Exhibit 10.12
FORM OF
CHANGE IN CONTROL
AGREEMENT
This AGREEMENT is made effective as
of
, 2005 by and between UNITED BANK,
a federally chartered stock savings bank (the “Bank”),
and
(“Executive”). Any reference to “Company”
herein shall mean UNITED FINANCIAL BANCORP, INC., or any successor
thereto.
WHEREAS, the Bank recognizes the
substantial contribution Executive has made to the Bank and wishes
to provide Executive with certain protections and benefits in the
event of a Change in Control of the Bank or the Company, as
provided in this Agreement; and
WHEREAS, Executive has been elected
to, and has agreed to serve in the position of
for the Bank, a position of substantial responsibility;
NOW, THEREFORE, in consideration of
the contribution of Executive, and upon the other terms and
conditions hereinafter provided, the parties hereto agree as
follows:
The “term” of this
Agreement shall be thirty-six (36) full calendar months from the
effective date of this Agreement set forth above, and shall include
any extension or renewal made pursuant to Section 1 of this
Agreement. At least sixty (60) days prior to each anniversary date
of this Agreement, the Board will conduct a performance evaluation
and review of Executive for purposes of determining whether to
renew or extend this Agreement, and the results thereof shall be
included in the minutes of the Board’s meeting. In the event
that the Board determines to renew or extend the Agreement, this
Agreement shall renew or extend for an additional twelve (12)
months from the anniversary date, such that the remaining term of
this Agreement shall be thirty-six (36) months from the anniversary
date. In the event the Board determines not to renew or extend this
Agreement, the Board shall provide a notice of non-renewal to the
Executive at least thirty (30) days prior to the anniversary date
of this Agreement. In the event the Board does not renew or extend
the Agreement, the remaining term of this Agreement shall be
twenty-four (24) months. If Executive is also a director then he
shall abstain from any and all voting with respect to the renewal
or extension of the term of this Agreement.
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2.
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PAYMENTS TO
EXECUTIVE UPON CHANGE IN CONTROL AND TERMINATION
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This Agreement provides for certain
payments and benefits to Executive only in the event of a Change in
Control followed by a termination of Executive’s services as
described in this Agreement.
(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 Involuntary
Termination of Executive’s employment, other than Termination
for Cause, death or Disability of Executive, the
Bank shall be obligated to pay or provide
Executive or in the following event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may
be:
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(i)
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Within thirty
(30) days of Executive’s Involuntary Termination, (or if
Section 409A of the Internal Revenue Code (“Code”)
applies, on the first day of the seventh month following
Executive’s Involuntary Termination), as severance pay, a sum
equal to two times the sum of (a) the highest rate of base salary,
and (b) highest rate of bonus awarded to Executive during the prior
three years. If Executive has been employed by the Bank for less
than one year, then the severance pay shall be a sum equal to
twenty-four (24) times the highest monthly salary, and two times
the highest rate of bonus awarded to Executive.
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(ii)
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life, medical
and dental coverage (at the expense of the Bank) substantially
identical to the coverage maintained by the Bank for Executive
prior to his termination. Such coverage and payments shall cease
upon expiration of twenty-four (24) months.
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(iii)
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Within thirty
(30) days following Executive’s Involuntary Termination (or
if Code Section 409A applies, on the first day of the seventh month
following Executive’s Involuntary Termination), a lump sum
payment in an amount equal to the present value of the Bank’s
contributions that would have been made on his behalf under each of
the Bank’s 401(k) Plan and employee stock ownership plan (and
any other defined contribution plan maintained by the Bank in which
Executive participates) if he had continued working for the Bank
for a twenty-four (24) month period following his termination
earning the Base Salary that would have been achieved during the
remaining unexpired term of this Agreement and making the maximum
amount of employee contributions permitted, if any, under such plan
or plans, where such present values are to be determined using a
discount rate of 6%.
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(b) Upon the occurrence of a Change
in Control, Executive will have such rights as specified in any
other employee benefit plan with respect to options, stock awards
or other stock incentives and such other rights as may have been
granted to Executive under such plans.
(c) Any payments to Executive under
this Section 2 (other than payments under Section 2(a)(ii)) should
be made in a lump sum and reduced by applicable withholding
taxes.
(d) Notwithstanding the preceding
paragraphs of this Section 2, 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 in order 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. In addition, in no event shall
the aggregate
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Termination Benefits to be made or approved to
Executive ever exceed three (3) times “average annual
compensation” as such Term is defined in OTS Regulatory
Handbook Section 310 (Oversight by the Board of
Directors).
(e) Executive shall not have the
right to receive termination benefits pursuant to Section 2 hereof
in the event of Executive’s Termination for Cause or
termination of employment due to Executive’s death or
Disability.
The following capitalized terms used
in this Agreement are defined as set forth below:
(a) Change in Control. A
“Change in Control” of the Bank or the Company shall
mean a change in control of a nature that: (i) would be required to
be reported in response to Item 5.01 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 Bank or
the Company within the meaning of the Home Owners’ Loan Act,
as amended, and applicable rules and regulations promulgated
thereunder (collectively, the “HOLA”) as in effect at
the time of the Change in Control; or (iii) 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 Company
representing 25% or more of the combined voting power of
Company’s outstanding securities, except for any securities
purchased by the Bank’s employee stock ownership plan or
trust; or (b) individuals who constitute the Board on the date
hereof (the “Incumbent Board”) 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 of the
directors comprising the Incumbent Board, or whose nomination for
election by the 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 Bank or the Company or similar transaction in which the Bank
or Company is not the surviving institution occurs or is effected;
or (d) a proxy statement soliciting proxies from stockholders of
the Company is distributed, by someone other than the current
management of the Company, seeking stockholder approval of a plan
of reorganization, merger or consolidation of the Company or
similar transaction with one or more business organizations as a
result of which the outstanding shares of the class of securities
then subject to the plan are to be exchanged for or converted into
cash or property or securities not issued by the Company; or (e) a
tender offer is made for 25% or more of the voting secu
