Exhibit 10.12
SECTION 409A AMENDMENT TO
THE
CHANGE IN CONTROL
AGREEMENT
WHEREAS, David T.
Weston (the
“Executive”) entered into a change in control agreement
with the Savings Institute Bank and Trust Company (the
“Bank”) and SI Financial Group, Inc. (the
“Company”) as guarantor, effective September 30,
2004 (the “Agreement”); and
WHEREAS, the parties to the Agreement desire to amend the
Agreement to comply with Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and the
regulations and guidance issued with respect to 409A of the Code;
and
WHEREAS, Section 8 of the Agreement provides that
the Agreement may be amended or modified at any time by means of a
written instrument signed by the parties.
NOW, THEREFORE,
the Bank, the Company and the
Executive agree to amend the Agreement effective December 17,
2008 as follows:
FIRST CHANGE
The following new Section 17
shall be added to the Agreement:
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“17.
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SECTION 409A
OF THE CODE.
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(a) This Agreement is intended to
comply with the requirements of Section 409A of the Code, and
specifically, with the “short-term deferral exception”
under Treasury Regulation Section 1.409A-1(b)(4) and the
“separation pay exception” under Treasury Regulation
Section 1.409A-1(b)(9)(iii), and shall in all respects be
administered in accordance with Section 409A of the Code. If
any payment or benefit hereunder cannot be provided or made at the
time specified herein without incurring sanctions on Executive
under Section 409A of the Code, then such payment or benefit
shall be provided in full at the earliest time thereafter when such
sanctions will not be imposed. For purposes of Section 409A of
the Code, all payments to be made upon a termination of employment
under this Agreement may only be made upon a “separation from
service” (within the meaning of such term under
Section 409A of the Code), each payment made under this
Agreement shall be treated as a separate payment, the right to a
series of installment payments under this Agreement (if any) is to
be treated as a right to a series of separate payments, and if a
payment is not made by the designated payment date under this
Agreement, the payment shall be made by December 31 of the
calendar year in which the designated date occurs. To the extent
that any payment provided for hereunder would be subject to
additional tax under Section 409A of the Code, or would cause
the administration of this Agreement to fail to satisfy the
requirements of Section 409A of the Code, such provision shall
be deemed null and void to the extent permitted by applicable law,
and any such amount shall be payable in accordance with
subparagraph (b) of this Agreement below. In no event shall
Executive, directly or indirectly, designate the calendar year of
payment.
(b) If when separation from service
occurs Executive is a “specified employee” within the
meaning of Section 409A of the Code, and if the cash severance
payment under Section 3(a)(i) of this Agreement would be
considered deferred compensation under Section 409A of the
Code, and, finally, if an exemption from the six-month delay
requirement of Section 409A(a)(2)(B)(i) of the Code is not
available (i.e., the “short-term deferral exception”
under Treasury Regulations Section 1.409A-1(b)(4) or the
“separation pay exception” under Treasury
Section 1.409A-1(b)(9)(iii)), the Bank or the
Company
will make the maximum severance payment possible
in order to comply with an exception from the six month requirement
and make any remaining severance payment under Section 3(a)(i)
of this Agreement to Executive in a single lump sum without
interest on the first payroll date that occurs after the date that
is six (6) months after the date on which Executive separates
from service.
(c) If (x) under the terms of
the applicable policy or policies for the insurance or other
benefits specified in Section 3(a)(ii) of this Agreement it is
not possible to continue coverage for Executive and his dependents,
or (y) when a separation from service occurs Executive is a
“specified employee” within the meaning of
Section 409A of the Code, and if any of the continued
insurance coverage or other benefits specified in
Section 3(a)(ii) of this Agreement would be considered
deferred compensation under Section 409A of the Code, and,
finally, if an exemption from the six-month delay requirement of
Section 409A(a)(2)(B)(i) of the Code is not available for that
particular insurance or other benefit, the Bank or the Company
shall pay to Executive in a single lump sum an amount in cash equal
to the present value of the Bank’s projected cost to maintain
that particular insurance benefit had Executive’s employment
not terminated. The lump-sum payment shall be made thirty
(30) days after employment termination or, if
Section 17(b) of this Agreement applies, on the first payroll
date that occurs after the date that is six (6) months after
the date on which Executive separates from service.
(d) References in this Agreement to
Section 409A of the Code include rules, regulations, and
guidance of general application issued by the Department of the
Treasury under Internal Revenue Section 409A of the
Code.”
SECOND CHANGE
Section 2(a) of the Agreement
shall be amended by adding the following paragraph to the end
thereof:
“In the event Executive elects
to voluntarily terminate his employment for Good Reason in
accordance with this Section 2(a), he must notify the Bank
within ninety (90) days after the initial existence of an
event that qualifies as Good Reason and the Bank must be given an
opportunity, not less than thirty (30) days, to effectuate a
cure for such asserted “Good Reason” by the
Executive.”
2
IN WITNESS WHEREOF,
the Bank and the Company has caused
this Amendment to be executed by its duly authorized officers, and
the Executive has signed this Amendment, on the 17th day of
December, 2008
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ATTEST:
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SAVINGS INSTITUTE BANK AND
TRUST COMPANY
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For the Board
of Directors
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ATTEST:
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SI FINANCIAL
GROUP, INC.
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(as
guarantor)
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For the Board
of Directors
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WITNESS:
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EXECUTIVE
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3
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, David T. Weston (“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:
(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.
(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
dispo
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