Exhibit 10.3
VALLEY BANK
TWO YEAR CHANGE IN CONTROL
AGREEMENT
This AGREEMENT
(“Agreement”) is hereby entered into as November 21,
2006, by and between VALLEY BANK, a commercial bank
organized and existing by virtue of the laws of the State of
Connecticut (the “Bank”) with its principal place of
business at Four Riverside Avenue, Bristol, Connecticut 06011, and
ANTHONY M. MATTIOLI (“Executive”). This
Agreement will be effective as of the date of consummation of the
transaction (the “Effective Date”) contemplated in the
Agreement and Plan of Merger by and between New England Bancshares,
Inc., New England Bancshares Acquisition, Inc. and First Valley
Bancorp, Inc. dated November 21, 2006 (the “Merger”).
For purposes of this Agreement, references to the Company shall
mean NEW ENGLAND BANCSHARES, INC.
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 for the period provided for in this Agreement; and
WHEREAS , Executive and the Board of Directors of the
Bank (the “Board”) 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.
WHEREAS , Executive acknowledges upon execution of this
Agreement and consummation of the Merger, he will not be entitled
to any benefits provided under the Change in Control Agreement by
and between the Bank and Executive dated October 1,
2004.
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 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) The term of this Agreement shall
be extended for one day each day so that a constant twenty-four
(24) calendar month term shall remain in effect, until such
time as the Board or Executive elects not to extend the term of the
Agreement by giving written notice to the other party in accordance
with the terms of this Agreement, in which case the term of this
Agreement shall be fixed and shall end on the second anniversary of
the date of such written notice.
(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.
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2. Change in Control.
(a) Upon the occurrence of a Change
in Control (as defined in Section 2(b) of this Agreement)
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 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.”
“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 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 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
(20) 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 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 of the Bank;
or
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(v)
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the failure of
the Bank 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 within thirty
(30) days after a reorganization, merger, consolidation, sale
or other disposition of assets of the Bank.
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(b) For purposes of this Agreement,
a “Change in Control” shall be deemed to occur on the
earliest of the following events:
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(i)
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Any person
shall become the beneficial owner, directly or indirectly, of
securities representing twenty percent (20%) or more of the
combined voting power of the then outstanding securities of the
Company or the Bank (as used in this subparagraph (i)), the term
“beneficial ownership” shall have the meaning ascribed
to that term from time to time under the
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rules and regulations promulgated by
the Federal Deposit Insurance Corporation (“FDIC”)
(currently codified as 12 C.F.R. Section 335.403 or any
similar, successor statute and rules); a “person” shall
include any natural person, corporation, partnership, trust,
association or any group of persons, whose ownership of the
Company’s or the Bank’s securities would be required to
be reported collectively pursuant to rules and regulations of the
FDIC; and “affiliate” shall mean a person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the
person specified, pursuant to the rules and regulations of the
FDIC.
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(ii)
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The Bank or the
Company shall be a party to any merger or consolidation with
another corporation, association or business entity, which merger
or consolidation shall be consummated or shall sell, exchange or
transfer all or substantially all of its respective assets to some
other person (as “person” is defined in subparagraph
(i), above), except in any such case in a transaction in which
immediately after such merger or consolidation or such sale,
exchange or transfer, the shareholders of the Bank or the Company,
in their capacities as such and as a result thereof, shall own at
least fifty percent (50%) in voting power of the then
outstanding securities of the Bank or the Company or of any
surviving corporation or business entity pursuant to any such
merger (or of its parent), the consolidated corporation or business
entity in any such consolidation or of all the persons or their
parents to which such sale, exchange of transfer of assets is made;
or
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(iii)
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During the
period of one year, individuals who at the beginning of any such
period constitute the Directors of the Bank or the Company shall
have ceased for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by the
Bank’s or the Company’s shareholders, of each new
director of the Bank or the Company was approved by a vote of at
least two-thirds of the Directors of the Bank or the Company (as
applicable) then still in office who were Directors of the Bank at
the beginning of such period, provided, that a majority is composed
of Directors who were Directors before the occurrence of an event
which would otherwise constitute a Change in Control (the
“Continuing Directors”), together with any Directors
whose election was approved by a majority of the Continuing
Directors in office at that time, may specifically determine in the
good faith exercise of their judgment that such event does not
constitute a Change in Control because it is not likely to change
the existing management, personnel or management policies of the
Bank or the Company.
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Notwithstanding the foregoing, a
merger or combination of Valley Bank with or into En
