Exhibit 10.13
SAVINGS INSTITUTE BANK AND TRUST
COMPANY
CHANGE IN CONTROL
AGREEMENT
This AGREEMENT
(“Agreement”) is hereby entered into as of
September 30, 2004, by and between Savings Institute Bank
and Trust Company (the “Bank”), a
federally-chartered savings bank with its principal offices at 803
Main Street, Willimantic, Connecticut 06226, Laurie L.
Gervais (“Executive”) and SI Financial Group,
Inc. (the “Company”), a federally-chartered
corporation and the holding company of the Bank, as
guarantor.
WHEREAS, the Bank recognizes the
importance of Executive to the Bank’s operations and wishes
to protect his 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 Board of
Directors of the Bank desire to enter into an 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.
NOW, THEREFORE, in consideration of
the promises and mutual covenants herein contained, it is hereby
agreed as follows:
1. Term of
Agreement.
(a) The term of this Agreement shall
be (i) the initial term, consisting of the period commencing
on the date of this Agreement (the “Effective Date”)
and ending on the second anniversary of the Effective Date, plus
(ii) any and all extensions of the initial term made pursuant
to this Section 1.
(b) Commencing on the first
anniversary of the Effective Date and continuing each anniversary
date thereafter, the Board of Directors of the Bank (the
“Board of Directors”) may extend the term of this
Agreement for an additional one (1) year period beyond the
then effective expiration date, provided that Executive shall not
have given at least sixty (60) days’ written notice of
his desire that the term not be extended.
(c) 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.
2. 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 his employment at
any time during the term of this Agreement following an event
constituting “Good Reason.”
1
“Good Reason” means,
unless Executive has consented in writing thereto, the occurrence
following a Change in Control, of any of the following:
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(i)
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the assignment
to Executive of any duties materially inconsistent with
Executive’s position, including any material change in
status, title, authority, duties or responsibilities or any other
action that results in a material diminution in such status, title,
authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad
faith and that is remedied by the Bank or Executive’s
employer reasonably promptly after receipt of notice thereof given
by the Executive;
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(ii)
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a reduction by
the Bank or Executive’s employer of the Executive’s
base salary in effect immediately prior to the Change in
Control;
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(iii)
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the relocation
of the Executive’s office to a location more than twenty-five
(25) miles from its location as of the date of this
Agreement;
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(iv)
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the taking of
any action by the Bank or any of its affiliates or successors that
would materially adversely affect the Executive’s overall
compensation and benefits package, unless such changes to the
compensation and benefits package are made on a non-discriminatory
basis to all employees; or
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(v)
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the failure of
the Bank or the affiliate of the Bank by which Executive is
employed, or any affiliate that directly or indirectly owns or
controls any affiliate by which Executive is employed, to obtain
the assumption in writing of the Bank’s obligation to perform
this Agreement by any successor to all or substantially all of the
assets of the Bank or such affiliate within thirty (30) days
after a reorganization, merger, consolidation, sale or other
disposition of assets of the Bank or such affiliate.
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(b) For purposes of this Agreement,
a “Change in Control” shall be deemed to occur on the
earliest of any of the following events:
(i) Merger : The Company
merges into or consolidates with another corporation, or merges
another corporation into the Company, 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 immediately before the merger
or consolidation.
(ii) Acquisition of Significant
Share Ownership : There is filed or required to be filed a
report on Schedule 13D or another form or schedule (other
than
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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.
(iii) Change in Board
Composition : During any period of two consecutive years,
individuals who constitute 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 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
(iv) Sale of Assets : The
Company sells to a third party all or substantially all of its
assets.
Notwithstanding anything in this
Agreement to the contrary, in no event shall the reorganization of
the Bank from the mutual holding company form of organization to
the full stock holding company form of organization (including the
elimination of the mutual holding company) constitute a
“Change in Control” for purposes of this
Agreement.
(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 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 him a
copy of a resolution duly adopted by the affirmative vote of a
majority of the entire membership of the Board of Directors 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 un
