Exhibit 10.10
BROOKLINE BANCORP, INC.
BROOKLINE BANK
EMPLOYMENT AGREEMENT
This
Agreement is made effective as of March 16, 2009 (the
“Effective Date”) by and between Brookline Bancorp,
Inc. (the “Company”), a Delaware corporation, and
Brookline Bank (the “Bank”), a United States-chartered
stock savings bank, each with its principal administrative office
at 160 Washington Street, Brookline, Massachusetts 02445 and Paul
A. Perrault (the “Executive”).
WHEREAS, the Company and the Bank (each an
“Employer”) wish to obtain the services of Executive as
provided in this Agreement and any renewal hereof (the
“Agreement”); and
WHEREAS, Executive is willing to serve in the
employ of the Company and Bank on a full-time basis as provided in
this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter
provided, the parties hereby agree as follows:
1. POSITION
AND RESPONSIBILITIES
During
the period of his employment hereunder, Executive agrees to serve
as President of the Company and Chairman and Chief Executive
Officer of the Bank effective from March 16, 2009 and Chief
Executive Officer of the Company effective from April 16,
2009. During said period, Executive also agrees to
serve, if elected or appointed, as an officer or director of any
subsidiary or affiliate of the Company or the
Bank. Failure to reelect Executive to any of the
foregoing offices after April 16, 2009 without the consent of the
Executive during the term of this Agreement shall constitute a
breach of this Agreement.
2. TERMS
AND DUTIES
(a) The
period of Executive’s employment under this Agreement shall
begin as of the date first above written and shall continue for a
period of twelve (12) full calendar months
thereafter. Commencing on the first anniversary date of
this Agreement, and continuing at each anniversary date thereafter,
the Agreement shall renew for an additional year unless written
notice is provided to Executive at least sixty (60) days prior to
any such anniversary date, that his employment shall cease at such
anniversary date. Prior to each notice period for
non-renewal, and assuming the Board of Directors of the Bank
(“Board”) has determined not to send a non-renewal
notice to the Executive, the disinterested members of the Board
will conduct a comprehensive performance evaluation and review of
the Executive for purposes of determining whether to extend the
Agreement, and the results thereof shall be included in the minutes
of the Board’s meeting.
(b) During
the period of his employment hereunder, except for periods of
absence occasioned by illness, vacation periods not to exceed six
(6) weeks in the aggregate per year and leaves of absence granted
by the Board, Executive shall faithfully perform his duties
hereunder including activities and services related to the
organization, operation and management of the Bank.
3. COMPENSATION
AND REIMBURSEMENT
(a) The
compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b).
The Bank shall pay Executive as compensation an annualized salary
of not less than $600,000 per year (“Base
Salary”). Such Base Salary shall be payable
biweekly. During the period of this Agreement,
Executive’s Base Salary shall be reviewed at least annually;
the first such review will be made no later than January 31,
2010. Such review shall be conducted by a Committee
designated by the Board, and the Board may increase, but not
decrease, Executive’s Base Salary (any increase in Base
Salary shall become the “Base Salary” for purposes of
this Agreement).
(b) The
Bank shall also pay the Executive incentive compensation
(“Bonus”) for each year of up to 30% of Base Salary for
the achievement of certain goals for the year established by the
Board in its discretion relating to the enhancement of shareholder
value as provided for in the Company’s short-term incentive
plan. Bonus for any year shall be paid in a lump sum as provided in
such plan.
(c) In
addition to the foregoing, the Executive shall be entitled to the
following equity consideration upon the Effective Date and each
anniversary thereof (“Equity Award”) during the term of
this Agreement.
Stock Options
. Under the
Company’s 2003 Stock Option Plan, a grant of options for
Company Common Stock exercisable at fair market value as of such
grant for a number of shares equal to a cost/expense recognition of
$120,000 to the Company using the Black-Scholes model.
Restricted Stock
. Under the
Company’s 2003 Recognition and Retention Plan, an award of
restricted shares of Company Common Stock having a value/expense
recognition to the Company of $80,000 at fair market value as of
such award without discount.
The
stock options granted hereunder shall vest one half upon grant and
one half upon the first anniversary of the grant. The
restricted stock shall vest 100% upon the first anniversary of
Executive’s award. The restricted stock when
vested shall not be transferred by the Executive before the
earliest to occur of termination of employment hereunder or a
Change in Control. The cost/expense recognition to the Company of
the stock options and value of stock awards ( i.e .
initially $200,000) per year shall be the “Equity
Consideration” for the purposes of this Agreement. During the
period of this Agreement, Executive’s Equity Consideration
shall be reviewed at least annually, and the first such review will
be made no later than January 31, 2010. Such review
shall be conducted by a Committee designated by the Board, and the
Board may increase but not decrease the Executive’s Equity
Consideration (any increase in Equity Consideration shall become
the “Equity Consideration” for purposes of this
Agreement).
(d) In
addition to the Base Salary, Bonus and Equity Award provided in
this Section 3, the Bank shall provide Executive at no cost to
Executive with all such other benefits as are generally provided to
regular full-time employees of the Company and Bank. Executive will
be entitled to participate in or receive benefits under any
employee benefit plans including but not limited to, retirement
plans, supplemental retirement plans, perquisites, pension plans,
profit-sharing plans, employee stock ownership plans,
health-and-accident plans, medical coverage or any other employee
benefit plan or arrangement made available by the Company or the
Bank in the future to its senior executives and key management
employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and
arrangements. If the Company or Bank establishes
incentive compensation or bonus plans in addition to the Bonus
contemplated by Section 3(b) of this Agreement, subject to the
discretion of the Board, Executive will be entitled to incentive
compensation and bonuses as provided in any such plan of the
Company or Bank in which Executive is eligible to participate (and
he shall be entitled to a pro rata distribution under any such
incentive compensation or bonus plan as to any year in which a
termination of employment occurs, other than Termination for
Cause). Nothing paid to the Executive under any such
plan or arrangement will be deemed to be in lieu of other
compensation to which the Executive is entitled under this
Agreement.
(e) In
addition to the Base Salary, the Bonus and the Equity Award
provided for by Section 3 (a), (b) and (c) of this Agreement, the
Company or the Bank shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by
Executive performing his obligations under this Agreement
(including but not limited to dues for up to two Clubs in the
Company’s and the Bank’s market area to be used for
business meetings or for business development purposes), subject to
the submission of supporting documentation in accordance with
Company or Bank policy, and may provide such additional payments in
such form and such amounts as the Board may from time to time
determine. Further, the Company or the Bank will make available to
the Executive a suitable car to be used for business
purposes.
(f) Additionally,
the Company or Bank will reimburse, subject to the submission of
supporting documentation in accordance with Company or Bank policy,
the Executive for out-of-pocket expenses incurred by the Executive
in connection with Executive’s movement of his domicile from
Shelburne, Vermont to Boston up to an amount of $20,000 and will
further reimburse the Executive for expenses relating to
Executive’s temporary rental of a furnished apartment in the
Boston area for six months in an amount not to exceed
$25,000.
(g) The
Executive shall not be entitled to receive fees for serving as a
director of the Company or the Bank or as a director or officer of
any affiliate or subsidiary.
4. PAYMENTS
TO EXECUTIVE UPON AN EVENT OF TERMINATION
The
provisions of this Section shall in all respects be subject to the
terms and conditions stated in Sections 8 and 9.
(a) The
provisions of this Section shall apply upon the occurrence of an
Event of Termination. As used in this Agreement, an
“Event of Termination” shall mean and include any one
or more of the following:
(i) the
termination by the Company or the Bank of Executive’s full
time employment hereunder (including without limitation due to a
non-renewal pursuant to Section 2(a)) for any reason other than (A)
Disability or Retirement, as defined in Section 5 below, or (B)
Termination for Cause as defined in Section 6 hereof; or
(ii) Executive’s
resignation from the Bank’s employ, upon any
(A) failure
to elect or reelect or to appoint or reappoint Executive to any of
the offices specified in Section 1;
(B) material
change in Executive’s function, duties, or responsibilities,
which change would cause Executive’s position to become one
of lesser responsibility, importance, or scope from the position
and attributes thereof described in Section 1 above;
(C) a
relocation of Executive’s principal place of employment by
more than 30 miles from its location at the effective date of this
Agreement, or a material reduction in the benefits and perquisites
to the Executive from those being provided as of the effective date
of this Agreement;
(D) liquidation
or dissolution of the Company or the Bank other than liquidations
or dissolutions that are caused by reorganizations that do not
affect the status of Executive; or
(E) breach
of this Agreement by the Company or the Bank.
(iii) Upon the
occurrence of any event described in clauses (ii) (A), (B), (C),
(D) or (E) above, Executive shall have the right to elect to
terminate his employment under this Agreement by resignation upon
sixty (60) days prior written notice given within a reasonable
period of time not to exceed three calendar months after the
initial event giving rise to said right to
elect. Notwithstanding the preceding sentence, in the
event of a continuing breach of this Agreement by the Company or
the Bank, the Executive, after giving due notice within the
prescribed time frame of an initial event specified above, shall
not waive any of his rights solely under this Agreement and this
Section 4 by virtue of the fact that Executive has submitted his
resignation but has remained in the employment of the Company or
the Bank and is engaged in good faith discussions to resolve any
occurrence of an event described in clauses (A), (B), (C), (D) and
(E) above. In the event that, within sixty (60) days of
receiving Executive’s notice pursuant to this paragraph, the
Bank “cures” any of the events described in clauses
(ii) (A), (B) or (E) above, Executive’s right to resign
pursuant to this paragraph shall terminate and his notice shall be
of no further force or effect.
(b) The
provisions of this Section 4(b) and 4(d) shall apply upon the
occurrence of a Change in Control during the term of this
Agreement. In the event of a Change in Control of the
Company or the Bank as described in Paragraphs 1, 2 or 3 below,
Executive shall be entitled to the payments set forth in Section
4(d) hereof. For purposes of this Section 4(b), a Change
in Control of the Company or the Bank shall mean (i) a change in
ownership of the Company or the Bank under paragraph (1) below,
(ii) a change in effective control of the Company or the Bank under
paragraph (2) below, or (iii) a change in the ownership of a
substantial portion of the assets of the Company or the Bank under
paragraph (3) below.
(1) Change
in the ownership of the Company or the Bank. A change in the
ownership of the Company or the Bank shall occur on the date that
any one person, or more than one person acting as a group (as
defined in Treasury Regulation Section 1.409A-3(j)(5)(v)(B) or
subsequent guidance), acquires ownership of stock of the Company or
the Bank that, together with stock held by such person or group,
constitutes more than 50 percent of the total fair market value or
total voting power of the stock of the Company or the Bank, as
determined in accordance with Treasury Regulation Section
1.409A-3(i)(5)(v)(A).
(2) Change
in the effective control of the Company or the Bank. A
change in the effective control of the Company or the Bank shall
occur on the date that either (i) any one person, or more than one
person acting as a group (as defined in Treasury Regulation Section
1.409A-3(i)(5)(v)(B) or subsequent guidance), acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of
the Company or the Bank possessing 35 percent or more of the total
voting power of the stock of the Company or the bank; or (ii) a
majority of members of the Company’s or the Bank’s
Board of Directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a
majority of the members of the Company’s or the Bank’s
Board of Directors prior to the date of the appointment or
election, each as determined in accordance with Treasury Regulation
Section 1.409A-3(i)(5)(vi), provided that subsection (ii) is
inapplicable where a majority shareholder of the Company or the
Bank, respectively, is another corporation.
(3) Change
in the ownership of a substantial portion of the Company’s or
the Bank’s assets. A change in the ownership of a
substantial portion of the Company or the Bank’s assets shall
occur on the date that any one person, or more than one person
acting as a group (as defined in Proposed Treasury Regulation
Section 1.409A-3(i)(5)(v)(B) or subsequent guidance), acquires (or
has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) assets from the
Company or the Bank that have a total gross fair market value equal
to or more than 40 percent of the total gross fair market value of
(i) all of the assets of the Company or the Bank, or (ii) the value
of the assets being disposed of, either of which is determined
without regard to any liabilities associated with such assets, as
determined in accordance with Treasury Regulation Section
1.409A-3(i)(5)(vii).
(4) For
purposes of (1) through (3) above, the definition of Change in
Control shall be construed to be consistent with the requirements
of Treasury Regulation Section 1.409A-3(i) or subsequent
guidance.
(c) Upon
the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 7, the Bank shall pay Executive,
or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay
or liquidated damages, or both, an amount equal to the sum of (i)
Base Salary, (ii) the highest Bonus awarded to the Executive during
the prior three years, or if an Event of Termination occurs before
the first Bonus hereunder has been determined under Section 3(b),
then a deemed bonus of the highest amount of Bonus the Executive
could have potentially earned hereunder, and (iii) the highest
Equity Consideration previously awarded hereunder for any
year.
(d) Upon
the occurrence of a Change in Control, as defined in Section
4(b)(1), (2) and (3), the Bank shall pay to Executive, or, in the
event of his death during the term of this Agreement but subsequent
to a Change in Control, to his beneficiary or beneficiaries, or his
estate, as the case may be, as severance pay or liquidated damages,
or both, a sum equal to three (3) times the sum of (i) Base Salary,
(ii) the highest Bonus awarded to Executive during the prior three
years, or if a Change in Control occurs before the first Bonus
hereunder has been determined as contemplated under Section 3(b),
then a deemed bonus of the highest amount of Bonus the Executive
could have potentially earned hereunder, and (iii) the highest
Equity Consideration previously awarded hereunder for any
year. Payment of the amount required hereunder shall be
made in a lump sum on the effective date of the Change in
Control. The payment upon the occurrence of a Change in
Control provided for in this Section 4(d) is in lieu of any payment
upon an Event of Termination provided for in Section
4(a).
(e) (i) Upon
the occurrence of a Change in Control described below which is not
also a Change in Control under Section 4(b), Executive shall have
the right to elect to terminate his employment under this Agreement
on the effective date of, or at any time following such a Change in
Control during the term of this Agreement. Upon the
occurrence of such a termination of employment of the Executive,
the Bank shall pay to Executive, or, in the event of his death
subsequent to his termination of employment, to his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay
or liquidated damages, or both, an amount equal to three (3) times
the sum of (i) Base Salary, (ii) the highest Bonus awarded to
Executive during the prior three years, or if a Change in Control
occurs before the first Bonus hereunder has been determined as
contemplated under Section 3(b), then a deemed bonus of the highest
amount of Bonus the Executive could have potentially earned
hereunder, and (iii) the highest Equity Consideration previously
awarded hereunder for any year. Payment of the amount
required hereunder shall be made in a lump sum on the date of
termination of employment. The payment upon the
occurrence of the Executive’s termination of employment
following a Change in Control described below provided for in this
Section 4(e) is in lieu of any payment upon a Termination of
Employment provided for in Section 4(a) or Section 4(d).
(ii) For
purposes of this Section 4(e), a Change in Control of the Bank or
the Company shall mean a change in control of a nature that: (A)
would be required to be reported in response to Item 5.01(a) 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 (B) results in a change
in control of the Bank or the Company within the meaning of the
Home Owner’s Loan Act, as amended, and applicable rules and
regulations promulgated thereunder, as in effect at the time of the
change in control (or if applicable the Bank Holding Company Act of
1956, as amended and applicable rules and regulations promulgated
thereunder, as in effect at the time of the change in control); or
(C) without limitation such a Change in Control shall be deemed to
have occurred at such time as (I) 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 (II) individuals who constitute the
Board on the Effective Date (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 (III),
considered as though he were a member of the Incumbent Board; or
(IV) 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 (V) a tender offer is made for 25%
or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to
sell their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror.
(f) Upon
the occurrence of an Event of Termination, or a Change in Control
as defined in Section 4(b) or Section 4(e), the Bank will cause to
be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Company
or the Bank for Executive prior to his termination. Such coverage
shall continue until the earlier to occur of (A) 18 months from the
Date of Termination or the Change in Control, or (B) the Executive
receives, in connection with subsequent employment with a third
party, coverage substantially identical to the coverage maintained
by the Company or the Bank.
(g) Notwithstanding
the preceding paragraphs of this Section 4:
(i) if
the aggregate payments and benefits to be made or afforded to
Executive under said paragraphs (the “Termination
Benefits”) would be deemed to include an “excess
parachute payment” under Section 280G of the Internal Revenue
Code of 1986, as amended from time to time (the
“Code”), but
(ii) if the
Termination Benefits were reduced to an amount (the
“Non-Triggering Amount”), the value of which is one
dollar ($1.00) less than an amount equal to the total amount of
payments permissible under Section 280G of the Code or any
successor thereto, then no such “excess parachute
payment” would be deemed to be made, then the Termination
Benefits to be paid to Executive shall be so reduced, but only to
the extent required to be a Non Triggering Amount.
(h) It
shall be a condition of the payment of any amount provided to be
paid to the Executive and the affording of any benefit to the
Executive upon or after termination of the Executive’s
employment under this Agreement that the Executive shall have
signed and delivered to the Company and the Bank a general release
in the form of Exhibit A (except for such modifications as the
Company or the Bank reasonably request as required or advisable to
reflect any changes in applicable law or regulation in effect at
the time such release is delivered), which shall be tendered to the
Executive on the date of Termination.
5. TERMINATION
UPON RETIREMENT, DISABILITY OR DEATH
Termination by the Bank of the Executive based on
“Retirement” shall mean termination in accordance with
the Bank’s retirement policy or in accordance with any
retirement arrangement established with Executive’s consent
with respect to him. Upon termination of Executive upon
Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank and other plans to which Executive is a
party.
In the
event Executive is unable to perform his duties under this
Agreement on a full-time basis for a period of six (6) consecutive
months by reason of illness or other physical or mental disability,
the Employer may terminate this Agreement, provided that the
Employer shall continue to be obligated to pay the Executive his
Base Salary for the remaining term of the Agreement, or one year,
whichever is the longer period of time, and provided further that
any amounts actually paid to Executive pursuant to any disability
insurance or other similar such program which the Employer has
provided or may provide on behalf of its employees or pursuant to
any workman’s or social security disability program shall
reduce the compensation to be paid to the Executive pursuant to
this paragraph.
In the
event of Executive’s death during the term of the Agreement,
his estate, legal representatives or named beneficiaries (as
directed by Executive in writing) shall be paid Executive’s
Base Salary as defined in Paragraph 3(a) at the rate in effect at
the time Executive’s death for a period of one (1) year from
the date of the Executive’s death, and the Employers will
continue to provide medical, dental, family and other benefits
normally provided for an Executive’s family for one (1) year
after the Executive’s death.
6. TERMINATION
FOR CAUSE
The term “Termination for
Cause” shall mean termination because of the
Executive’s personal dishonesty or willful misconduct with
respect to any material matter, any breach of fiduciary duty
involving personal profit, willful and intentional failure to
perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision
of this Agreement. In determining cause, the acts or
omissions shall be measured against standards generally prevailing
in the savings institutions industry. &
