Exhibit 10.5
NEW ENGLAND BANCSHARES, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the "Agreement"), by and
among NEW ENGLAND BANCSHARES, INC., a Maryland corporation
(the "Company"), and
DAVID J. O'CONNOR ("Executive"), is hereby amended and
restated effective as of
November 12, 2008. References to the
"Association" herein shall mean ENFIELD
FEDERAL SAVINGS AND LOAN ASSOCIATION, a wholly owned subsidiary of
the Company.
W I T N E S S E T H
WHEREAS, the Executive
is currently employed as the President and Chief
Executive Officer of the Company pursuant to an employment
agreement between the
Company and the Executive entered into as of December
28, 2005 (the "Original
Agreement");
WHEREAS, the Company desires
to amend and restate the Original Agreement
in order to comply with the final regulations issued
under Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code") in April
2007; and
WHEREAS, the Executive has agreed to
such changes.
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.
Employment. Executive is employed as
the President and Chief
Executive Officer of the Company. Executive shall
perform all duties and shall
have all powers which are commonly incident to
the offices of President and
Chief Executive Officer of the Company or which, consistent
with those offices,
are delegated to him by the Board of Directors of the
Company. During the term
of this Agreement, Executive also agrees to
serve, if elected, as an officer
and/or director of any subsidiary of the Company and in such
capacity carry out
such duties and responsibilities reasonably appropriate to that
office.
2. Location
and Facilities. The Executive will be furnished
with the
working facilities and staff customary for executive officers with
the title and
duties set forth in Section 1 and as are
necessary for him to perform his
duties. The location of such facilities and
staff shall be at the principal
administrative offices of the Company, or at such other site
or sites customary
for such offices.
3. Term.
The period of Executive's employment under this
Agreement shall be
deemed to
have commenced as of the date written above
and shall
continue for a period of thirty-six (36)
full calendar months,
provided, however, that all changes
intended to comply with Code
Section 409A shall be effective retroactively to December
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28, 2005; and provided further, that no
retroactive changes shall
affect the compensation or benefits
previously provided to the
Executive. The term of this Agreement shall be extended for
one day
each day so that a constant thirty-six (36)
calendar month term
shall remain in effect, until such time as the Board of Directors
of
the Company (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 third
anniversary of the date of such written notice.
4. Base
Compensation.
a. The
Company agrees to pay the Executive during
the term of this
Agreement a base salary at the rate of $300,000 per year, payable
in
accordance with customary payroll practices.
b. The Board
shall review annually the rate of the
Executive's base
salary based upon factors they deem relevant, and
may maintain or
increase his salary, provided that no such action shall
reduce the
rate of salary below the rate in effect on the Effective Date.
c. In the absence
of action by the Board, the Executive shall continue
to receive salary at the annual rate specified on the Effective
Date
or, if another rate has been established under
the provisions of
this Section 4, the rate last properly established by action
of the
Board under the provisions of this Section 4.
5.
Bonuses. The Executive shall
be entitled to participate in
discretionary bonuses or other incentive compensation
programs that the Company
may award from time to time to senior management
employees pursuant to bonus
plans or otherwise. Any bonuses or other payments made
pursuant to this Section
5 shall be paid promptly by the Company and in any event no
later than March 15
of the year immediately following the end of the
calendar year for which such
amounts were payable.
6. Benefit
Plans. The Executive shall be entitled to
participate in
such life insurance, medical, dental, pension, profit
sharing, retirement and
stock-based compensation plans and other programs
and arrangements as may be
approved from time to time by the Company and
the Company for the benefit of
their employees.
7. Vacation and
Leave.
a. The
Executive shall be entitled to
vacation and other leave in
accordance with policy for senior
executives, or otherwise as
approved by the Board.
b. In addition to
paid vacation and other leave, the Executive shall be
entitled, without loss of pay, to absent himself
voluntarily from
the performance of his
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employment for such additional periods of time
and for such valid
and legitimate reasons as the Board may in its discretion
determine.
Further, the Board may grant to the Executive a leave
or leaves of
absence, with or without pay, at such time or
times and upon such
terms and conditions as the Board in its discretion may
determine.
8. Expense
Payments and Reimbursements.
The Executive shall be
reimbursed for all reasonable out-of-pocket
business expenses that he shall
incur in connection with his services under this Agreement
upon substantiation
of such expenses in accordance with applicable
policies of the Company. Such
reimbursements shall be paid promptly by the Company and in
any event not later
than March 15 of the year immediately following the end of
the calendar year in
which the Executive incurred such expense.
9.
Automobile Allowance. During the term
of this Agreement, the
Executive shall be entitled to an
automobile allowance on terms no less
favorable that those in effect
immediately prior to the execution of this
Agreement. Executive shall comply
with reasonable reporting and expense
limitations on the use of such automobile as may be
established by the Company
or the Association from time to time, and the Company or the
Association shall
annually include on Executive's Form W-2 any amount of
income attributable to
Executive's personal use of such automobile. Payments,
if any, made under this
Section 9 shall be paid promptly by the Company and in any
event not later than
March 15 of the year immediately following the end of the calendar
year in which
the expense was incurred.
10. Loyalty and
Confidentiality.
a. During the term
of this Agreement Executive: (i) shall devote
all
his time, attention, skill, and efforts to the faithful
performance
of his duties hereunder;
provided, however, that from time to time,
Executive may serve on the boards of
directors of, and hold any
other offices or positions in, companies or organizations which
will
not present any conflict of interest
with the Company or any of
their subsidiaries or affiliates, unfavorably affect the
performance
of Executive's duties pursuant to this
Agreement, or violate any
applicable statute or regulation and (ii) shall
not engage in any
business or activity contrary to the business affairs
or interests
of the Company.
b.
Nothing contained in this
Agreement shall prevent or limit
Executive's right to invest in the capital stock or other
securities
of any business dissimilar from that of the Company, or, solely as
a
passive, minority investor, in any business.
c. Executive
agrees to maintain the confidentiality of
any and all
information concerning the operation or
financial status of the
Company and the Company; the names
or addresses of any of its
borrowers, depositors and other
customers; any information
concerning or obtained from
such customers; and any
other
information concerning the Company and the Company to
which he may
be
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exposed during the course of his employment. The
Executive further
agrees that, unless required by law or specifically permitted by
the
Board in writing, he will not disclose to
any person or entity,
either during or subsequent to
his employment, any of the
above-mentioned information which is not
generally known to the
public, nor shall he employ such information in any way
other than
for the benefit of the Company and the Company.
11. Termination
and Termination Pay. Subject to
Section 12 of this
Agreement, Executive's employment under this Agreement may be
terminated in the
following circumstances:
a. Death.
Executive's employment under this Agreement shall
terminate
upon his death during the term of this Agreement,
in which event
Executive's estate shall be entitled to receive the compensation
due
to the Executive through the last day of the calendar month in
which
his death occurred.
b.
Retirement. This Agreement shall be
terminated upon Executive's
retirement under the retirement benefit plan or
plans in which he
participates pursuant to Section 6 of this Agreement or
otherwise.
c. Disability.
i. The Board or Executive may
terminate Executive's employment
after having determined Executive has a Disability. For
these
purposes, the Executive shall be deemed to have a "Disability"
in any case in which it is determined that the
Executive (a)
is unable to engage in any substantial gainful
activity by
reason of any medically determinable
physical or mental
impairment which can be expected to result in death, or
last
for a continuous period of not less than 12
months; (b) by
reason of any medically determinable
physical or mental
impairment which can be expected to result in death, or
last
for a continuous period of not less
than 12 months, is
receiving income replacement benefits for a period of not less
than three months under an accident and health plan
covering
employees of the Bank; or (c) is
totally disabled by the
Social Security Administration.
ii. In the event of such Disability,
Executive's obligation to
perform services under this Agreement will
terminate. The
Company or the Association will pay Executive, as
Disability
pay, an amount equal to 100% of Executive's bi-weekly rate
of
base salary in effect as of the date of his
termination of
employment due to Disability. Disability payments will be made
on a monthly basis and will commence on the first day
of the
month following the effective date of Executive's
termination
of employment for Disability and end on the
earlier of: (A)
the date he returns to full-time
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employment at the Company in the same
capacity as he was
employed prior to his termination for
Disability; (B) his
death; or (C) upon attainment of age 65. Such payments
shall
be reduced by the amount of any short- or long-term disability
benefits payable to the Executive under any other
disability
programs sponsored by the Company or
the Association. In
addition, during any period of
Executive's Disability,
Executive and his dependents shall, to the
greatest extent
possible, continue to be covered under
all benefit plans
(including, without limitation, non-taxable
medical, dental
and life insurance plans) of the Company or the
Association,
in which Executive participated prior to his Disability on the
same terms as if
Executive were actively employed by the
Company.
d. Termination for
Cause.
i. The Board may, by written notice to the
Executive in the form
and manner specified in this
paragraph, terminate his
employment at any time, for "Cause". The Executive shall
have
no right to receive compensation or other
benefits for any
period after termination for Cause. Termination
for "Cause"
shall mean termination because
of, in the good faith
determination of the Board, Executive's:
(1) Personal dishonesty;
(2) Incompetence;
(3)
Willful misconduct;
(4) Breach of fiduciary duty involving personal
profit;
(5) Intentional failure to perform stated duties;
(6) Willful violation of any law, rule or
regulation (other
than traffic violations or
similar offenses) that
reflects adversely on the reputation of the Company and
the Company, any felony conviction, any violation of law
involving moral turpitude or any violation of a
final
cease-and-desist order; or
(7) Material breach by Executive of
any provision of this
Agreement.
ii. Notwithstanding
the foregoing, Executive shall not be deemed
to have been terminated for Cause by the Company unless
there
shall have been delivered to Executive a copy of a
resolution
duly adopted at a meeting of such
Board where in the good
faith opinion of the Board, Executive
was
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guilty of the conduct described above
and specifying the
particulars thereof.
e. Voluntary
Termination by Executive. In addition to his other rights
to terminate under this
Agreement, Executive may voluntarily
terminate employment during the term of this Agreement upon at
least
sixty (60) days prior written notice to the
Boards, in which case
Executive shall receive only his
compensation, vested rights and
employee benefits up to the date of his termination.
f. Without Cause
or With Good Reason.
i. In addition to termination pursuant to
Sections 11(a) through
11(e) the Boards, may, by
written notice to Executive,
immediately terminate his employment at any time for a
reason
other than Cause (a termination "Without Cause") and Executive
may, by written notice to the Board,
immediately terminate
this Agreement at any time for "Good Reason" as defined below.
ii. Subject to Section 12 of
this Agreement, in the event of
termination under this Section 11(f),
Executive shall be
entitled to receive an amount equal to (i) his base salary for
the remaining term of the Agreement, and (ii) the value of the
benefits he would have received during the remaining
term of
the Agreement under any
retirement programs (whether
tax-qualified or
non-qualified) in which
Executive
participated prior to his termination (with the amount of
the
benefits determined by reference to the benefits
received by
the Executive or accrued
on his behalf under such programs
during the twelve (12) months preceding
his termination),
payable as a single cash lump sum distribution within ten (10)
calendar days following such termination. In
addition, the
Executive shall continue to participate in any benefit
plans
of the Company or Association that provide life insurance
and
non-taxable medical and dental insurance, or similar
coverage
upon terms no less favorable than the most
favorable terms
provided to senior executives of the
Company during such
period. In the event that the Company or the
Association is
unable to provide such coverage by reason
of Executive no
longer being an employee, the Company shall pay the
Executive
the value of such benefits in
a single cash lump sum
distribution within ten (10) calendar
days following his
termination.
iii. "Good Reason" shall exist if,
without Executive's express
written consent, the Company materially breach
any of their
respective obligations under
this Agreement. Without
limitation, such a material breach shall be
deemed to occur
upon any of the following:
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(1) A material reduction in Executive's
responsibilities or
authority in connection with his employment
with the
Company;
(2) Assignment to Executive of duties
of a non-executive
nature or duties for which he is not reasonably equipped
by his skills and experience;
(3) Failure of the Executive to be nominated or
re-nominated
to the Board
(4) A material reduction in Executive's
salary or benefits
contrary to the terms of this Agreement, or, following a
Change in Control as defined in
Section 12 of this
Agreement, any reduction in salary or material reduction
in benefits below the amounts to which he was
entitled
prior to the Change in Control;
(5) Termination of incentive and benefit plans,
programs or
arrangements, or reduction of Executive's participation
to such an extent as to
materially reduce their
aggregate
value below their aggregate value as of the
Effective Date;
(6) A requirement that
Executive relocate his principal
business office or his principal place
of residence
outside of the area consisting of a
twenty-five (25)
mile radius from the current main office and any branch
of the Company, or the assignment to Executive of duties
that would reasonably require such a relocation; or
(7) Liquidation or dissolution
of the Company or the
Company, other than liquidations or dissolutions
that
are
caused by reorganizations that do not
negatively
affect the status of the Executive,
provided, however, that prior to any termination of employment
for Good Reason (a termination "With
Good Reason"), the
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