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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): On or about May 26, 2006
FIRST IPSWICH BANCORP
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(Exact name of registrant as specified in its charter)
Massachusetts 333-114018 04-2955061
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
31 Market Street, Ipswich, Massachusetts 01938
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 356-3700
Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement
Letter Agreement with Mr. Russell G. Cole
On July 21, 2006, First Ipswich Bancorp (the "Company"), and its wholly-owned
subsidiary, The First National Bank of Ipswich (the "Bank"), entered into a
Letter Agreement with Mr. Russell G. Cole, who currently serves as the Interim
President and Chief Executive Officer of the Company and the Bank (the "Cole
Letter Agreement").
The Cole Letter Agreement provides for Mr. Cole to receive an annualized base
salary of $200,000, a $3,000 housing allowance, and a $10,000 moving allowance
if Mr. Cole decides to relocate to the area in and around Ipswich,
Massachusetts. The agreement provides for a six month term, beginning on June 7,
2006.
The foregoing description of the Cole Letter Agreement is qualified in its
entirety by reference to the terms of the agreement attached hereto as Exhibit
10.1 and incorporated herein by reference.
Change in Control Agreement with Mr. John P. DiIorio
On or about May 26, 2006, the Bank entered into a Change in Control Agreement
(the "DiIorio Agreement") with Mr. John P. DiIorio, Jr., a Senior Vice President
of the Bank.
The DiIorio Agreement provides for the payment of two years of severance pay if
Mr. DiIorio's employment is terminated within twelve months following a "change
in control" of the Bank (as defined in the DiIorio Agreement) for any reason
other than on account of "cause" (as defined in the DiIorio Agreement) or on
account of death, disability or retirement. While employed by the Bank and for
the period of the severance payments thereafter, Mr. DiIorio may not solicit or
induce any employee of the Bank or any subsidiary or affiliate of the Bank to
leave his or her employment.
The foregoing description of the DiIorio Agreement is qualified in its entirety
by reference to the terms of the agreement attached hereto as Exhibit 10.2 and
incorporated herein by reference.
Waiver of Certain Terms of Employment Agreement by Mr. Neil St. John Raymond
On July 21, 2006, the Company and Mr. Neil St. John Raymond, Chairman of the
Board of Directors of the Company, entered into an agreement, at Mr. Raymond's
initiative, that waives his right to certain cash compensation. Under the terms
of the waiver, Mr. Raymond (i) waives his salary for the period from June 1,
2006 through December 31, 2006, (ii) waives a four percent salary increase as to
the 2006 calendar year that he otherwise would have been contractually entitled
to receive under his employment agreement, (iii) acknowledges that as a result
of the waiver his 2007 base annual salary will be 104 percent of his 2005 base
annual salary, and (iv) acknowledges that all other benefits that accrue to him
under his employment agreement will continue in full force and effect.
The foregoing description of the waiver is qualified in its entirety by
reference to the terms of the waiver attached hereto as Exhibit 10.3 and
incorporated herein by reference. A copy of Mr. Raymond's employment agreement
was filed as Exhibit 10.4 to the Company's Registration Statement on Form SB-2
(File No. 333-114018).
In addition to Mr. Raymond's position as Chairman of the Board of the Company,
he is the 44.62% owner of the Company's outstanding common stock. Mr. Raymond's
children are the beneficiaries of the Raymond Children's Trust 1981 which owns
18.45% of the Company's outstanding common stock.
SERP Amendments
On July 21, 2006, and July 24, 2006, respectively, the Company entered into
first amendments to the executive supplemental compensation agreements (each, a
"SERP" and collectively, the "SERPs") between the Company and each of Mr. Neil
St. John Raymond, Chairman of the Board of Directors of the Company, and Mr.
Donald P. Gill, former President and Chief Executive Officer of the Company and
the Bank. The amendments modified each SERP in response to Section 409A of the
Internal Revenue Code of 1986, as amended, that affects non-qualified deferred
compensation plans such as SERPs.
The amendments allow the participants to elect to receive a lump sum payment at
retirement. Mr. Raymond's SERP was also amended to add a definition for the term
"change in control" and to clarify the compensation components used to calculate
the benefit. The definition of "change in control" is the same as the definition
provided in Mr. Raymond's Change in Control Agreement with the Company, which
was filed as Exhibit 10.6 to the Company's Registration Statement on Form SB-2
(File No. 333-114018) and is incorporated herein by reference. The benefit
computation amount is defined as the average of the participant's annual salary
and bonus during the three consecutive calendar years in which his combined
salary and bonus is the highest, as determined by reference to the W-2 forms
issued by the Company.
The foregoing descriptions of the amendments are qualified in their entirety by
reference to the full text of the amendments attached hereto as Exhibits 10.4
and 10.5 and incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement
The Change in Control Agreement entered into by and between Mr. John P. DiIorio,
Jr. and the Bank on March 31, 2004 (the "2004 DiIorio Agreement") was superseded
by the DiIorio Agreement described above. The principal differences between the
2004 DiIorio Agreement and the current DiIorio Agreement are that the current
DiIorio Agreement (i) extends the period of severance pay following termination
from one year to two years, and (ii) does not include a non-competition
provision. The discussion of the DiIorio Agreement in "Item 1.01 Entry Into a
Material Definitive Agreement" of this Current Report on Form 8-K is
incorporated herein by reference.
Item 8.01 Other Events
On July 19, 2006, the Board of Directors of the Company decided to not declare a
dividend for the third quarter.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
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Exhibit 10.1 Letter Agreement by and between First Ipswich Bancorp, The First
National Bank of Ipswich and Mr. Russell G. Cole
Exhibit 10.2 Change in Control Agreement by and between The First National
Bank of Ipswich and Mr. John P. DiIorio, Jr.
Exhibit 10.3 Waiver of Mr. Neil St. John Raymond as to Certain Compensation
Exhibit 10.4 First Amendment to First Ipswich Bancorp Executive Supplemental
Compensation Agreement between First Ipswich Bancorp and Mr. Neil
St. John Raymond
Exhibit 10.5 First Amendment to First Ipswich Bancorp Executive Supplemental
Compensation Agreement between First Ipswich Bancorp and Mr.
Donald P. Gill
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST IPSWICH BANCORP
Date: July 25, 2006 By: /s/ Timothy L. Felter
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Timothy L. Felter
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Exhibit Description
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10.1 Letter Agreement by and between First Ipswich Bancorp, The First
National Bank of Ipswich and Mr. Russell G. Cole
10.2 Change in Control Agreement by and between The First National
Bank of Ipswich and Mr. John P. DiIorio, Jr.
10.3 Waiver of Mr. Neil St. John Raymond as to Certain Compensation
10.4 First Amendment to First Ipswich Bancorp Executive Supplemental
Compensation Agreement between First Ipswich Bancorp and Mr. Neil
St. John Raymond
10.5 First Amendment to First Ipswich Bancorp Executive Supplemental
Compensation Agreement between First Ipswich Bancorp and Mr.
Donald P. Gill