Exhibit 10.6
AMENDED AND
RESTATED
CHICOPEE SAVINGS
BANK
CHANGE IN CONTROL
AGREEMENT
This AGREEMENT
(“Agreement”), as amended and restated, is hereby
entered into as of November 20, 2008, by and between
Chicopee Savings Bank (the “Bank”), a
Massachusetts-chartered financial institution, with its principal
offices at 70 Center Street Chicopee, Massachusetts 01013 ,
Alzira C. Costa (“Executive”) and Chicopee
Bancorp, Inc. (the “Company”), a
Massachusetts-chartered corporation and the stock holding company
of the Bank, as guarantor.
WHEREAS , the Bank, the Company and the Executive
entered into a change in control agreement effective July 19,
2006; and
WHEREAS , the Bank recognizes the importance of
Executive to the Bank’s operations and wishes to protect her
position with the Bank in the event of a change in control of the
Bank or the Company for the period provided for in this Agreement;
and
WHEREAS , Executive and the Boards of Directors of the
Bank and the Company desire to enter into an amended and restated
agreement setting forth the terms and conditions of payments due to
Executive in the event of a change in control and the related
rights and obligations of each of the parties and to bring the
Agreement into compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and the
regulations and guidance issued with respect to
Section 409A.
NOW, THEREFORE
, in consideration of the promises
and mutual covenants herein contained, it is hereby agreed as
follows:
(a) The term of this Agreement shall
be deemed to have commenced as of July 19, 2006 and shall
continue for a period of thirty-six (36) full calendar months
thereafter. Commencing on the date of the execution of this
Agreement, the term of this Agreement shall be extended for one day
each day until such time as the board of directors of the Bank (the
“Board”) or Executive elects not to extend the term of
the Agreement by giving written notice to the other party in
accordance with Section 7 of this Agreement, in which case the
term of this Agreement shall be fixed and shall end on the third
anniversary of the date of such written notice.
(b) Notwithstanding anything in this
Section to the contrary, this Agreement shall terminate if
Executive or the Bank terminates Executive’s employment prior
to a Change in Control.
(a) Upon the occurrence of a Change
in Control of the Bank or the Company followed at any time during
the term of this Agreement by the termination of Executive’s
employment in accordance with the terms of this Agreement, other
than for Just Cause, as defined in Section 2(c) of this
Agreement, the provisions of Section 3 of this Agreement shall
apply. Upon the occurrence of a Change in Control, Executive shall
have the right to elect to voluntarily terminate her employment at
any time during the term of this Agreement following an event
constituting “Good Reason.”
For purposes of this Agreement,
“Good Reason” shall mean the occurrence of any of the
following events without the Executive’s consent:
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(i)
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The assignment
to Executive of duties that constitute a material diminution of
Executive’s authority, duties, or responsibilities (including
reporting requirements);
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(ii)
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A material
diminution in Executive’s base salary;
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(iii)
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Relocation of
Executive to a location outside a radius of thirty-five
(35) miles of the Bank’s Chicopee, Massachusetts office;
or
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(iv)
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Any other
action or inaction by the Bank or the Company that constitutes a
material breach of this Agreement;
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provided, that within ninety
(90) days after the initial existence of such event, the Bank
shall be given notice and an opportunity, not less than thirty
(30) days, to effectuate a cure for such asserted “Good
Reason” by Executive. Executive’s resignation hereunder
for Good Reason shall not occur later than one hundred fifty
(150) days following the initial date on which the event
Executive claims constitutes Good Reason occurred.
(b) For purposes of this Agreement,
a “Change in Control” shall be deemed to occur on the
earliest of:
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(i)
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Merger : The Company or the Bank merges into or
consolidates with another corporation, or merges another
corporation into the Company or the Bank, and as a result less than
a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held
by persons who were stockholders of the Company or the Bank
immediately before the merger or consolidation;
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(ii)
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Acquisition
of Significant Share Ownership : The Company files, or is required to file, a
report on Schedule 13D or another form or schedule (other than
Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the
filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Company’s
voting securities, but this clause (b) shall not apply to
beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly
beneficially owns 50% or more of its outstanding voting
securities;
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(iii)
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Change in
Board Composition :
During any period of two consecutive years, individuals who
constitute the Bank’s or the Company’s Board of
Directors at the beginning of the two-year period cease for any
reason to constitute at least a majority of the Bank’s or the
Company’s Board of Directors; provided, however, that for
purposes of this clause (iii), each director who is first elected
by the board (or first nominated by the board for election by the
stockholders) by a vote of at least two-thirds (2/3) of the
directors who were directors at the beginning of the two-year
period shall be deemed to have also been a director at the
beginning of such period; or
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(iv)
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Sale of
Assets : The Company or
the Bank sells to a third party all or substantially all of its
assets.
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(c) Executive shall not have the
right to receive termination benefits pursuant to Section 3
hereof upon termination for Just Cause. The term “Just
Cause” shall mean termination because of Executive’s
personal dishonesty, incompetence, willful misconduct, any breach
of fiduciary duty
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involving personal profit, intentional failure
to perform stated duties, willful violation of any law, rule,
regulation (other than traffic violations or similar offenses),
final cease and desist order, or any material breach of any
provision of this Agreement. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Just
Cause unless and until there shall have been delivered to her a
copy of a resolution duly adopted by the affirmative vote of a
majority of the entire membership of the Board of Directors of the
Bank at a meeting of the Board of Directors called and held for
that purpose (after reasonable notice to Executive and an
opportunity for him, together with counsel, to be heard before the
Board of Directors), finding that in the good faith opinion of the
Board of Directors, Executive was guilty of conduct justifying
termination for Just Cause and specifying the particulars thereof
in detail. Executive shall not have the right to receive
compensation or other benefits for any period after termination for
Just Cause. During the period beginning on the date of the Notice
of Termination for Just Cause pursuant to Section 4 hereof
through the Date of Termination, stock options granted to Executive
under any stock option plan shall not be exercisable nor shall any
unvested stock awards granted to Executive under any stock benefit
plan of the Association, the Company or any subsidiary or affiliate
thereof, vest. At the Date of Termination, such stock options and
any such unvested stock awards shall become null and void and shall
not be exercisable by or delivered to Executive at any time
subsequent to such termination for Just Cause.
(a) If, within two (2) years of
a Change in Control, Executive voluntarily terminates employment
for Good Reason (in accordance with Section 2(a) of this
Agreement) or if the Bank involuntarily terminates her employment,
Executive shall receive:
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(i)
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a lump sum cash
payment equal to three (3) times the Executive’s average
annual compensation (based on taxable income reported in Box 1
of Executive’s Form W-2) for the five (5) preceding
calendar years. Such payment shall be made not later than five
(5) days following Executive’s termination of employment
and shall be reduced, if necessary, to avoid an excess parachute
payment as noted in paragraph (b) of this
Section 3.
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(ii)
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Continued
benefit coverage under all Bank health and welfare plans which
Executive participated in as of the date of the Change in Control
(collectively, the “Employee Benefit Plans”) for a
period of thirty-six (36) months following Executive’s
termination of employment. Said coverage shall be provided under
the same terms and conditions in effect on the date of
Executive’s termination of employment. Solely for purposes of
benefits continuation under the Employee Benefit Plans, Executive
shall be deemed to be an active employee. To the extent that
benefits required under this Section 3(a) cannot be provided
under the terms of any Employee Benefit Plan, the Bank shall enter
into alternative arrangements that will provide Executive with
comparable benefits.
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The Bank shall pay the aggregate sum
of these amounts to Executive in a single lump sum payment (without
any mitigation) no later than ten (10) business days following
Executive’s termination of employment.
(b) Notwithstanding the preceding
provisions of this Section 3, in no event shall the aggregate
payments or benefits to be made or afforded to Executive under said
paragraphs (the “Termination Benefits”) constitute an
“excess parachute payment” under Section 280G of
the Code or any successor thereto, and to avoid such a result,
Termination Benefits will be reduced, if necessary, to an amount
(the “Non-Triggering Amount”), the value of which is
one dollar ($1.00) less than an amount equal to three
(3) times Executive’s “base amount,” as
determined in accordance with said Section 280G. The
allocation of the reduction required hereby among the Termination
Benefits provided by this Section 3 shall be determined by
Executive.
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(c) Notwithstanding the foregoing,
in the event Executive is a “Specifi
