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Exhibit 10.3
BERKSHIRE BANK
THREE YEAR CHANGE IN CONTROL AGREEMENT
This AGREEMENT is made effective as of October
31, 2006, by and among Berkshire Bank
(the "Institution"), a state chartered savings
institution with its principal administrative offices at 24 North
Street, Pittsfield, Massachusetts 01201, Berkshire
Hills Bancorp, Inc. (the "Holding
Company"), a corporation organized under the laws of the state of
Delaware, which is the stock holding company of the Institution,
and John J. Howard ("Executive").
WHEREAS, the Institution recognizes the
substantial contributions Executive has made to the Institution and
wishes to protect Executive’s position with the Institution
for the period provided in this Agreement; and
WHEREAS, Executive has agreed to serve in the
employ of the Institution.
NOW, THEREFORE, in consideration of the
contributions and responsibilities of Executive, and upon the other
terms and conditions hereinafter provided, the parties hereto agree
as follows:
The period of this Agreement shall be deemed to
have commenced as of the date first above written and shall
continue for a period of thirty-six (36) full calendar months
thereafter. Commencing on the first anniversary date of this
Agreement, and continuing on each anniversary thereafter, the Board
of Directors (the "Board") may act to extend the term of this
Agreement for an additional year, such that the remaining term of
this Agreement would be three years, unless Executive elects not to
extend the term of this Agreement by giving written notice to the
Institution, in which case the term of this Agreement will expire
on the third anniversary of this Agreement.
(a) Upon the
occurrence of a Change in Control of the Institution or the Holding
Company (as herein defined) followed at any time during the term of
this Agreement by the involuntary termination of Executive’s
employment or the voluntary termination of Executive’s
employment in accordance with the terms of this Agreement, other
than for Cause, as defined in Section 2(c) of this Agreement, the
provisions of Section 3 of this Agreement shall apply.
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(i)
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Upon the occurrence of a Change in Control,
Executive shall have the right to elect to voluntarily terminate
his employment at any time during the term of this Agreement
following any demotion, loss of title, office or significant
authority, reduction in annual compensation or benefits, or
relocation of his principal place of employment by more than
twenty-five (25) miles from its location immediately prior to the
Change in Control.
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(ii)
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Notwithstanding the foregoing clause (i), in the
event, however, that the Chief Executive Officer of the Institution
immediately prior to the Change in Control is the Chief Executive
Officer of the resulting entity with similar responsibilities and
duties and Executive’s position with the resulting entity
does not result in: (A) a reduction in annual compensation or
benefits, (B) a material change in work schedule, or (C) relocation
of his principal place of employment by more than fifty (50) miles,
then Executive may not voluntarily terminate his employment during
the one-year period following the Change in Control and receive any
payments or benefits under this Agreement. For the avoidance of
doubt, with respect to the immediately foregoing limitation on
voluntary termination, Executive may voluntarily terminate
employment in accordance with this Section 2(a) effective upon the
expiration of said one-year period, and for a period of 30 days
thereafter, if one of the events set forth in clause (i) has
occurred, either at the time of the Change in Control or during the
one-year period following the time of the Change in Control. If one
of the events described in clause (i) occurs more than one year
following the date of the Change in Control, but during the
remaining term of the Agreement, then Executive may terminate his
employment in accordance with the provisions of this Agreement,
notwithstanding this clause (ii).
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(iii)
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Notwithstanding any other provision of this
Agreement to the contrary, Executive may consent in writing to any
demotion, loss, reduction or relocation and waive his ability to
voluntarily terminate his employment under the terms of this
Agreement. The effect of any written consent of Executive under
this Section 2(a) shall be strictly limited to the terms specified
in such written consent.
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(b) For purposes of
this Agreement, a "Change in Control" of the Institution or Holding
Company shall mean an event of a nature that: (i) would be required
to be reported in response to Item 1(a) of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); or (ii) results in a Change in Control of the Institution or
the Holding Company within the meaning of the Bank Change in
Control Act and the Rules and Regulations promulgated by the
Federal Deposit Insurance Corporation ("FDIC") at 12 C.F.R. §
303.4(a) with respect to the Bank and the Board of Governors of the
Federal Reserve System ("FRB") at 12 C.F.R. § 225.41(b) with
respect to the Holding Company, as in effect on the date hereof; or
(iii) results in a transaction requiring prior FRB approval under
the Bank Holding Company Act of 1956 and the regulations
promulgated thereunder by the FRB at 12 C.F.R. § 225.11, as in
effect on the date hereof except for the Holding Company’s
acquisition of the Institution; or (iv) without limitation such a
Change in Control shall be deemed to have occurred at such time as
(A) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Institution or the Holding Company
representing 20% or more of the Institution’s or the Holding
Company’s outstanding securities except for any securities of
the Institution purchased by the Holding Company in connection with
the conversion of the Institution to the stock form and any
securities purchased by any tax-qualified employee benefit plan of
the Institution; or (B) individuals who constitute the Board of
Directors on the date hereof (the "Incumbent Board")
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cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote
of at least three quarters (3/4) of the directors comprising the
Incumbent Board, or whose nomination for election by the Holding
Company’s stockholders was approved by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes
of this clause (B), considered as though he were a member of the
Incumbent Board; or (C) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the
Institution or the Holding Company or similar transaction occurs in
which the Institution or Holding Company is not the resulting
entity; or (D) solicitations of shareholders of the Holding
Company, by someone other than the current management of the
Holding Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Holding Company or
Institution or similar transaction with one or more corporations as
a result of which the outstanding shares of the class of securities
then subject to the plan or transaction are exchanged for or
converted into cash or property or securities not issued by the
Institution or the Holding Company shall be distributed; or (E) a
tender offer is made for 20% or more of the voting securities of
the Institution or the Institution.
(c) Executive shall
not have the right to receive termination benefits pursuant to
Section 3 of this Agreement upon Termination for Cause. The term
"Termination for Cause" shall mean termination because of: (i)
Executive’s personal dishonesty, willful misconduct, breach
of fiduciary duty 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 material breach of any provision of
this Agreement which results in a material loss to the Institution
or the Holding Company, or (ii) Executive’s conviction of a
crime or act involving moral turpitude or a final judgment rendered
against Executive based upon actions of Executive which involve
moral turpitude. For the purposes of this Section, no act, or the
failure to act, on Executive’s part shall be "willful" unless
done, or omitted to be done, not in good faith and without
reasonable belief that the action or omission was in the best
interests of the Institution or its affiliates. Notwithstanding the
foregoing, Executive shall not be deemed to have been Terminated
for Cause unless and until there shall have been delivered to him a
Notice of Termination which shall include a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of
the members of the Board at a meeting of the Board 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), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for 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 Cause. During the period beginning
on the date of the Notice of Termination for Cause pursuant to
Section 4 of this Agreement 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-based incentive plan of the Institution,
the Holding Company or any subsidiary or affiliate thereof vest. At
the Date of Termination, such stock options and such unvested stock
awards shall become null and void and
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