Exhibit 10.3
FORM OF
THE FIRST NATIONAL BANK OF LITCHFIELD
FIRST AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This First Amendment
and Restatement
to the Supplemental Executive
Retirement Agreement (this "Agreement") dated as of and effective
the 1st day of
January, 2006 (this "Agreement"), is made the 20th day of November,
2008 by and
between THE FIRST
NATIONAL BANK OF
LITCHFIELD, a bank
organized and
existing
under the national
banking laws of the
United States of
America with its main
office located at 13 North Street, Litchfield, Connecticut, 06759 (the "Bank")
and ___________, whose mailing address is __________________ (the
"Executive").
Whereas, the Executive
has been and continues to be a valued executive
of the Bank;
Whereas,
the
Executive
has
performed
his duties
as
______________________ in a capable and efficient manner; and
Whereas, the Bank
wishes to ensure the continued loyalty and services
of the Executive by providing him with deferred compensation,
Now, therefore,
in consideration of the foregoing premises and the
services to be
performed in the future as well as the mutual
covenants and
promises herein
contained,
it is agreed that this
Agreement is hereby entered
into as follows:
In consideration of
the mutual covenants herein contained and implied,
the sufficiency
of which is acknowledged by each party, the Bank and the
Executive agree as follows:
1. Definitions.
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(a) "Accrued
Benefit" means the gross annual payment equal to
twenty-five percent
(25%) of the Executive's Final Average Compensation
multiplied by the
Executive's
Non-forfeitable
Percentage set forth in Section
2(b).
(b) "Actuarial
Equivalent" means a benefit of equivalent value when
computed on the basis of the applicable interest rate, for purposes of Code
Section
417(e)(3)(A)(ii)(II),
for November of the calendar year preceding the
year in which the Executive separates from service, and the mortality table set
forth in Treas. Reg. ss.1.401(a)(9)-9.
(c) "Cause" means the following:
(i) the commission
by the Executive of any crime
involving
deceit, dishonesty or
fraud with regard to the Bank or its business, or moral
turpitude of such a nature as would adversely affect the reputation
of the Bank;
(ii) the commission by the Executive of a material act or acts
of dishonesty in connection with the performance of the Executive's duties to
the Bank including, without limitation, misappropriation of funds
or property;
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(iii) an act or acts of misconduct (including sexual
harassment) by the Executive;
(iv) continued
willful non-performance by the Executive of
duties (other than by reason of illness or disability) which has continued for
more than five (5) days following written notice of non-performance from the
Board of Directors (or Executive Committee); or
(v) the entry of a final cease and desist order with respect
to safety and
soundness violations
by any federal or state regulatory agency
having jurisdiction over the Bank, or the suspension, removal or termination of
the employment
of the Executive pursuant to an order by any
federal or state
regulatory agency
having jurisdiction
over the Bank, so long as any such order
is determined
in the sole
discretion
of the Board of
Directors to relate
to
matters within the conduct or sphere of supervisory authority of
the Executive.
The determination
of whether the Executive's employment shall be
terminated for Cause shall be made at a meeting of the Board of
Directors called
and held for such
purpose, at which
meeting the Board of Directors makes a
finding that in the
good faith opinion of
the Board of Directors
an event set
forth in subclauses (i) through (v) has occurred and specifying the
particulars
thereof in detail.
(d) "100% Non-forfeitable Benefit" means the Accrued Benefit,
determined with a non-forfeitable interest equal to 100%.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from
time to time.
(f) "Effective Date" means January 1, 2006.
(g) "Final
Average
Compensation"
means
the average of the
Executive's annual
base salary (prior to any salary reduction contributions to
any Section
401(k), 125 or 132 plan) and bonuses
received by the Executive
during the thirty-six
(36) month period
ending on December 31
of the calendar
year immediately
preceding the Executive's separation from employment with
the
Bank. Without limiting the foregoing, salary and bonus payments received
during
such 36-month period
but attributable to an
earlier period shall be considered
under the preceding
sentence; and amounts received after such period but
attributable to services rendered during such period shall not be
considered.
(h)
"Hour of Service"
means each hour for
which the Executive
is
paid or entitled to be
paid for the
performance of duties
for the Bank or for
non-performance of duties (irrespective of whether the
employment
relationship
has terminated)
due to vacation, holiday, illness, incapacity, jury duty,
military duty or approved paid leave of absence.
(i) "Normal Form" means a lump sum distribution.
(j) "Year of Service"
means each period of twelve (12) consecutive
months commencing January 1, 2004 and each anniversary thereof during which the
Executive is credited
with at least 1,000 Hours of Service, including all such
twelve (12) month
periods prior to the Effective Date of this Agreement. The
Executive shall accrue
a Year of Service for all purposes hereunder if, in
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the Executive's
final year of employment with the Bank, the Executive is
credited with at least 1,000 Hours of Service.
2. Payments to Executive.
---------------------
(a) If the Executive remains continuously employed by the Bank
until
his termination
of employment
on or after
completion of eleven
(11) Years of
Service, the
Bank will pay to the Executive a gross amount equal to the
Actuarial Equivalent
of (i) the Accrued Benefit, multiplied by (ii) the number
of whole years by which the Executive's life expectancy in years upon
termination from employment (determined under the 1994 Group Annuity
Reserving
Table) exceeds the Executive's age in years as of such
employment
termination
date. Said gross
benefit amount will be paid in the Normal
Form, subject to
applicable withholding, and shall be payable on the date which is
six (6) months
after the Executive's employment with the Bank terminates or as soon as
practicable thereafter.
(b) The Executive's
benefits under this Agreement shall become
non-forfeitable in
accordance
with the following schedule, subject to the
possible adjustments
referenced
in Sections 2(c) and Section 15 of this
Agreement; provided,
however, that all benefits payable hereunder shall be
forfeited upon a termination from employment for Cause:
Years of Service
Non-forfeitable Percentage
----------------
--------------------------
1 or less
0%
2
10%
3
20%
4
30%
5
40%
6
50%
7
60%
8
70%
9
80%
10
90%
11 or more
100%
(c) If the Executive's
benefits under this Agreement become payable
upon the Executive's
separation
from service before the Executive's 62nd
birthday for reasons
other than Cause,
Change in Control,
death or disability
pursuant to Sections 3 or 4 hereof, as applicable, then the gross amount of the
Executive's benefit
under shall be determined in accordance with Section 2(a),
provided that the
Accrued Benefit shall be reduced by 3.0% for each year
benefits commence
before the
Executive's
62nd birthday. The foregoing 3.0%
reduction shall be pro-rated for a partial year.
(d) In lieu of the Normal Form provided by Section 2(a), with the
written consent of the
Board of Directors of the Bank, the Executive may elect,
not less than twelve (12) months prior to the date on which the
first payment is
to commence,
an optional form of monthly payments which are the Actuarial
Equivalent of the
Normal Form to which the Executive is entitled; provided,
however, that in the
case of an
election related to a payment not made on
account of the Executive's disability (as defined in Section 4
hereof) or death,
the payment(s) to be
made
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with respect to such
election shall be deferred for a period of
not less than
five (5) years from the date such payment(s) would otherwise have been made
and
may not be made less than twelve (12) months prior to the date that the
first
scheduled payment would have been made in the Normal Form.
(e) Notwithstanding
anything to the
contrary herein
contained or
implied, in no event
shall the Executive
be entitled to receive
any benefits
under this Agreement if he is terminated by the Bank for Cause.
3. Death of the Executive.
----------------------
(a) If the Executive
dies while employed by the Bank, the Bank will
pay to the Executive's surviving spouse the Executive's Accrued
Benefit assuming
that the Executive had retired the day before his death with a 100%
Non-forfeitable Benefit. The surviving spouse shall receive the
death benefit in
a lump sum within
thirty (30) days of the death of the Executive or as soon as
practicable thereafter. If the Executive leaves no
surviving spouse, his estate
shall receive the present value of the Executive's Accrued Benefit computed on
the basis of the applicable interest rate, for purposes of Code Section
417(e)(3)(A)(ii)(II), for the month preceding the date
