2(b).
(b) Except as provided in section 2(c) and subject to section 11(b),
beginning on the Effective Date, the Employment Period shall automatically be
extended for one (1) additional day each day, unless either the Company or the
Executive elects not to extend the Agreement further by giving written notice
thereof to the other party, in which case the Employment Period shall end on
the third anniversary of the date on which such written notice is given. For
all purposes of this Agreement, the term "Remaining Unexpired Employment
Period" as of any date shall mean the period beginning on such date and ending
on the last day of the Employment Period taking into account any extensions
under this section 2(b). Upon termination of the Executive's employment with
the Company for any reason whatsoever, any
daily extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the Company at
any time from terminating the Executive's employment during the Employment
Period with or without notice for any reason; provided, however, that the
relative rights and obligations of the Company and the Executive in the event
of any such termination shall be determined under this Agreement.
Section 3. Duties.
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The Executive shall serve as Chief Financial Officer of the Company,
having such power, authority and responsibility and performing such duties as
are prescribed by or under the By-Laws of the Company and as are customarily
associated with such position. Subject to Section 7 of this Agreement, the
Executive shall devote his full business time and attention (other than during
weekends, holidays, approved vacation periods, and periods of illness or
approved leaves of absence) to the business and affairs of the Company and
shall use his best efforts to advance the interests of the Company.
Section 4. Cash Compensation.
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In consideration for the services to be rendered by the Executive
hereunder, the Company shall continue to pay to him a salary at an annual rate
of $211,484, payable in approximately equal installments in accordance
with the Company's customary payroll practices for senior officers. The Board
of Directors of the Company ("Board") shall review the Executive's annual rate
of salary at such times during the Employment Period as it deems appropriate,
but not less frequently than once every twelve (12) months, and may, in its
discretion, approve an increase therein. In addition to salary, the Executive
may receive other cash compensation from the Company for services hereunder at
such times, in such amounts and on such terms and conditions as the Board may
determine from time to time.
Section 5. Employee Benefit Plans and Programs.
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During the Employment Period, the Executive shall be treated as an
employee of the Company and shall be entitled to participate in and receive
benefits under any and all qualified or non-qualified retirement, pension,
savings, profit-sharing or stock bonus plans, any and all group life, health
(including hospitalization, medical and major medical), dental, accident and
long term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Company in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and consistent
with the Company's customary practices.
Section 6. Indemnification and Insurance.
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(a) During the Employment Period and for a period of six (6) years
thereafter, the Company shall cause the Executive to be covered by and named as
an insured under any policy or contract of insurance obtained by it to insure
its directors and officers against personal
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liability for acts or omissions in connection with service as an officer or
director of the Company or service in other capacities at the request of the
Company. The coverage provided to the Executive pursuant to this section 6
shall be of the same scope and on the same terms and conditions as the coverage
(if any) provided to other officers or directors of the Company.
(b) To the maximum extent permitted under applicable law, during the
Employment Period and for a period of six (6) years thereafter, the Company
shall indemnify the Executive against and hold him harmless from any costs,
damages, losses and exposures arising out of a bona fide action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Company to the fullest extent and on the most favorable terms
and conditions that similar indemnification is offered to any director or
officer of the Company or any subsidiary or affiliate thereof.
(c) The Executive, the Company and the Bank agree that the termination
benefits described in this Section 6 are intended to be exempt from Section
409A of the Internal Revenue Code ("Section 409A") pursuant to Treasury
Regulation Section 1.409A-1(b)(10) as certain indemnification and liability
insurance plans.
Section 7. Outside Activities.
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The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided, however, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Company and generally applicable
to all similarly situated executives. The Executive may also serve as an
officer or director of the Bank on such terms and conditions as the Company and
the Bank may mutually agree upon, and such service shall not be deemed to
materially interfere with the Executive's performance of his duties hereunder
or otherwise result in a material breach of this Agreement. If the Executive is
discharged or suspended, or is subject to any regulatory prohibition or
restriction with respect to participation in the affairs of the Bank, he shall
continue to perform services for the Company in accordance with this Agreement
but shall not directly or indirectly provide services to or participate in the
affairs of the Bank in a manner inconsistent with the terms of such discharge
or suspension or any applicable regulatory order.
Section 8. Working Facilities and Expenses.
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The Executive's principal place of employment shall be at the Company's
executive offices at the address first above written or at such other location
as the Company and the executive may mutually agree upon. The Company shall
provide the Executive at his principal place of employment with a private
office, secretarial services and other support services and facilities suitable
to his position with the Company and necessary or appropriate in connection
with the performance of his assigned duties under this Agreement. The Company
shall provide to the Executive for his exclusive use an automobile owned or
leased by the Company and appropriate to his position, to be used in the
performance of his duties hereunder, including commuting to and from his
personal residence. The Company shall reimburse the
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Executive for his ordinary and necessary business expenses, including, without
limitation, all expenses associated with his business use of the aforementioned
automobile, fees for memberships in such clubs and organizations as the
Executive and the Company shall mutually agree are necessary and appropriate
for business purposes, and his travel and entertainment expenses incurred in
connection with the performance of his duties under this Agreement, in each
case upon presentation to the Company of an itemized account of such expenses
in such form as the Company may reasonably require.
Section 9. Termination of Employment with Severance Benefits.
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(a) The Executive shall be entitled to the severance benefits described
in section 9(b) in the event that:
(i) his employment with the Company terminates during the
Employment Period as a result of the Executive's voluntary resignation
within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint or
elect or re-elect the Executive to the position with the Company
stated in section 3 of this Agreement;
(B) if the Executive is a member of the Board, the failure of
the shareholders of the Company to elect or re-elect the Executive
to the Board or the failure of the Board (or the nominating
committee thereof) to nominate the Executive for such election or
re-election;
(C) the expiration of a thirty (30)-day period following the
date on which the Executive gives written notice to the Company of
its material failure, whether by amendment of the Company's
Certificate of Incorporation, the Company's By-Laws, action of the
Board or the Company's shareholders or otherwise, to vest in the
Executive the functions, duties, or responsibilities prescribed in
section 3 of this Agreement, unless, during such thirty (30)-day
period, the Company cures such failure;
(D) the expiration of a thirty (30)-day period following the
date on which the Executive gives written notice to the Company of
its material breach of any term, condition or covenant contained in
this Agreement (including, without limitation any reduction of the
Executive's rate of base salary in effect from time to time and any
change in the terms and conditions of any compensation or benefit
program in which the Executive participates which, either
individually or together with other changes, has a material adverse
effect on the aggregate value of his total compensation package),
unless, during such thirty (30)-day period, the Company cures such
failure;
(E) a change in the Executive's principal place of employment
to a place that is not the principal executive office of the Bank,
or a relocation of the Bank's principal executive office to a
location that is both more than twenty-five (25) miles away from
the Executive's principal residence and more than twenty-
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five (25) miles away from the location of the Bank's principal
executive office on the date of this Agreement; or
(F) any material breach by the Company of any material term,
condition or covenant contained in this Agreement; provided,
however, that the Executive shall have given notice of such
materials adverse effect to the Company, and the Company has not
fully cured such failure within thirty (30) days after such notice
is deemed given; or
(ii) the Executive's employment with the Company is terminated by
the Company for any reason other than for "cause" as provided in section
11(a).
(b) Upon the occurrence of any of the events described in section 9(a) of
this Agreement, the Company shall pay and provide to the Executive (or, in the
event of his death thereafter and prior to payment, to his estate):
(i) his earned but unpaid salary (including, without limitation,
all items which constitute wages under applicable law and the payment of
which is not otherwise provided for in this section 9(b)) as of the date
of the termination of his employment with the Company and the Bank, such
payment to be made at the time and in the manner prescribed by law
applicable to the payment of wages but in no event later than thirty (30)
days after termination of employment as defined in Treasury Regulation
Section 1.409A-1(h)(1)(ii);
(ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation
plans and programs maintained for the benefit of the Company's and the
Bank's officers and employees;
(iii) continued group life, health (including hospitalization,
medical and major medical), dental, accident and long-term disability
insurance benefits on substantially the same terms and conditions
(including any required premium-sharing arrangements, co-payments and
deductibles) in effect for them immediately prior to the Executive's
termination for the Remaining Unexpired Employment Period for the
Executive and his dependents. The coverage provided under this section
9(b)(iii) may, at the election of the Company, be secondary to the
coverage provided pursuant to section 9(b)(ii) and to any employer-paid
coverage provided by a subsequent employer or through Medicare, with the
result that benefits under the other coverages will offset the coverage
required by this section 9(b)(iii). The Executive, the Company and the
Bank agree that the termination benefits described in this Section
9(b)(iii) are intended to be exempt from Section 409A pursuant to
Treasury Regulation Section 1.409A-1(b)(1) as non-taxable benefits;
(iv) a lump sum payment in an amount equal to the estimated present
value of the salary that the Executive would have earned if he had
continued working for the Company and the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of salary achieved
during the period of three (3) years ending immediately prior to the date
of termination (the "Salary Severance Payment"). The Salary Severance
Payment shall be computed using the following formula:
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n (BS/PR)
SSP=3 [-------------------------------]
1 n
[1 + (I / PR)]
where "SSP" is the amount of the Salary Severance Payment (before the
deduction of applicable federal, state and local withholding taxes); "BS"
is the highest annual rate of salary achieved by the Executive during the
period of three (3) years ending immediately prior to the date of
termination; "PR" is the number of payroll periods that occur during a
year under the Company's normal payroll practices; "I" equals the
applicable federal short term rate established under section 1274 of the
Internal Revenue Code of 1986 (the "Code") for the month in which the
Executive's termination of employment occurs (the "Short Term AFR") and
"n" equals the product of the Remaining Unexpired Employment Period at
the Executive's termination of employment (expressed in years and
fractions of years) multiplied by the number of payroll periods that
occur during a year under the Company's and the Bank's normal payroll
practices. The Salary Severance Payment shall be made within five (5)
business days after the Executive's termination of employment and shall
be in lieu of any claim to a continuation of base salary which the
Executive might otherwise have and in lieu of cash severance benefits
under any severance benefits program which may be in effect for officers
or employees of the Bank or the Company;
(v) a lump sum payment in an amount equal to the estimated present
value of the annual bonuses that the Executive would have earned if he
had continued working for the Company and the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of salary achieved
during the period of three (3) years ending immediately prior to the date
of termination (the "Bonus Severance Payment"). The Bonus Severance
Payment shall be computed using the following formula:
BSP = SSP x (ABP / ASP)
where "BSP" is the amount of the Bonus Severance Payment (before the
deduction of applicable federal, state and local withholding taxes);
"SSP" is the amount of the Salary Severance Payment (before the deduction
of applicable federal, state and local withholding taxes); "BP" is the
aggregate of the annual bonuses paid or declared (whether or not paid)
for the most recent period of three (3) calendar years to end on or
before the Executive's termination of employment; and "SP" is the
aggregate base salary actually paid to the Executive during such period
of three (3) calendar years (excluding any year for which no bonus was
declared or paid). The Bonus Severance Payment shall be made within five
(5) business days after the Executive's termination of employment and
shall be in lieu of any claim to a continuation of participation in
annual bonus plans of the Bank or the Company which the Executive might
otherwise have;
(vi) a lump sum payment in an amount equal to the estimated present
value of the long-term incentive bonuses that the Executive would have
earned if he had continued working for the Company and the Bank during
the Remaining Unexpired Employment Period (the "Incentive Severance
Payment"). The Incentive Severance Payment shall be computed using the
following formula:
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ISP = (SSP / RUP) x (ALTIP / ALTSP) x Y
where "ISP" is the amount of the Incentive Severance Payment (before the
deduction of applicable federal, state and local withholding taxes);
"SSP" is the amount of the Salary Severance Payment (before the deduction
of applicable federal, state and local withholding taxes); "ALTIP" is the
aggregate of the most recently paid or declared (whether or not paid)
long-term incentive compensation payments (but not more than three (3)
such payments) for performance periods that end on or before the
Executive's termination of employment; "ALTSP" is the aggregate base
salary actually paid to the Executive during the performance periods
covered by the payments included in "ALTIP" and excluding base salary
paid for any period for which no long-term incentive compensation payment
was declared or paid; "RUP" is the Remaining Unexpired Employment Period,
expressed in years and fractions of years; and "Y" is the aggregate
(expressed in years and fractions of years) of the Remaining Unexpired
Employment Period plus the number of years and fraction of years that
have elapsed since the end of the last performance period for which a
long-term incentive payment has been declared and paid. In the event that
the Executive's employment terminates prior to the payment date under any
long-term incentive compensation plan, then for purposes of computing the
Incentive Severance Payment, the "ALTIP" shall be deemed to be the
average of the target and maximum award level under such plan and the
"ALTSP" shall be deemed to be the Executive's annual base salary as in
effect on the Executive's termination of employment. The Incentive
Severance Payment shall be made within five (5) business days after the
Executive's termination of employment and shall be in lieu of any claim
to a continuation of participation in cash long-term incentive
compensation plans of the Bank or the Company which the Executive might
otherwise have;
(vii) a lump sum payment in an amount equal to the excess (if any)
of: (A) the present value of the aggregate benefits to which he would be
entitled under any and all tax-qualified and non-tax-qualified defined
benefit plans maintained by, or covering employees of, the Company or the
Bank (the "Pension Plans") if he had continued working for the Company
and the Bank during the Remaining Unexpired Employment Period; over (B)
the present value of the benefits to which the Executive and his spouse
and/or designated beneficiaries are actually entitled under such plans
(the "Pension Severance Payment"). The Pension Severance Payment shall be
computed according to the following formula:
PSP = PPB - APB
where "PSP" is the amount of the Pension Severance Payment (before
deductions for applicable federal, state and local withholding taxes);
"APB" is the aggregate lump sum present value of the actual vested
pension benefits payable under the Pension Plans in the form of a
straight life annuity beginning at the earliest date permitted under the
Pension Plans, computed on the basis of the Executive's life expectancy
at the earliest date on which payments under the Pension Plans could
begin, determined by reference to Table VI of section 1.72-9 of the
Income Tax Regulations (the "Assumed Life Expectancy"), and on the basis
of an interest rate assumption equal to the average bond-equivalent yield
on United States Treasury Securities with a Constant Maturity of thirty
(30) Years for the month prior to the month in which the Executive's
termination of employment occurs
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(the "30-Year Treasury Rate"); and "PPB" is the lump sum present value of
the pension benefits (whether or not vested) that would be payable under
the Pension Plans in the form of a straight life annuity beginning at the
earliest date permitted under the Pension Plans, computed on the basis
that the Executive's actual age at termination of employment is his
attained age as of his last birthday that would occur during the
Remaining Unexpired Employment Period, that his service for benefit
accrual purposes under the Pension Plans is equal to the aggregate of his
actual service plus the Remaining Unexpired Employment Period, that his
average compensation figure used in determining his accrued benefit is
equal to the highest annual rate of salary achieved by the Executive
during the period of three (3) years ending immediately prior to the date
of termination, that the Executive's life expectancy at the earliest date
on which payments under the Pension Plans could begin is the Assumed Life
Expectancy and that the interest rate assumption used is equal to the
30-Year Treasury Rate. The Pension Severance Payment shall be made within
five (5) business days after the Executive's termination of employment
and shall be in lieu of any claim to any actual increase in his accrued
benefit in the Pension Plans in respect of the Remaining Unexpired
Employment Period;
(viii) a lump sum payment in an amount equal to the present value
of the additional employer contributions that would have been credited
directly to his account(s) under any and all tax-qualified and
non-tax-qualified defined contribution plans maintained by, or covering
employees of, the Bank and the Company (the "Non-ESOP DC Plans"), plus
the fair market value of the additional shares of employer securities or
other property that would have been allocated to his account as a result
of employer contributions or dividends under any tax-qualified leveraged
employee stock ownership plan and any related non-tax-qualified
supplemental plan maintained by, or covering employees of, the Bank and
the Company (the "ESOP Plans") if he had continued in employment during
the Remaining Unexpired Employment Period (the "Defined Contribution
Severance Payment"). The Defined Contribution Severance Payment shall be
computed according to the following formula:
DCSP = [SSP x (EC / BS)] + [(STK + PROP) x Y]
where: "DCSP" is the amount of the Defined Contribution Severance Payment
(before deductions for applicable federal, state and local withholding
taxes); "SSP" is the amount of the Salary Severance Payment (before
deductions for applicable federal, state and local withholding taxes);
"EC" is the amount of employer contributions actually credited to the
Executive's accounts under the Non-ESOP Plans for the last plan year to
end before his termination of employment; "BS" is the Executive's
compensation taken into account in computing EC; "Y" is the aggregate
(expressed in years and fractions of years) of the Remaining Unexpired
Employment Period and the number of years and fractions of years that
have elapsed between the end of plan year for which EC was computed and
the date of the Executive's termination of employment; "STK" is the fair
market value (determined on the basis of the mid-point of the highest and
lowest reported sales price for a share of stock of the same class during
the thirty (30)-day period ending on the day of the Executive's
termination of employment (the "Fair Market Value of a Share")) of the
employer securities actually allocated to the Executive's accounts under
the ESOP Plans in respect of employer contributions and dividends applied
to loan amortization payments for the last plan year to end before his
termination of employment; and
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"PROP" is the fair market value (determined as of the day before the
Executive's termination of employment using the same valuation
methodology used to value the assets of the ESOP Plans) of the property
other than employer securities actually allocated to the Executive's
accounts under the ESOP Plans in respect of employer contributions and
dividends applied to loan amortization payments for the last plan year to
end before his termination of employment;
(ix) at the election of the Company made within thirty (30) days
following the Executive's termination of employment, upon the surrender
of options or appreciation rights issued to the Executive under any stock
option and appreciation rights plan or program maintained by, or covering
employees of, the Company or the Bank, a lump sum payment in an amount
equal to the product of:
(A) the excess of (I) the Fair Market Value of a Share, over
(II) the exercise price per share for such option or appreciation
right, as specified in or under the relevant plan or program;
multiplied by
(B) the number of shares with respect to which options or
appreciation rights are being surrendered.
For the purpose of computing this payment, the Executive shall be deemed
fully vested in all options and appreciation rights under any stock
option or appreciation rights plan or program maintained by, or covering
employees of, the Company or the Bank, even if he is not vested under
such plan or program;
(x) at the election of the Company made within thirty (30) days
following the Executive's termination of employment, upon the surrender
of any shares awarded to the Executive under any restricted stock plan
maintained by, or covering employees of, the Company or the Bank, the
Company shall make a lump sum payment in an amount equal to the product
of:
(A) the Fair Market Value of a Share granted under such plan;
multiplied by
(B) the number of shares which are being surrendered.
For purposes of computing this payment, the Executive shall be deemed
fully vested in all shares awarded under any restricted stock plan
maintained by, or covering employees of, the Company or the Bank, even if
he is not vested under such plan; and
(xi) within the sixty (60)-day period following Executive's
termination of employment, Executive shall have the right to purchase, in
cash, the automobile provided to Executive by the Company or the Bank for
use during Executive's employment at a price equal to the trade-in value
of such automobile as reported in the most recently published version of
the Kelley Blue Book or such similar publication as mutually agreed to by
Executive and the Company. In the event that the automobile used by
Executive is leased by the Company or the Bank and Executive elects to
purchase the automobile under this provision, the Bank or the Company
shall arrange to purchase the automobile from the lessor for immediate
resale to Executive at a like price.
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The Company and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any,
to mitigate damages. The Company and the Executive further agree that the
Company may condition the payments and benefits (if any) due under sections
9(b)(iii), (iv), (v), (vi), (vii), (viii), (ix), (x) and (xi) on the receipt of
the Executive's resignation from any and all positions which he holds as an
officer, director or committee member with respect to the Company, the Bank or
any subsidiary or affiliate of either of them.
(c) The Executive, the Company and the Bank acknowledge that each of the
payments and benefits promised to the Executive under this Agreement must
either comply with the requirements of Section 409A and the regulations
thereunder or qualify for an exception from compliance. To that end, the
Executive, the Company and the Bank agree that the termination benefits
described in Section 9(b) are intended to be exempt from Section 409A pursuant
to Treasury Regulation Section 1.409A-1(b)(4) as short-term deferrals.
Section 10. Death and Disability Benefits.
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(a) In the event the Executive's employment with the Company terminates
during the Employment Period because of the Executive's death, then the Company
shall pay to the Executive's estate the benefits listed in sections 9(b)(i) and
9(b)(ii) of this Agreement.
(b) The Company may terminate the Executive's employment upon a
determination, by vote of a majority of the members of the Boards of Directors
of the Company, acting in reliance on the written advice of a medical
professional acceptable to them, that the Executive is suffering from a
physical or mental impairment which, at the date of the determination, has
prevented the Executive from performing his assigned duties on a substantially
full-time basis for a period of at least ninety (90) days during the period of
one (1) year ending with the date of the determination or is likely to result
in death or prevent the Executive from performing his assigned duties on a
substantially full-time basis for a period of at least ninety (90) days during
the period of one (1) year beginning with the date of the determination. In
such event:
(i) The Company shall pay and deliver to the Executive (or in the
event of his death before payment, to his estate and surviving dependents
and beneficiaries, as applicable) the benefits described in sections
9(b)(i) and 9(b)(ii).
(ii) In addition to the benefits described in sections 9(b)(i) and
9(b)(ii), the Company shall continue to pay the Executive his base
salary, at the annual rate in effect for him immediately prior to the
termination of his employment, during a period ending on the earliest of:
(A) the expiration of ninety (90) days after the date of termination of
his employment; (B) the date on which long-term disability insurance
benefits are first payable to him under any long-term disability
insurance plan covering employees of the Bank or the Company (the "LTD
Eligibility Date"); (C) the date of his death; and (D) the expiration of
the Remaining Unexpired Employment Period (the "Initial Continuation
Period"). If the end of the Initial Continuation Period is neither the
LTD Eligibility Date nor the date of his death, the Company shall
continue to pay the Executive his base
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salary, at an annual rate equal to sixty percent (60%) of the annual rate
in effect for him immediately prior to the termination of his employment,
during an additional period ending on the earliest of the LTD Eligibility
Date, the date of his death and the expiration of the Remaining Unexpired
Employment Period.
A termination of employment due to disability under this section 10 shall be
effected by notice of termination given to the Executive by the Company and
shall take effect on the later of the effective date of termination specified
in such notice or the date on which the notice of termination is deemed given
to the Executive.
Section 11. Termination without Additional Company Liability.
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In the event that the Executive's employment with the Company shall
terminate during the Employment Period on account of:
(a) the discharge of the Executive for "cause," which, for purposes
of this Agreement, shall mean a discharge of the Executive due to the
Executive's (i) personal dishonesty, (ii) incompetence, (iii) willful
misconduct, (iii) breach of fiduciary duties involving personal profit,
(iv) intentional failure to perform stated duties, (v) willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order or (vi) material breach of any
provision of this Agreement; provided, however, that, if the Executive
engages in any of the acts described in section 11(a)(vi) above, the
Company shall provide the Executive with written notice of its intent to
discharge the Executive for cause, and the Executive shall have
forty-five (45) days from the date on which the Executive receives such
notice to cure any such acts; and provided, further, that on and after
the date that a Change of Control occurs, a determination under this
section 11 shall require the affirmative vote of at least three-fourths
of the members of the Board acting in good faith and such vote shall not
be made prior to the expiration of a sixty (60)-day period following the
date on which the Board shall, by written notice to the Executive,
furnish to him a statement of its grounds for proposing to make such
determination, during which period the Executive shall be afforded a
reasonable opportunity to make oral and written presentations to the
members of the Board, and to be represented by his legal counsel at such
presentations, to refute the grounds for the proposed determination; or
(b) the Executive's voluntary resignation from employment with the
Company (including retirement) for reasons other than those specified in
section 9(a)(i) or Section 12;
then the Company shall have no further obligations under this Agreement, other
than the payment to the Executive of his earned but unpaid salary as of the
date of the termination of his employment and the provision of such other
benefits, if any, to which he is entitled as a former employee under the
Company's employee benefit plans and programs and compensation plans and
programs. For purposes of this section 11, no act or failure to act, on the
part of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive's action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the written advice of
counsel for the Company shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the
-11-
Executive shall not be deemed to be for "cause" within the meaning of section
11(a) unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of three-fourths of the
members of the Board at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is
given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty
of the conduct described in section 11(a) above, and specifying the particulars
thereof in detail.
Section 12. Termination Upon or Following a Change of Control.
-------------------------------------------------
(a) A Change of Control of the Company ("Change of Control") shall be
deemed to have occurred upon the happening of any of the following events:
(i) the consummation of a reorganization, merger or consolidation
of the Company, respectively, with one (1) or more other persons, other
than a transaction following which:
(A) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended "Exchange Act") in substantially
the same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of Rule
13d-3 promulgated under the Exchange Act) at least 51% of the
outstanding equity ownership interests in the Company; and
(B) at least 51% of the securities entitled to vote generally
in the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule
13d-3 promulgated under the Exchange Act) in substantially the same
relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the securities
entitled to vote generally in the election of directors of the
Company;
(ii) the acquisition of all or substantially all of the assets of
the Company or beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of the outstanding
securities of the Company entitled to vote generally in the election of
directors by any person or by any persons acting in concert, or approval
by the stockholders of the Company of any transaction which would result
in such an acquisition;
(iii) a complete liquidation or dissolution of the Company;
(iv) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board of the Company do not
belong to any of the following groups:
(A) individuals who were members of the Board of the Company
on the date of this Agreement; or
-12-
(B) individuals who first became members of the Board of the
Company after the date of this Agreement either:
(I) upon election to serve as a member of the Board of
the Company by affirmative vote of three-quarters of the
members of such Board, or of a nominating committee thereof,
in office at the time of such first election; or
(II) upon election by the stockholders of the Company
to serve as a member of the Board of the Company, but only if
nominated for election by affirmative vote of three-quarters
of the members of the Board of the Company, or of a
nominating committee thereof, in office at the time of such
first nomination; provided, however, that this section
12(a)(iv) shall only apply if the Company is not majority
owned by Westfield Mutual Holding Company;
provided, however, that such individual's election or nomination
did not result from an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents
other than by or on behalf of the Board of the Company; or
(v) any event which would be described in section 12(a)(i), (ii),
(iii) or (iv) if the term "Bank" were substituted for the term "Company"
therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of: (i) any acquisition of securities or assets of the Company, the
Bank, or a subsidiary of either of them, by the Company, the Bank, or a
subsidiary of either of them, or by any employee benefit plan maintained by any
of them; or (ii) the conversion of Westfield Mutual Holding Company to a stock
form company and the issuance of additional shares of the Company in connection
therewith. For purposes of this section 12(a), the term "person" shall have the
meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
(b) For purposes of this Agreement, a "Pending Change of Control" shall
mean: (i) the signing of a definitive agreement for a transaction which, if
consummated, would result in a Change of Control; (ii) the commencement of a
tender offer which, if successful, would result in a Change of Control; or
(iii) the circulation of a proxy statement seeking proxies in opposition to
management in an election contest which, if successful, would result in a
Change of Control.
(c) Notwithstanding anything in this Agreement to the contrary, if the
Executive's employment with the Bank and the Company terminates due to death or
disability within one (1) year after the occurrence of a Pending Change of
Control and if a Change of Control occurs within two (2) years after such
termination of employment, he (or in the event of his death, his estate) shall
be entitled to receive the benefits described in section 9(b) that would have
been payable if a Change of Control had occurred on the date of his termination
of employment and he had resigned pursuant to section 9(a)(i) immediately
thereafter; provided, that payment shall be deferred without interest until,
and shall be payable immediately upon, the actual occurrence of a Change of
Control.
-13-
(d) Notwithstanding anything in this Agreement to the contrary: (i) in
the event of the Executive's resignation within sixty (60) days after the
occurrence of a Change of Control, he shall be entitled to receive the benefits
described in section 9(b) that would be payable if his resignation were
pursuant to section 9(a)(i), without regard to the actual circumstances of his
resignation; and (ii) for a period of one (1) year after the occurrence of a
Change of Control, no discharge of the Executive shall be deemed a discharge
with Cause unless the votes contemplated by section 11(a) of this Agreement are
supported by at least two-thirds of the members of the Board of Directors of
the Company at the time the vote is taken who were also members of the Board of
Directors of the Company immediately prior to the Change of Control.
(e) Notwithstanding anything in this Agreement to the contrary, for
purposes of computing the benefits described in section 9(b) due upon a
termination of employment that occurs, or is deemed to have occurred, after a
Change of Control, the Remaining Unexpired Employment Period shall be deemed to
be three (3) full years.
Section 13. Tax Indemnification.
-------------------
(a) If the Executive's employment terminates under circumstances
entitling him (or in the event of his death, his estate) to the benefits
described in section 9(b), the Company shall pay to the Executive (or in the
event of his death, his estate) an additional amount intended to indemnify him
against the financial effects of the excise tax imposed on excess parachute
payments under section 280G of the Code (the "Tax Indemnity Payment"). The Tax
Indemnity Payment shall be determined under the following formula:
X = E x P
--------------------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E + M]
where
E = the percentage rate at which an 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 13;
FI = the highest marginal rate of income tax applicable to the
Executive under the Code for the taxable year in question;
SLI = the sum of the highest marginal rates of income tax applicable
to the Executive under all applicable state and local laws for the
taxable year in question; and
M = the highest marginal rate of Medicare tax applicable to the
Executive under the Code for the taxable year in question.
Such computation shall be made at the expense of the Company by an attorney or
a firm of independent certified public accountants selected by the Executive
and reasonably satisfactory to the Company (the "Tax Advisor") and shall be
based on the following assumptions: (i) that a
-14-
change in ownership, a change in effective ownership or control, or a change in
the ownership of a substantial portion of the assets, of the Bank or the
Company has occurred within the meaning of section 280G of the Code (a "280G
Change of Control"); (ii) that all direct or indirect payments made to or
benefits conferred upon the Executive on account of his termination of
employment are "parachute payments" within the meaning of section 280G of the
Code; and (iii) that no portion of such payments is reasonable compensation for
services rendered prior to the Executive's termination of employment.
(b) With respect to any payment that is presumed to be a parachute
payment for purposes of section 280G of the Code, the Tax Indemnity Payment
shall be made to the Executive on the earlier of (1) the date the Company, the
Bank or any direct or indirect subsidiary or affiliate of the Company or the
Bank is required to withhold such tax; (2) the date the tax is required to be
paid by the Executive, unless, prior to such date, the Company delivers to the
Executive the written opinion, in form and substance reasonably satisfactory to
the Executive, of the Tax Advisor or of an attorney or firm of independent
certified public accountants selected by the Company and reasonably
satisfactory to the Executive, to the effect that the Executive has a
reasonable basis on which to conclude that (i) no 280G Change of Control has
occurred, or (ii) all or part of the payment or benefit in question is not a
parachute payment for purposes of section 280G of the Code, or (iii) all or a
part of such payment or benefit constitutes reasonable compensation for
services rendered prior to the 280G Change of Control, or (iv) for some other
reason which shall be set forth in detail in such letter, no excise tax is due
under section 4999 of the Code with respect to such payment or benefit (the
"Opinion Letter"); or (3) within 2 1/2 months following the end of the taxable
year of the Executive, Bank or the Company, whichever is longer, in which the
termination event occurs. If the Company delivers an Opinion Letter, the Tax
Advisor shall recompute, and the Company shall make, the Tax Indemnity Payment
in reliance on the information contained in the Opinion Letter.
(c) In the event that the Executive's liability for the excise tax under
section 4999 of the Code for a taxable year is subsequently determined to be
different than the amount with respect to which the Tax Indemnity Payment is
made, the Executive or the Company, as the case may be, shall pay to the other
party at the time that the amount of such excise tax is finally determined,
consistent with the time limitations specified in Section 13(b), an appropriate
amount, plus interest, such that the payment made under section 13(b), when
increased by the amount of the payment made to the Executive under this section
13(c), or when reduced by the amount of the payment made to the Company under
this section 13(c), equals the amount that should have properly been paid to
the Executive under this section 13(c). The interest paid to the Company under
this section 13(c) shall be determined at the rate provided under section
1274(b)(2)(B) of the Code. The payment made to the Executive shall include such
amount of interest as is necessary to satisfy any interest assessment made by
the Internal Revenue Service and an additional amount equal to any monetary
penalties assessed by the Internal Revenue Service on account of an
underpayment of the excise tax. To confirm that the proper amount, if any, was
paid to the Executive under this section 13, the Executive shall furnish to the
Company a copy of each tax return which reflects a liability for an excise tax,
at least twenty (20) days before the date on which such return is required to
be filed with the Internal Revenue Service. Nothing in this Agreement shall
give the Company any right to control or otherwise participate in any action,
suit or proceeding to which the Executive is a party as a result of positions
taken on his federal income tax return with respect to his liability for excise
taxes under section 4999 of the Code.
-15-
Section 14. Covenant Not To Compete.
-----------------------
The Executive hereby covenants and agrees that, in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one (1) year following the date of his
termination of employment with the Company, he shall not, without the written
consent of the Company, become an officer, employee, consultant, director or
trustee of any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, or any direct or indirect
subsidiary or affiliate of any such entity, that entails working within Hampden
county or any other county in which the Company or the Bank maintains an
office; provided, however, that this section 14 shall not apply if the
Executive is entitled to the benefits listed in sections 9(b)(iii), (iv), (v),
(vi), (vii), (viii), (ix), (x) and (xi).
Section 15. Confidentiality.
---------------
Unless he obtains the prior written consent of the Company, the Executive
shall keep confidential and shall refrain from using for the benefit of
himself, or any person or entity other than the Company or any entity which is
a subsidiary of the Company or of which the Company is a subsidiary, any
material document or information obtained from the Company, or from its parent
or subsidiaries, in the course of his employment with any of them concerning
their properties, operations or business (unless such document or information
is readily ascertainable from public or published information or trade sources
or has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or
available); provided, however, that nothing in this section 15 shall prevent
the Executive, with or without the Company's consent, from participating in or
disclosing documents or information in connection with any judicial or
administrative investigation, inquiry or proceeding to the extent that such
participation or disclosure is required under applicable law.
Section 16. Solicitation.
------------
The Executive hereby covenants and agrees that, for a period of one (1)
year following his termination of employment with the Company, he shall not,
without the written consent of the Company, either directly or indirectly:
(a) solicit, offer employment to, or take any other action
intended, or that a reasonable person acting in like circumstances would
expect, to have the effect of causing any officer or employee of the
Company, the Bank or any of their respective subsidiaries or affiliates
to terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity
whatsoever to, any savings bank, savings and loan association, bank, bank
holding company, savings and loan holding company, or other institution
engaged in the business of accepting deposits, making loans or doing
business within the counties specified in section 14;
(b) provide any information, advice or recommendation with respect
to any such officer or employee of any savings bank, savings and loan
company, bank, bank holding company, savings and loan holding company, or
other institution engaged in the business of accepting deposits, making
loans or doing business within the counties specified in section 14; that
is intended, or that a reasonable person acting in like circumstances
would expect, to have
-16-
the effect of causing any officer or employee of the Company, the Bank,
or any of their respective subsidiaries or affiliates to terminate his
employment and accept employment or become affiliated with, or provide
services for compensation in any capacity whatsoever to, any savings
bank, savings and loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged in the business of
accepting deposits, making loans or doing business within the county
specified in section 14;
(c) solicit, provide any information, advice or recommendation or
take any other action intended, or that a reasonable person acting in
like circumstances would expect, to have the effect of causing any
customer of the Company, the Bank or any of their respective subsidiaries
to terminate an existing business or commercial relationship with any of
them.
Section 17. No Effect on Employee Benefit Plans or Programs.
-----------------------------------------------
The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Company or by the Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Company's qualified or non-qualified retirement, pension, savings, thrift,
profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or such other employee benefit plans or programs, or
compensation plans or programs, as may be maintained by, or cover employees of,
the Company from time to time; provided, however, that nothing in this
Agreement shall be deemed to duplicate any compensation or benefits provided
under any agreement, plan or program covering the Executive to which the
Company is a party and any duplicative amount payable under any such agreement,
plan or program shall be applied as an offset to reduce the amounts otherwise
payable hereunder.
Section 18. Other Termination.
-----------------
Upon the expiration of this Agreement other than on account of the
Executive's refusing to accept an extension offered by the Company or the
Executive's giving of a notice of non-extension, unless the Company shall offer
to the Executive continued service either: (i) in the same position in effect
immediately prior to the expiration of this Agreement with cash compensation
and pension and welfare benefits no less favorable than those in effect
immediately prior to the expiration of this Agreement; or (ii) in another
position acceptable to the Executive and upon mutually and reasonably agreeable
terms, the Executive shall be entitled to receive for a period of twelve (12)
months after the expiration of the Agreement (in this event, the "Severance
Period") and continuation of base salary at the rate then in effect plus
medical, dental, life-insurance and disability coverage; provided, that the
Executive's continued participation is permissible or otherwise practicable
under the general terms and provisions of such plans. To the extent that
continued participation is neither permissible nor practicable, the Company
shall take such actions as may be necessary to provide the Executive with
substantially comparable benefits (without additional cost to the Executive)
outside the scope of such plans. If the Executive engages in regular employment
after his termination of employment (whether as an executive or as a
self-employed person), any employee welfare benefits received by the Executive
during the Severance Period in consideration of such employment which are
similar in nature to the employee welfare benefits provided by the Company will
relieve the Company of their obligations under this section 18 to provide
comparable benefits to the extent of the benefits so received. This section 18
shall have no application if, prior to the expiration of this
-17-
Agreement, the Executive's employment has terminated in a termination to which
section 9, 10, 11 or 12 applies or if, after the expiration of this Agreement,
the Executive's employment is terminated with Cause.
The Executive, the Company and the Bank agree that the termination
benefits described in this Section 18 are intended to be exempt from Section
409A pursuant to Treasury Regulation Section 1.409A-1(b)(1) as non-taxable
benefits.
Section 19. Successors and Assigns.
----------------------
This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Company, and their respective successors and assigns, including any
successor by merger or consolidation or a statutory receiver or any other
person or firm or corporation to which all or substantially all of the assets
and business of the Company may be sold or otherwise transferred. Failure of
the Company to obtain from any successor its express written assumption of the
Company's obligations hereunder at least sixty (60) days in advance of the
scheduled effective date of any such succession shall be deemed a material
breach of this Agreement.
Section 20. Notices.
-------
Any communication required or permitted to be given under this Agreement,
including any notice, direction, designation, consent, instruction, objection
or waiver, shall be in writing and shall be deemed to have been given at such
time as it is delivered personally, or five (5) days after mailing if mailed,
postage prepaid, by registered or certified mail, return receipt requested,
addressed to such party at the address listed below or at such other address as
one (1) such party may by written notice specify to the other party:
If to the Executive:
Michael J. Janosco, Jr.
41 Wilder Road
Sterling, Massachusetts 01564
If to the Company:
Westfield Financial, Inc.
141 Elm Street
Westfield, Massachusetts 01085
Attention: Chairman of the Board of Directors
----------------------------------
with a copy to:
Thacher Proffitt & Wood LLP
1700 Pennsylvania Avenue, N.W.,
Suite 800
Washington, D.C. 20006
Attention: Richard A. Schaberg, Esq.
-------------------------
-18-
Section 21. Indemnification for Attorneys' Fees.
-----------------------------------
(a) The Company shall indemnify, hold harmless and defend the Executive
against reasonable costs, including legal fees and expenses, incurred by him in
connection with or arising out of any action, suit or proceeding in which he
may be involved, as a result of his efforts, in good faith, to defend or
enforce the terms of this Agreement. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Company's or the Bank's obligations hereunder shall be conclusive evidence
of the Executive's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
(b) The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.
Section 22. Severability.
------------
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
Section 23. Waiver.
------
Failure to insist upon strict compliance
with any of the terms, covenants or conditions hereof
shall not be deemed a waiver of such term, covenant, or
condition. A waiver of any provision of this Agreement
must be made in writing, designated as a waiver, and
signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right or
power hereunder at any one (1) or more times shall not be
deemed a waiver or relinquishment of such right or power
at any other time or times.
Section 24. Counterparts.
------------
This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and
the same Agreement.
Section 25. Governing Law.
-------------
Except to the extent preempted by federal law, this Agreement shall be
governed by and construed and enforced in accordance with the laws of the
Commonwealth of Massachusetts applicable to contracts entered into and to be
performed entirely within the Commonwealth of Massachusetts.
-19-
Section 26. Headings and Construction.
-------------------------
The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement,
unless otherwise stated.
Section 27. Entire Agreement; Modifications.
-------------------------------
This instrument contains the entire agreement of the parties relating to
the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto. Notwithstanding the preceding
sentence, this Agreement shall be construed and administered in such manner as
shall be necessary to effect compliance with Section 409A and shall be subject
to amendment in the future, in such manner as the Company and the Bank may deem
necessary or appropriate to effect such compliance; provided that any such
amendment shall preserve for the Executive the benefit originally afforded
pursuant to this Agreement.
Section 28. Non-duplication.
---------------
The Company hereby agrees to guarantee the payment by the Bank of any
benefits and compensation to which the Executive is, or may be, entitled under
the terms and conditions of the employment agreement of even date herewith
between the Bank and the Executive. In the event that the Executive shall
perform services for the Bank or any other direct or indirect subsidiary or
affiliate of the Company or the Bank, any compensation or benefits provided to
the Executive by such other employer shall be applied to offset the obligations
of the Company hereunder, it being intended that this Agreement set forth the
aggregate compensation and benefits payable to the Executive for all services
to the Company, the Bank and all of their respective direct or indirect
subsidiaries and affiliates.
Section 29. Dispute Resolution.
------------------
(a) The Executive acknowledges and agrees that upon any breach by the
Executive of his obligations under sections 14, 15 or 16 hereof, the Company
and Bank will have no adequate remedy at law, and accordingly will be entitled,
in addition to monetary damages, to specific performance and other appropriate
injunctive and equitable relief.
(b) Excluding only requests for equitable relief by the Company or Bank
under section 29(a) of this Agreement, in the event that there is any claim or
dispute arising out of or relating to this Agreement, or the breach thereof,
and the parties hereto shall not have resolved such claim or dispute within
sixty (60) days after written notice from one (1) party to the other setting
forth the nature of such claim or dispute, then such claim or dispute shall be
settled exclusively by binding arbitration in Boston, Massachusetts in
accordance with the Employment Arbitration Rules of the American Arbitration
Association by an arbitrator mutually agreed upon by the parties hereto or, in
the absence of such agreement, by an arbitrator selected according to such
Rules. Notwithstanding the foregoing, if either the Company and Bank or the
Executive shall request, such arbitration shall be conducted by a panel of
three (3) arbitrators, one (1) selected by the Company and Bank, one (1)
selected by the Executive and the third selected by agreement of the first two
(2), or, in the absence of such agreement, in
-20-
accordance with such Rules. Judgment upon the award rendered by such
arbitrator(s) shall be entered in any court having jurisdiction thereof upon
the application of either party.
Section 30. Survival.
--------
Any provision of this Agreement which, by its terms, contemplates
performance after the expiration of the Employment Period or other termination
of this Agreement shall be deemed to survive the expiration of this Agreement.
Section 31. Required Regulatory Provisions.
------------------------------
The following provisions are included for the purposes of complying with
various laws, rules and regulations applicable to the Company:
(a) Notwithstanding anything herein contained to the contrary, any
payments to the Executive by the Company, whether pursuant to this
Agreement or otherwise, are subject to and conditioned upon their
compliance with section 18(k) of the Federal Deposit Insurance Act ("FDI
Act"), 12 U.S.C. ss.1828(k), and any regulations promulgated thereunder.
(b) Notwithstanding anything herein contained to the contrary, if
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Company pursuant to a
notice served under section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(1), the Company's obligations under this
Agreement shall be suspended as of the date of service of such notice,
unless stayed by appropriate proceedings. If the charges in such notice
are dismissed, the Company, in its discretion, may (i) pay to the
Executive all or part of the compensation withheld while the Company's
obligations hereunder were suspended and (ii) reinstate, in whole or in
part, any of the obligations which were suspended.
(c) Notwithstanding anything herein contained to the contrary, if
the Executive is removed and/or permanently prohibited from participating
in the conduct of the Company's affairs by an order issued under section
8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(1), all
obligations of the Company under this Agreement shall terminate as of the
effective date of the order, but vested rights of the Company and the
Executive shall not be affected.
(d) Notwithstanding anything herein contained to the contrary, if
the Company is in default (within the meaning of section 3(x)(1) of the
FDI Act, 12 U.S.C. ss.1813(x)(1), all obligations of the Company under
this Agreement shall terminate as of the date of default, but vested
rights and obligations of the Company and the Executive shall not be
affected.
(e) Notwithstanding anything herein contained to the contrary, all
obligations of the Company hereunder shall be terminated, except to the
extent that a continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the OTS or his
designee or the Federal Deposit Insurance Corporation ("FDIC"), at the
time the FDIC enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in section 13(c) of the
FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the OTS or his
designee at the time such Director or designee approves a supervisory
merger to resolve
-21-
problems related to the operation of the Bank or when the Bank is
determined by such Director to be in an unsafe or unsound condition. The
vested rights of the parties shall not be affected by such action.
If and to the extent that any of the foregoing provisions shall cease to
be required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
Section 32. Payments to Key Employees.
-------------------------
Notwithstanding anything in this Agreement to the contrary, to the extent
required under Section 409A, no payment to be made to a key employee (within
the meaning of Section 409A) shall be made sooner than six (6) months after
such termination of employment; provided, however, that to the extent such six
(6)-month delay is imposed by Section 409A as a result of a Change of Control
as defined in Section 12(a), the payment shall be paid into a rabbi trust for
the benefit of the Executive as if the six (6)-month delay was not imposed with
such amounts then being distributed to the Executive as soon as permissible
under Section 409A.
Section 33. Involuntary Termination Payments to Employees (Safe Harbor).
-----------------------------------------------------------
In the event a payment is made to an employee upon an involuntary
termination of employment, as deemed pursuant to this Agreement, such payment
will not be subject to Section 409A provided that such payment does not exceed
two (2) times the lesser of (i) the sum of the Executive's annualized
compensation based on the taxable year immediately preceding the year in which
termination of employment occurs or (ii) the maximum amount that may be taken
into account under a qualified plan pursuant to Section 401(a)(17) of the Code
for the year in which the Executive terminates service (the "Safe Harbor
Amount"). However, if such payment exceeds the Safe Harbor Amount, only the
amount in excess of the Safe Harbor Amount will be subject to Section 409A. In
addition, if such Executive is considered a key employee, such payment in
excess of the Safe Harbor Amount will have its timing delayed and will be
subject to the six (6)-month wait-period imposed by Section 409A as provided in
Section 32 of this Agreement. The Executive, the Company and the Bank agree
that the termination benefits described in this Section 33 are intended to be
exempt from Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(iii) as the safe harbor for separation pay due to involuntary
separation from service.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Executive has hereunto set his hand, all as of the day and year first
above written.
EXECUTIVE
/s/ Michael J. Janosco, Jr.
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Michael J. Janosco, Jr.
ATTEST: WESTFIELD FINANCIAL, INC.
By /s/ Philip R. Smith By /s/ Donald A. Williams
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Secretary Name: Donald A. Williams
Title: CEO
[Seal]
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